Comparing the macroeconomic demand-side v supply-side impacts of offshore renewable energy

This paper evaluates the deployment of offshore wind in Northern Ireland, focusing on the economic outcomes when considering supply-side factors. Traditional economic analyses typically focus on the direct demand impacts linked to the development, construction, and operation of offshore wind projects. However, recent research highlights a crucial connection between offshore wind capacity and reductions in electricity prices. The novelty of this paper lies in its approach: to the authors' knowledge, it is the first study to model and compare the economy-wide impacts of investment in offshore renewable energy while incorporating the effects of electricity price changes. Using a CGE model, we find when adjustments in electricity prices are considered, Gross Value Added (GVA) over the 60-year simulation period rises from £1.83 billion to £8.6 billion — nearly 4.7 times higher. Employment also increases, growing from 15,860 to 47,750 person-years. These findings are not only valuable for academic researchers but also carry significant implications for policymakers globally as current frameworks underestimate scale and length of economy-wide impacts and industry dynamics. The study suggests that future appraisals will need to adapt accordingly. While our focus is on floating offshore wind in Northern Ireland, the results are pertinent to other technologies and regions. • Compare the economic demand-side v supp-side impacts of investment in offshore wind. • Significantly larger impacts when accounting for supply-side. • Important for policy makers and the idea of inclusive green growth.