Economic impacts of wind farms on Scottish tourism: report

14 Summary and Conclusions

14.1 Introduction

Numerous surveys have established the importance of the Scottish landscape to potential tourists to Scotland. It has also long been realised that many people find that man made structures such as pylons and wind turbines reduced the attractiveness of a landscape. Reduced quality of an important feature must inevitably reduce demand which will result in either reduced prices or reduced numbers or both. This loss of expenditure will lead to a reduction in economic activity and result in a loss of income and jobs. The question therefore is not whether wind farms have an economic impact but rather what is the likely size of the impact, a far more difficult question to answer.

This research sought to answer that question and consisted of five linked sections:

• A Literature Review
• An Intercept Survey of Responses
• A GIS based study of the geographical distribution of the impacts
• An Internet Survey of Loss of Values
• A multiplier analysis to determine the economic impact of any loss of expenditure

It should be noted that each can be regarded as a valid independent study as well as a vital element in identifying the economic impact of wind farms on tourism.

14.2 The literature review

The literature review aimed to provide meaningful bounds for the likely results by reviewing as comprehensively as possible all previous research on the economic impact of wind farms on tourism. The review examined some 40 studies not only in the UK and Ireland but also in Denmark, Norway, the US, Australia, Sweden and Germany. As part of the review a number of the more important studies on attitude and value change were examined. The findings can be summarised as follows

• There is often strong hostility to developments at the planning stage on the grounds of the scenic impact and the knock on effect on tourism. However the most sensitive locations do not appear to have been given approval so that where negative impacts on tourism might have been a real outcome there is, in practice, little evidence of a negative effect.
• There is a loss of value to a significant number of individuals but there are also some who believe that wind turbines enhance the scene.
• An established wind farm can be a tourist attraction in the same way as a nuclear power station. This of course is only true whilst a visit remains an unusual occurrence.
• Over time hostility to wind farms lessens and they become an accepted even valued part of the scenery. Those closest seem to like them most.
• Whilst there is an undoubted loss of value the effect on tourism in practice is extremely small. This possibly reflects the current limited nature of the exposure (e.g 10 minutes in a 5 hour journey) and, as mentioned earlier, the effect of the planning system preventing seriously adverse developments.
• Overall there is no evidence to suggest a serious negative impact of wind farms on tourism.

14.3 The intercept survey

This survey intercepted tourists most of whom had had a recent experience of a wind farm primarily to identify if the experience had altered the likelihood of a return to Scotland. The locations were within four case study areas:

• Caithness and Sutherland
• Stirling, Perth and Kinross
• The Scottish Borders
• Dumfries and Galloway.

The areas were chosen because of the importance of tourism and the landscape in those areas and the presence of a wind farm constructed or under construction.

The survey sought to identify the impact of the actual and simulated wind farm experiences on the likelihood of return. The vast majority (99%) of those who had seen a wind farm suggested that the experience would not have any affect. Indeed there were as many tourists for whom the experience increased the likelihood of return as decreased. Surprisingly there was no difference between those who has a close and extensive experience and those who had a minimal experience. Those who had not seen a farm were more likely to state a decrease in the likelihood of return, which was even stronger when all tourists were faced with a potential extension of the relevant wind farm. However even then this only related to a small minority of tourists. The resulting changes in likelihoods are given in table 14.1.

Table 14-1 Changes in Likelihoods under alternative scenarios

	ALL		Overnight
Having Seen	Area	Scotland	Area	Scotland
Number Sampled	191	191	137	137
Number Responding	4	4	3	3
Number Not Responding	187	187	134	134
Percent Responding	2.1%	2.1%	2.20%	2.20%
Change in Likelihood	-0.08%	-0.10%	-0.12%	-0.16%
Photo	Area	Scotland	Area	Scotland
Number Sampled	380	380	256	256
Number Responding	11	4	7	3
Number Not Responding	369	376	249	253
Percent Responding	2.89%	1.05%	2.73%	1.17%
Change in Likelihood	-0.73%	-0.05%	-0.70%	-0.10%
Extended	Area	Scotland	Area	Scotland
Number Sampled	380	380	256	256
Number Responding	26	5	19	4
Number Not Responding	354	375	237	252
Percent Responding	6.84%	1.32%	7.42%	1.56%
Change in Likelihood	-2.54%	-0.30%	-2.50%	-0.45%

The Intercept Study also investigated attitudes in a broader sense. This found that whilst Pylons were clearly the most objectionable objects, tourists in general disliked wind farms particularly if there were large number of farms within the landscape. The results suggest that whilst there is a clear reduction in the consumer surplus associated with the tourist activity, at the margin the effects are very small; the vast majority simply accepted the reduction.

14.4 The GIS study

Not all tourists in an area will see a wind farm or stay in a room with a view of a wind farm at a time when it is visible. The GIS study was concerned with establishing the numbers who could have visibility, and has used a theoretical maximum exposure with no reductions made to account for tourists staying in rooms where wind turbines are in a line of sight but not visible at the time. This could occur when tourists are only in their rooms when weather or daylight conditions reduce visibility. For example, low cloud or fog could shield hill tops and turbines from view.

The first element of the GIS study consisted of developing a Zone of Visual Impact ( ZVI) for each wind farm that was identified as constructed, with permission for construction or currently under consideration after formal application. It did not cover those at the scoping stage or those that had been rejected.

The ZVI's for the areas were combined and each location (square 40m*40m) in the area that could see 4 or more wind farms at less than 15km, identified. The Combined ZVI was layered onto maps containing the important roads in the area and the length of each road in the ZVI calculated. Similarly the CZVI was combined with a map of all accommodation in the area and the proportion of affected bed spaces calculated.

To assess the percentage of tourists affected the number of tourists on each road in the area had to be estimated. This was achieved by extracting from the Scottish Road Data Base monthly figures of traffic flows and taking the difference between summer and winter flows. A number of adjustments were made to account for likely routes and for Scottish tourists heading south

By estimating the number of tourists on roads unaffected by wind farms, the proportion affected could be calculated. Table 14.2 summarises the proportion of tourists and of bed spaces affected in each of the areas

Table 14-2 Proportion of Tourists and Accommodation Affected

Area	Tourists	Accommodation
Caithness & Sutherland	81%	4.9%
Stirling, Perth & Kinross	85%	6.6%
Scottish Borders	91.6%	6.7%
Dumfries & Galloway	98%	16.2%

14.5 The internet survey

The economic impact was believed to result from two main sources. First the intercept study was designed to identify the change in numbers that would go to affected locations. When combined with the proportion of tourists travelling in affected locations it is possible to estimate the proportionate drop in expenditure. Second the internet survey seeks to provide information on the proportionate drop in the prices that would be paid for accommodation if the view from a hotel gained a view of a wind farm.

In the study 600 tourists from the UK and 100 tourists from the US were asked to state how much extra they would pay for a room with a specific view. There were 13 views in total which are summarised in Table 14.3 together with the mean values.

Table 14-3 Scenes and mean values for UK and US respondents

		UK	US
Braes of Doune	Clear	£22.71	£26.02
	With Farm	£16.15	£21.36
	Extended	£14.61	£18.75
Bay Near Thurso	Clear	£24.29	£30.45
	With Farm	£18.12	£24.37
	Extended	£17.57	£24.44
Waterfall	Clear	£17.41	£23.43
	With Farm	£9.44	£17.48
Rural Scene	Clear	£15.87	£21.16
	Grid Line	£3.79	£9.08
	2 Grid Lines	£2.16	£7.45
River Scene	Clear	£21.98	£29.18
	With Poles	£17.40	£23.44

The only significantly different sub group were the young who found the wind farms far more acceptable. As can be seen from the table, both UK and US Tourists found the pylons the most objectionable of the structures. Wind farms led to a serious decline in value, more marked in the UK than in the US sample. Very surprisingly, when the respondent was unaware that a farm had been extended, the drop in value of the extension was relatively small, as seen in Table 14.4. The consistency of this result coupled with the dislike of a large number of farms suggests that a policy of concentrating developments and making these large would be preferable to a large number of smaller farms scattered over a wide area.

Table 14-4 Loss of Value from Wind Farm Development

	UK		US
	Loss	Loss%	Loss	Loss%
Basic Wind Farm Average Loss	£6.90	18.00%	£5.56	8.70%
Extended Wind Farm Average Loss	£7.41	23.20%	£6.64	12.80%

In the short term, given a linear demand function, the fall in willingness to pay for a "room with a view", results in an equal fall in the mean price actually paid by the tourist. Consequently the proportionate fall in expenditure on accommodation can be calculated. When combined with the proportion of rooms in an area affected by wind farm development estimated in the GIS analysis, estimates of tourist expenditure lost in the accommodation sector in each area, as shown in Table 14-5 were obtained.

Table 14-5 Reduction in Accommodation Expenditure

Area	Affected Accommodation %	Reduction in Expenditure %
Caithness and Sutherland	4.90%	0.48%
Stirling, Perth & Kinross	6.60%	0.65%
The Scottish Borders	6.70%	0.66%
Dumfries & Galloway	16.20%	1.59%

The internet study also had three questions concerned with the perception of the number of wind farms and the reaction to them. This showed that:

• The public believed that wind farms were more prevalent than was factually the situation
• That they were unaware of attempts to keep them from the most scenic areas
• That a substantial number (17%) claimed that they were less likely to visit if more wind farms are built
• That this was less marked amongst the young.

In our view a substantial proportion of the 17% are registering what might be termed a protest vote. They do not like the impact of wind farms on the scenery (like the majority of respondents) and indicate that position in the only way they can, by identifying withdrawal. In comparison those actually intercepted have a better idea of the actual numbers and very wide dispersion and the relatively benign impact. The key then is for tourist bodies to insure that the perception of the situation is closer to the reality and to get people to Scotland.

14.6 Economic multiplier analysis

The economic analysis is based upon three core pieces of information for each area and Scotland:

• The number of tourists
• The typical expenditure of these tourists
• The size and structure of the local economy.

Each study area consists of one or more NUTS4 region, a NUTS4 region being a local authority or some division of it relating to an enterprise company area. In this case Caithness and Sutherland, Dumfries and Galloway and the Scottish Borders are NUTS4 regions, whilst Stirling, Perth and Kinross area consists of two such regions corresponding with the local authorities. Tourism Statistics are often presented by Tourist Areas. In the case of Dumfries and Galloway and The Scottish Borders these are identical to the Local Authority/ NUTS4 regions. Perthshire Tourist Board Area covers the Perth and Kinross region but Stirling is part of the huge tourist board that covers Loch Lomond, the Trossachs, Argyll and the Isles. Caithness and Sutherland is part of the Highlands but has had a number of analyses undertaken at the NUTS4 level.

Estimates of tourist activity (number of overnights) by NUTS4 area were made using Visit Scotland data supplemented where necessary by the evidence submitted by local authorities to support Grant-in-Aid financing.

Estimates of "long" day trips were made utilising the GB Day Visitor Survey supplemented by the Road Analysis undertaken as part of the GIS study, the National Travel Survey and a gravity model.

Estimates of expenditure patterns for tourists had been made in a number of studies undertaken by the consultants over a number of years. No attempt was made to identify a specific pattern for those likely to be lost to a specific region.

Together these estimates provide the expenditure by main category in each region.

The proportion of tourist expenditure lost in each region as a result of wind farms was calculated by combining the results of the Intercept survey and the GIS roads analysis and applied to the estimated tourist expenditure in the region. The resulting change in expenditure was then fed into the DREAM model of the region to provide estimates of the employment and income (gross value added) lost.

The change (loss) in tourist expenditure in the accommodation sector was estimated by combining the proportionate fall in price of affected rooms, the proportion of rooms affected and the total expenditure on accommodation by tourists in the region. This was then input into the DREAM model and the impact on employment and income estimated. The results are summarised in Table 14-6

Table 14-6 Economic Impact of Wind Farms on Tourism

	Current Estimated Total GVA		Potential Reduction by 2015 due to Tourism Visits (vs. no wind farms)		Potential Reduction by 2015 due to Accommodation Spending (vs. no wind farms)		Maximum Total Reduction by 2015 due to Tourism Effects
	(1)	(2)	(3)	(4)	(5)	(6)	(7=3+5)	(8=4+6)
	GVA £m	Jobs	GVA £m	Jobs	GVA £m	Jobs	Total GVA in all industries £m	Total jobs in all industries
Caithness & Sutherland	£466	1,590	£0.6	27	£0.1	3	£0.7	30
Stirling, Perth & Kinross	£2,961	10,600	£5.2	279	£1.1	60	£6.3	339
Scottish Borders	£1,150	3,600	£1.5	75	£0.2	6	£1.7	81
Dumfries & Galloway	£1,661	4,800	£3.0	200	£1.1	77	£4.1	277

As at June 2007 (obtained from http://www.restats.org.uk/2010_target/2010_Datasheets/Planning_Database_Extract_June_2007.xls).

For Scotland it was assumed that the accommodation losses in one area would be offset by gains in other unaffected areas. Similarly only those who stated in the Intercept study that they would not return to Scotland were used. Because of the impact of new wind farms on the M74 corridor as few as 5% of tourists to Scotland will not experience wind farms in the future. As before the change in likelihood was combined with the proportion of tourists affected and estimates of total tourist expenditure in Scotland to give an estimate of expenditure change. In the Scottish case the DREAM model is the input-output table for Scotland, which is used to generate estimates of the direct, indirect and induced effects and the total impact on employment and income. For Scotland this is £4.7m in come associated with 211 FTE jobs.

14.7 Conclusion and planning implications

Whilst it is clear that there is an impact, this impact is very small. It might however be further reduced if a Tourist Impact Statement was made a part of the planning process. This statement would require an analysis of:

• Tourist flows on roads that are located in the ZVI of the wind farm
• Numbers of bed spaces within the same ZVI.

It seems reasonable to hypothesise that the location of farms that can be viewed from major tourist routes like the M74 and A9 should be avoided, or should be developed alongside measures to screen them from view- for example, landscaping with woodlands.

The evidence is overwhelming that wind farms reduce the value of the scenery (although not as significantly as pylons). The evidence from the Internet Survey suggests that a few very large farms concentrated in an area might have less impact on the Tourist Industry than a large number of small farms scattered throughout Scotland. However the evidence, not only in this research but also in research by Moran commissioned by the Scottish Government, is that Landscape has a measurable value that is reduced by the introduction of a wind farm. Concentration of wind farms might have serious implications for a limited number of individual households. A system of compensation by developers might go some way to placate those most negatively affected.