IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v106y2017icp394-403.html
   My bibliography  Save this article

A comparative analysis of the costs of onshore wind energy: Is there a case for community-specific policy support?

Author

Listed:
  • Berka, Anna L.
  • Harnmeijer, Jelte
  • Roberts, Deborah
  • Phimister, Euan
  • Msika, Joshua

Abstract

There is growing policy interest in increasing the share of community-owned renewable energy generation. This study explores why and how the costs of community-owned projects differ from commercially-owned projects by examining the case of onshore wind in the UK. Based on cross-sectoral literature on the challenges of community ownership, cost differences are attributed to six facets of an organisation or project: internal processes, internal knowledge and skills, perceived local legitimacy of the project, perceived external legitimacy of the organisation, investor motivation and expectations, and finally, project scale. These facets impact not only development costs but also project development times and the probability that projects pass certain critical stages in the development process. Using survey-based and secondary cost data on community and commercial projects in the UK, a model is developed to show the overall impact of cost, time and risk differences on the value of a hypothetical 500kW onshore wind project. The results show that the main factors accounting for differences are higher pre-planning costs and additional risks born by community projects, and suggest that policy interventions may be required to place community- owned projects on a level playing field with commercial projects.

Suggested Citation

  • Berka, Anna L. & Harnmeijer, Jelte & Roberts, Deborah & Phimister, Euan & Msika, Joshua, 2017. "A comparative analysis of the costs of onshore wind energy: Is there a case for community-specific policy support?," Energy Policy, Elsevier, vol. 106(C), pages 394-403.
    • Handle: RePEc:eee:enepol:v:106:y:2017:i:c:p:394-403
    DOI: 10.1016/j.enpol.2017.03.070
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421517302240
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2017.03.070?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ezzine de Blas, Driss & Ruiz Pérez, Manuel & Sayer, Jeffrey A. & Lescuyer, Guillaume & Nasi, Robert & Karsenty, Alain, 2009. "External Influences on and Conditions for Community Logging Management in Cameroon," World Development, Elsevier, vol. 37(2), pages 445-456, February.
    2. Stenzel, Till & Frenzel, Alexander, 2008. "Regulating technological change--The strategic reactions of utility companies towards subsidy policies in the German, Spanish and UK electricity markets," Energy Policy, Elsevier, vol. 36(7), pages 2645-2657, July.
    3. Chmiel, Zbigniew & Bhattacharyya, Subhes C., 2015. "Analysis of off-grid electricity system at Isle of Eigg (Scotland): Lessons for developing countries," Renewable Energy, Elsevier, vol. 81(C), pages 578-588.
    4. Aggarwal, Rimjhim M., 2000. "Possibilities and Limitations to Cooperation in Small Groups: The Case of Group-Owned Wells in Southern India," World Development, Elsevier, vol. 28(8), pages 1481-1497, August.
    5. Vega, Dora Carias & Keenan, Rodney J., 2014. "Transaction cost theory of the firm and community forestry enterprises," Forest Policy and Economics, Elsevier, vol. 42(C), pages 1-7.
    6. Christopher Groves & Max Munday & Natalia Yakovleva, 2013. "Fighting the Pipe: Neoliberal Governance and Barriers to Effective Community Participation in Energy Infrastructure Planning," Environment and Planning C, , vol. 31(2), pages 340-356, April.
    7. Yadoo, Annabel & Cruickshank, Heather, 2010. "The value of cooperatives in rural electrification," Energy Policy, Elsevier, vol. 38(6), pages 2941-2947, June.
    8. Chand, Narendra & Kerr, Geoffrey N. & Bigsby, Hugh, 2015. "Production efficiency of community forest management in Nepal," Forest Policy and Economics, Elsevier, vol. 50(C), pages 172-179.
    9. Gordon Walker & Sue Hunter & Patrick Devine-Wright & Bob Evans & Helen Fay, 2007. "Harnessing Community Energies: Explaining and Evaluating Community-Based Localism in Renewable Energy Policy in the UK," Global Environmental Politics, MIT Press, vol. 7(2), pages 64-82, May.
    10. Nolden, Colin, 2013. "Governing community energy—Feed-in tariffs and the development of community wind energy schemes in the United Kingdom and Germany," Energy Policy, Elsevier, vol. 63(C), pages 543-552.
    11. George Callaghan & Derek Williams, 2014. "Teddy bears and tigers: How renewable energy can revitalise local communities," Local Economy, London South Bank University, vol. 29(6-7), pages 657-674, September.
    12. Makino, Mitsutaku & Matsuda, Hiroyuki, 2005. "Co-management in Japanese coastal fisheries: institutional features and transaction costs," Marine Policy, Elsevier, vol. 29(5), pages 441-450, September.
    13. Bergek, Anna & Jacobsson, Staffan & Carlsson, Bo & Lindmark, Sven & Rickne, Annika, 2008. "Analyzing the functional dynamics of technological innovation systems: A scheme of analysis," Research Policy, Elsevier, vol. 37(3), pages 407-429, April.
    14. Wolsink, Maarten, 2007. "Planning of renewables schemes: Deliberative and fair decision-making on landscape issues instead of reproachful accusations of non-cooperation," Energy Policy, Elsevier, vol. 35(5), pages 2692-2704, May.
    15. Walker, Gordon & Devine-Wright, Patrick, 2008. "Community renewable energy: What should it mean," Energy Policy, Elsevier, vol. 36(2), pages 497-500, February.
    16. Toke, David & Breukers, Sylvia & Wolsink, Maarten, 2008. "Wind power deployment outcomes: How can we account for the differences?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 12(4), pages 1129-1147, May.
    17. Bomberg, Elizabeth & McEwen, Nicola, 2012. "Mobilizing community energy," Energy Policy, Elsevier, vol. 51(C), pages 435-444.
    18. Mari Martiskainen, 2016. "The role of community leadership in the development of grassroots innovations," SPRU Working Paper Series 2016-10, SPRU - Science Policy Research Unit, University of Sussex Business School.
    19. Seyfang, Gill & Park, Jung Jin & Smith, Adrian, 2013. "A thousand flowers blooming? An examination of community energy in the UK," Energy Policy, Elsevier, vol. 61(C), pages 977-989.
    20. Foxon, Timothy J., 2013. "Transition pathways for a UK low carbon electricity future," Energy Policy, Elsevier, vol. 52(C), pages 10-24.
    21. Maruyama, Yasushi & Nishikido, Makoto & Iida, Tetsunari, 2007. "The rise of community wind power in Japan: Enhanced acceptance through social innovation," Energy Policy, Elsevier, vol. 35(5), pages 2761-2769, May.
    22. Mitchell, Catherine & Connor, Peter, 2004. "Renewable energy policy in the UK 1990-2003," Energy Policy, Elsevier, vol. 32(17), pages 1935-1947, November.
    23. Rogers, Jennifer C. & Simmons, Eunice A. & Convery, Ian & Weatherall, Andrew, 2012. "Social impacts of community renewable energy projects: findings from a woodfuel case study," Energy Policy, Elsevier, vol. 42(C), pages 239-247.
    24. Wellens, Lore & Jegers, Marc, 2014. "Effective governance in nonprofit organizations: A literature based multiple stakeholder approach," European Management Journal, Elsevier, vol. 32(2), pages 223-243.
    25. Kobos, Peter H. & Erickson, Jon D. & Drennen, Thomas E., 2006. "Technological learning and renewable energy costs: implications for US renewable energy policy," Energy Policy, Elsevier, vol. 34(13), pages 1645-1658, September.
    26. Euan Phimister & Deborah Roberts, 2012. "The Role of Ownership in Determining the Rural Economic Benefits of On-shore Wind Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(2), pages 331-360, June.
    27. Valentine, Scott Victor, 2010. "A STEP toward understanding wind power development policy barriers in advanced economies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(9), pages 2796-2807, December.
    28. Hain, J. J. & Ault, G. W. & Galloway, S. J & Cruden, A. & McDonald, J. R., 2005. "Additional renewable energy growth through small-scale community orientated energy policies," Energy Policy, Elsevier, vol. 33(9), pages 1199-1212, June.
    29. Hanley, Nick & Nevin, Ceara, 1999. "Appraising renewable energy developments in remote communities: the case of the North Assynt Estate, Scotland," Energy Policy, Elsevier, vol. 27(9), pages 527-547, September.
    30. Breukers, Sylvia & Wolsink, Maarten, 2007. "Wind power implementation in changing institutional landscapes: An international comparison," Energy Policy, Elsevier, vol. 35(5), pages 2737-2750, May.
    31. Smith, Adrian & Kern, Florian & Raven, Rob & Verhees, Bram, 2014. "Spaces for sustainable innovation: Solar photovoltaic electricity in the UK," Technological Forecasting and Social Change, Elsevier, vol. 81(C), pages 115-130.
    32. McLaren Loring, Joyce, 2007. "Wind energy planning in England, Wales and Denmark: Factors influencing project success," Energy Policy, Elsevier, vol. 35(4), pages 2648-2660, April.
    33. Slee, Bill, 2015. "Is there a case for community-based equity participation in Scottish on-shore wind energy production? Gaps in evidence and research needs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 540-549.
    34. Klessmann, Corinna & Rathmann, Max & de Jager, David & Gazzo, Alexis & Resch, Gustav & Busch, Sebastian & Ragwitz, Mario, 2013. "Policy options for reducing the costs of reaching the European renewables target," Renewable Energy, Elsevier, vol. 57(C), pages 390-403.
    35. Musall, Fabian David & Kuik, Onno, 2011. "Local acceptance of renewable energy--A case study from southeast Germany," Energy Policy, Elsevier, vol. 39(6), pages 3252-3260, June.
    36. Chhetri, Bir Bahadur Khanal & Lund, Jens Friis & Nielsen, Øystein Juul, 2012. "The public finance potential of community forestry in Nepal," Ecological Economics, Elsevier, vol. 73(C), pages 113-121.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haji Bashi, Mazaher & De Tommasi, Luciano & Le Cam, Andreea & Relaño, Lorena Sánchez & Lyons, Padraig & Mundó, Joana & Pandelieva-Dimova, Ivanka & Schapp, Henrik & Loth-Babut, Karolina & Egger, Christ, 2023. "A review and mapping exercise of energy community regulatory challenges in European member states based on a survey of collective energy actors," Renewable and Sustainable Energy Reviews, Elsevier, vol. 172(C).
    2. Leire Gorroño-Albizu, 2020. "The Benefits of Local Cross-Sector Consumer Ownership Models for the Transition to a Renewable Smart Energy System in Denmark. An Exploratory Study," Energies, MDPI, vol. 13(6), pages 1-23, March.
    3. Fuentes González, Fabián & Sauma, Enzo & van der Weijde, AdriaanHendrik, 2019. "The Scottish experience in community energy development: A starting point for Chile," Renewable and Sustainable Energy Reviews, Elsevier, vol. 113(C), pages 1-1.
    4. Grashof, Katherina, 2019. "Are auctions likely to deter community wind projects? And would this be problematic?," Energy Policy, Elsevier, vol. 125(C), pages 20-32.
    5. Busch, Henner & Ruggiero, Salvatore & Isakovic, Aljosa & Hansen, Teis, 2021. "Policy challenges to community energy in the EU: A systematic review of the scientific literature," Renewable and Sustainable Energy Reviews, Elsevier, vol. 151(C).
    6. Sirr, Gordon & Power, Bernadette & Ryan, Geraldine & Eakins, John & O’Connor, Ellen & le Maitre, Julia, 2023. "An analysis of the factors affecting Irish citizens’ willingness to invest in wind energy projects," Energy Policy, Elsevier, vol. 173(C).
    7. Louise Krog & Karl Sperling & Henrik Lund, 2018. "Barriers and Recommendations to Innovative Ownership Models for Wind Power," Energies, MDPI, vol. 11(10), pages 1-16, September.
    8. Fuentes González, Fabián & van der Weijde, Adriaan Hendrik & Sauma, Enzo, 2020. "The promotion of community energy projects in Chile and Scotland: An economic approach using biform games," Energy Economics, Elsevier, vol. 86(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Berka, Anna L. & Creamer, Emily, 2018. "Taking stock of the local impacts of community owned renewable energy: A review and research agenda," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 3400-3419.
    2. Grashof, Katherina, 2019. "Are auctions likely to deter community wind projects? And would this be problematic?," Energy Policy, Elsevier, vol. 125(C), pages 20-32.
    3. Chiara Candelise & Gianluca Ruggieri, 2017. "Community Energy in Italy: Heterogeneous institutional characteristics and citizens engagement," IEFE Working Papers 93, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    4. Busch, Henner & Ruggiero, Salvatore & Isakovic, Aljosa & Hansen, Teis, 2021. "Policy challenges to community energy in the EU: A systematic review of the scientific literature," Renewable and Sustainable Energy Reviews, Elsevier, vol. 151(C).
    5. Brummer, Vasco, 2018. "Community energy – benefits and barriers: A comparative literature review of Community Energy in the UK, Germany and the USA, the benefits it provides for society and the barriers it faces," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 187-196.
    6. Thomas Hoppe & Antonia Graf & Beau Warbroek & Imke Lammers & Isabella Lepping, 2015. "Local Governments Supporting Local Energy Initiatives: Lessons from the Best Practices of Saerbeck (Germany) and Lochem (The Netherlands)," Sustainability, MDPI, vol. 7(2), pages 1-32, February.
    7. Klein, Sharon J.W. & Coffey, Stephanie, 2016. "Building a sustainable energy future, one community at a time," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 867-880.
    8. Beau Warbroek & Thomas Hoppe, 2017. "Modes of Governing and Policy of Local and Regional Governments Supporting Local Low-Carbon Energy Initiatives; Exploring the Cases of the Dutch Regions of Overijssel and Fryslân," Sustainability, MDPI, vol. 9(1), pages 1-36, January.
    9. Dalia Streimikiene & Tomas Baležentis & Artiom Volkov & Mangirdas Morkūnas & Agnė Žičkienė & Justas Streimikis, 2021. "Barriers and Drivers of Renewable Energy Penetration in Rural Areas," Energies, MDPI, vol. 14(20), pages 1-28, October.
    10. Beau Warbroek & Thomas Hoppe & Frans Coenen & Hans Bressers, 2018. "The Role of Intermediaries in Supporting Local Low-Carbon Energy Initiatives," Sustainability, MDPI, vol. 10(7), pages 1-28, July.
    11. Mignon, Ingrid & Rüdinger, Andreas, 2016. "The impact of systemic factors on the deployment of cooperative projects within renewable electricity production – An international comparison," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 478-488.
    12. Jay Sterling Gregg & Sophie Nyborg & Meiken Hansen & Valeria Jana Schwanitz & August Wierling & Jan Pedro Zeiss & Sarah Delvaux & Victor Saenz & Lucia Polo-Alvarez & Chiara Candelise & Winston Gilcrea, 2020. "Collective Action and Social Innovation in the Energy Sector: A Mobilization Model Perspective," Energies, MDPI, vol. 13(3), pages 1-24, February.
    13. Hoicka, Christina E. & MacArthur, Julie L., 2018. "From tip to toes: Mapping community energy models in Canada and New Zealand," Energy Policy, Elsevier, vol. 121(C), pages 162-174.
    14. Simón, Xavier & Copena, Damián & Montero, María, 2019. "Strong wind development with no community participation. The case of Galicia (1995–2009)," Energy Policy, Elsevier, vol. 133(C).
    15. Holstenkamp, Lars & Kahla, Franziska, 2016. "What are community energy companies trying to accomplish? An empirical investigation of investment motives in the German case," Energy Policy, Elsevier, vol. 97(C), pages 112-122.
    16. Jemma Bere & Calvin Jones & Stuart Jones & Max Munday, 2017. "Energy and development in the periphery: A regional perspective on small hydropower projects," Environment and Planning C, , vol. 35(2), pages 355-375, March.
    17. van der Waal, Esther C., 2020. "Local impact of community renewable energy: A case study of an Orcadian community-led wind scheme," Energy Policy, Elsevier, vol. 138(C).
    18. Langer, Katharina & Decker, Thomas & Roosen, Jutta & Menrad, Klaus, 2016. "A qualitative analysis to understand the acceptance of wind energy in Bavaria," Renewable and Sustainable Energy Reviews, Elsevier, vol. 64(C), pages 248-259.
    19. Bauwens, Thomas, 2019. "Analyzing the determinants of the size of investments by community renewable energy members: Findings and policy implications from Flanders," Energy Policy, Elsevier, vol. 129(C), pages 841-852.
    20. Wirth, Steffen, 2014. "Communities matter: Institutional preconditions for community renewable energy," Energy Policy, Elsevier, vol. 70(C), pages 236-246.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:106:y:2017:i:c:p:394-403. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.