Economic analysis of introducing renewable energy in a remote island: A case study of Tsushima Island, Japan

Abstract

Given the increasing concerns of climate change and importance of RE for the solution, it is indispensable to promote RE electricity in remote islands where thermal power generation is the main energy source. However, various challenges, including economic effect, have led to the prevention of their penetration. This study aims to clarify the potential economic impact of promoting renewable-energy electricity in the remote island of Tsushima, Japan. To this end, we create an input-output table for Tsushima with explicit renewable-energy-related sectors and conducted an input-output analysis to evaluate the spillover effects of renewable-energy electricity promotion in Tsushima. The analysis demonstrated that the spillover effects of introducing photovoltaics and wind power were of JPY 101.14–461.45 million/year and the corresponding employment effects were of 4.21–19.30 person/year. Although the spillover effects inside the island were not significantly large, the spillover effects were also generated outside the island.