The Socio-economic impact of decarbonising geographical Islands' energy systems

Abstract

The impact of the transition to energy autonomy on two geographical island’s local economies, through maximising renewable energy generation and storage, is assessed. The different sectors and activities that impact employment and income generation in the local economies of each of the islands are described. An empirical assessment approach based on the Keynesian Income Multiplier (KIM) is developed and applied using Analytical Hierarchy Process (AHP). Data for AHP was collated through interviews with local experts and stakeholders on each island. Gender employment and wage data was used to calculate the impact on female waged employment within the islands’ economic sectors. The analysis conducted showed that the induced local economic impact per unit of electrical energy due to the new RES-based autonomy in all sectors for male waged employment for both islands, exceeds its unit cost (LCOE). While the profits from per unit of electrical energy for the female waged employment only exceeded the unit cost (LCOE) in tourism for La Graciosa, and three other sectors in Gotland. The local economic impact from decarbonisation and 100% energy autonomy is significantly influenced by how the income from this renewable energy is recirculated within the island’s economic sectors, most essentially, tourism. Our findings suggest that strategies for community ownership and training local people to manage renewable energy facilities is necessary to maximise the benefits of the transition to energy autonomy on local communities.