Offshore wind energy in Greece: Estimating the socio-economic impact
Investing in renewable energy is critical if Greece is to meet its 2050 target of net zero carbon emissions. With current discussions focusing on exploiting the country’s offshore wind potential, the relevant legislative framework (to be published in the following days) is expected to promote investment in offshore wind energy in the country.
Alma Economics developed a ground-breaking Cost Benefit Analysis (CBA) framework that links investment costs (including construction, operation, maintenance and decommissioning costs) and social costs to the economic, social and environmental benefits from offshore wind power. Our CBA framework explores benefits at the global and national level as well as for local communities and visitors to the region where the farm will be built. The study was published by ELIAMEP and funded by EEA Grants.
The newly developed floating offshore wind technology is ideally suited to the deep waters of the Greek seas. A hypothetical floating offshore wind farm of 495MW energy capacity located at an average 10km distance from the shore and 250m water depth is expected to require an investment of almost €1 billion over its lifetime. This farm can create around 2million MWh annually over 25 years, covering around 4% of Greece’s annual energy demand and reducing CO2 emissions by 1.5 million tonnes.
Our research suggests that investing in offshore wind power in Greece will create substantial global gains through enabling a reduction in CO2 emissions by replacing energy from conventional sources. As long as appropriate compensation mechanisms are put in place, offshore wind power can also be beneficial for local communities, which can often be resistant to developments in their area due to the visual disamenity associated with wind farms and the risk of negative impacts on the local environment. In our hypothetical scenario, we estimate the annual welfare loss – and hence required compensation – to local residents to be around €2,500 per person. The required compensation to host communities could take the form of private compensation, such as provision of energy at lower prices, or public compensation, such as the provision of local public goods (infrastructure development, or maintenance of cultural heritage).
You can access our model in Excel format to experiment with different assumptions and parameter values and explore the results under different scenarios.