Local Economic Impacts of Wind Power Deployment in Denmark

An argument sometimes used to support renewable energy is that it may contribute to job creation.
On the other hand, these technologies often face local opposition. In the case of Denmark, the
country with the longest wind power experience, we examine whether the installation of new turbines had
local economic benefits. Using the Danish master data register of wind turbines and detailed data on the
municipal budget, personal income and sectoral employment from Statistics Denmark, we build a panel
covering 250 municipalities. We use a quasi-experimental set-up and exploit time and regional variations
at the municipal level. We find that the deployment of wind power contributed to the increase in personal
income for entrepreneurs and reduced dependence on social benefits. As municipalities received payments
from wind investors ahead of the construction, the new wind revenues were also followed by increases in
local public spending. We find only very minor effects on employment in some sectors, and the aggregate
local employment does not change significantly. Heterogeneity analyses indicate that the increases in local
entrepreneurial income are largely driven by small installations, whilst increases in municipal budget and
reductions in the dependence on social benefits are induced by larger installations.

Gavard, Claire, Jonas Göbel und Niklas Schoch (forthcoming), Local Economic Impacts of Wind Power Deployment in Denmark, Environmental and Resource Economics