The socio-economic impact of decarbonising geographical islands' energy systems

The impact of the transition to energy autonomy on eight 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 identified. 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 of renewable energy system (RES) autonomy on male and 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 proposed RES autonomy in all sectors for male waged employment for all islands, exceeds its unit cost or Levelised Cost of Energy (LCOE). For female waged employment, the profits from per unit of electrical energy generated exceeded the LCOE for the tourism sectors of La Graciosa, Aran Islands, Majorca and three other sectors in Gotland (health & social work, services, and education). 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, especially, tourism. The 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.