Impacts of Offshore Wind Energy on Seafood Sectors: A Macroeconomic Perspective of the Energy-Food Nexus

The rapid expansion of offshore wind farms (OWFs) in response to increasingly ambitious renewable energy and climate targets in the UK has led to growing concerns about conflicts and synergies with existing fishing activities. The complex relationship between energy and food in the marine environment needs to be explicitly evaluated from an energy-food nexus perspective. On one hand, developing OWFs has potential to reduce GHG emissions and increase energy security through diversifying energy supply and providing domestically produced electricity. On the other hand, the expansion of OWFs could have fish supply implications through impacts on seafood production. There are indirect linkages between OWFs and fishing activities through limited economic production factors, influenced heavily by market forces, and direct linkages through physical and environmental interactions, driven mostly by policies and management practices and affected by ecosystem dynamics. These complex linkages could lead to both negative and positive impacts of OWFs on seafood production and consequently availability and affordability of food supply from the marine environment. Through indirect economic linkages OWFs can affect the demand, supply and prices of the production factors such as labour and capital needed by the seafood production sectors. In terms of direct physical and environmental linkages, the exclusion of fishing activities from OWF areas could result in a decrease in fish landings while reduced fishing activities and artificial reef effect provided by OWF structures could have positive impacts on preservation of fish stocks. To quantitatively evaluate this marine energy-food nexus from a macroeconomic perspective, a static computable general equilibrium (CGE) model is developed, using Scotland as a case study. A particular focus is on the disaggregation of (i) the electricity and seafood sectors to explicitly reflect their economic interconnectedness in order to better model the impacts on availability of food and energy security; (ii) the household groups with different income levels to concentrate on the affordability of energy and food and the distributional effects on welfare. To better emphasise the physical and environmental linkages, two additional modules are created in the model. The innovative marine resource allocation module simulates the spatial conflicts between OWFs and fishing activities while integrating the natural capital and ecosystem services approach further extends the modelling framework to analyse feedbacks between economy and environment. There are therefore three versions of the CGE model, each with a different focus and structure. The first one uses the basic structure of the CGE model to assess the near-term, indirect impact of decreasing cost of OWFs through economic linkages. The results suggest that high cost under subsidy and low cost of OWFs would have positive impacts on energy security and limited negative impacts on seafood production sectors. In particular, the falling cost of electricity from OWFs would have a small positive impact on the economy overall and benefit lower income households, contributing to the reduction in fuel poverty. The second application includes marine resource as an additional production factor and creates a novel marine resource allocation module within the model to better capture the physical interactions between expanding OWFs and fishing activities. The model shows that massive expansion of OWFs results in increasing energy security but significant negative impacts on seafood supply as marine resource is taken away from fisheries by expanding OWFs. The third application integrates natural capital, represented by fish stock, into the CGE model to evaluate the environmental impacts of OWFs considering ecosystem dynamics and feedbacks. Expanding OWFs would reduce fishing output and thus preserve fish stock. However, the artificial reef effect of OWFs would increase the fish stock, eventually benefiting fishing output. The combination of these two opposing impacts suggests that the artificial reef effect is sufficient to mitigate the negative impacts of expansion of OWFs as long as fishermen could get access to the fish stocks close to OWFs. Overall, the model results demonstrate that expanding OWFs would enhance energy security but also bring negative impacts on fish supply. Therefore, there is a need for integrated management of food and energy in the marine environment. To minimise conflicts and maximise synergies from the nexus perspective, co-locating OWFs and fishing activities through marine spatial planning could be a possible solution. The modelling framework is also applicable to other marine renewable energies to assess their potential impacts on energy security and seafood supply, and on the wider economy