Understanding wind energy economic externalities impacts: A systematic literature review

Abstract

Electricity generation from wind energy is one of the main drivers of decarbonization in energy systems. However, installing wind farm facilities may have beneficial and harmful impacts on the habitat of living beings. This study reviews the literature based on economic analysis to identify the main externalities related to the installation of wind farms and the economic methodologies used to assess these externalities, filling an existent literature gap. A systematic literature review followed the Preferred Reporting Items on Systematic Reviews and Meta-analysis standards. A total of 33 studies were identified, most of them carried out in Europe. The studies cover 24 years, between 1998 and 2022. The externalities associated with wind electricity generation are classified into three categories: the impact on well-being, the impact of wind turbines, and the impacts of avoided externalities. Most studies (24 out of 33) determine economic values by stated preference methods through choice experiments, discrete choice experiments, and contingent valuation. Revealed preference methods were identified in 5 studies using hedonic pricing and travel cost techniques. The challenges and limitations of this analysis in terms of externalities identification and their assessment are also discussed, concluding that additional updated review studies are needed since the latest ones were published in 2016 and 2017. Moreover, it gives insights to policymakers and academics on a more complete approach they can use to evaluate the impacts of decarbonization, which, apart from the technological view, also considers and estimates the socio-economic and environmental perspectives.