Renewable energies and their impact on local value added and employment

Background: Beyond the motivation to reduce the environmental impact of energy production, the economic rationale is a key incentive for local communities to become involved in renewable energy (RE). Substituting imported fossil fuels or final energy with RE sources creates opportunities at the local level to establish steps of the RE value chain, resulting in value added and employment in the respective region's RE sector. Methods: The model approach is described and applied to the example of onshore wind energy. Subsequently, the implementation of the model for an average model municipality is explained, which then serves as the basis for calculating the model results. The model was designed for the specific conditions in Germany but the approach can be transferred to other countries. Results: A total of 9.3 million euros of municipal value added and 166 jobs could have been generated in the RE sector in the average model municipality in Germany in 2011. The value chain stage of systems manufacture contributed the largest share, but in total, the continuous effects, i.e., the effects generated by operation and maintenance (O&M) and in the system operator stage, were greater. Conclusions: The model introduced in this paper allows for a detailed analysis of the extent and distribution of RE value-added and employment effects at the local level. The results show that the use of RE has significant potential to create value added and employment throughout Germany's RE sector, even in regions without manufacturing industries. Knowledge of these effects can be an important input to local decision-making processes, increase acceptance, and enhance motivation to further expand decentralized RE generation.