Economic Effects of Wind Power Plant Deployment on the Croatian Economy

Abstract

This paper tests the hypothesis that incentives for renewable energy sources contribute to economic development in Croatia. The aim of the paper is to quantify the total effects of wind power plant deployment on the Croatian economy in terms of employment and gross value. Indirect and induced effects are spread over the value added chain of producers of investment and intermediate goods and services required for wind power plant deployment and operation. The open input-output model is used for quantifying indirect effects. The closed input output model, which assumes endogenous personal consumption, is applied for quantifying total effects, which includes the effects of induced personal consumption. The gross value added and employment type I and type II multipliers related to wind power plants in Croatia were calculated separately for the investment and intermediate consumption channel. The results show positive indirect and induced effects relating to the deployment of wind power plants in Croatia. They are less pronounced in comparison to previous studies due to the undeveloped domestic production of equipment required for wind power plant deployment. Apart from the manufacturing sector, which produces equipment incorporated into wind power plants, the total effects were significant for construction, transport, and other supporting industries.

The impact of wind and geothermal energy consumption on economic growth and financial development: evidence on selected countries

“…Nonetheless, there is no statistically significant causality from wind and geothermal energy consumption to financial development, and from economic growth to wind and geothermal energy consumption. These findings are obtained by Ohler and Fetters (2014); Mikulić et al (2018) and the results are consistent with the conservative hypothesis.…”

The Economic Impact of Investment in Renewables in Croatia by 2030

“…Given the results presented here, and data from previous studies on Croatia (e.g., Mikulić [16]), we can conclude that our estimates are expectedly lower because we did not include induced effects and we used the average of all renewables investment, and the previous studies included the separate investment of each respective renewable's on macroeconomic variables. Thus, our results show the impact of 14 new jobs created per EUR 1 million investment, while other studies show the range of 15-27 jobs created, with the highest impact of bioenergy in the range.…”

“…The most prominent economic effects in the structure of the Croatian economy are created in the manufacturing industry, followed by construction, and finally, services. Mikulic et al [16] quantified the total effects of wind power on the Croatian economy by their influence on employment and gross value added. They came to identical conclusions.…”

The Impact of Transportation on the Croatian Economy: The Input–Output Approach

“…Ivandić and Šutalo (2019) estimated the GVA multiplier for Croatian tourism at 1.55 and the total contribution of tourism to 16.9% in 2016. In Mikulić et al (2018), wind-power plant deployment effects were quantified, where small multiplicative ones have been found due to the high import content of high-tech products required in those plants. Mikulić et al (2020) valorized economic effects from the energy renovation program of public buildings in Croatia and by application of closed IO model estimated investment multiplier at 2.5.…”