Essays in environmental economics: assessing externalities from distributed infrastructure

With a move to a sustainable energy system distributed energy technologies (such as solar, wind, small hydro) have become much more common, contributing a significant amount to overall energy generation. While these technologies have gained wide political support as means to reduce negative externalities associated with the current fossil fuel-based energy production that is driving climate change they may themselves be associated with other (negative and positive) externalities.

This is so, as the deployment of renewables not only brings grave changes to the energy landscape but also literally changed the face of the landscape. Different to traditional energy generation methods that tend to require few facilities and generate power in a (fairly) centralized manner, renewable technologies require a far larger number of installations that also tend to be distributed more widely.

Equally, distributed energy has in many countries reached a stage where the first turbines have extended their useful lifetime. In practice this means that they will be decommissioned and either replaced or removed. Decommissioning may present opportunities for policies pushing accelerated expansion of renewables or to fine-tune policies to make sure support mechanisms are efficient (improve allocation, efficiency).

This thesis will deal with two core issues related to the developments outlined above, in particular those pertaining to countries that have reached decommissioning. Firstly. It will investigate the externalities from distributed energy, considering also later stage issues such as decommissioning and repowering. This will focus on both the externalities from wind power as measured by residential house prices as well as the option value of land as well as impacts on local employment outcomes. Secondly, the thesis will also consider issues of inefficiency in the current allocation of renewables. More precisely, the degree of spatial misallocation, the role of heterogeneous investor preferences and whether learning improves the efficiency of spatial outcomes as owners experience increases over time.