Against this backdrop, WiSo researchers Félix Michelet, Sven Heim from PSL University and Mario Liebensteiner from Friedrich-Alexander University Erlangen-Nuremberg are investigating the negative and positive externalities of wind turbines associated with the siting of such installations in Germany. The study, ‘Spin city: Local externalities of wind turbines’, was published in June in the journal Energy Economics.
Using an instrumental variables approach, the researchers found that the siting of wind turbines reduces property prices in the affected localities by 1.9 per cent. However, the effect is not linear. The researchers’ estimates show that the construction of the first wind turbines has a significantly large effect of −5.5 per cent on property prices, whilst the impact of additional wind turbines in areas where other wind turbines are already in place is not statistically significant. Furthermore, the construction of wind turbines leads to a decline in local tourism and house rents, as well as a lower number of planning permissions granted for flats and houses, which exacerbates the existing housing shortage. On a positive note, each wind turbine installed increases a local authority’s tax base by 1.8 per cent through higher business rates revenue. The results suggest that the negative external effects can be mitigated by investing the increased tax revenue in local facilities and public services, thereby offsetting the negative impacts of wind turbines.
In summary, the energy transition requires the continuous expansion of wind power capacity; however, the sustainable achievement of climate targets necessitates taking into account the legitimate economic concerns of local communities. The findings provide an empirical basis for designing compensation and siting policies that distribute both the costs and benefits of wind energy expansion more equitably.