Social Assessment of Wind Power
Visual Effect and Noise from Windmills – Quantifying and Valuation
AKF, April 1996
This survey shows that the economic expenses in connection with noise and visual effects from wind mills are less than 0.1 øre per kWh electricity produced, which is minimal.
The basis of the survey is that erection of wind mills in some municipalities has resulted in opposition locally, due to the fact that the wind mills are noisy and disfiguring the landscape.
This survey has primarily been based on interviews with 342 persons living close to wind mills. These persons have been asked how much they are willing to pay to get rid of the wind mills. To check the result of the interview, at study has been carried out of the prices of 74 houses situated close to wind mills, compared with houses situated far from wind mills, but otherwise similar. The result of the survey of the house prices is at little higher – about 1 øre per kWh.
The main idea of wind power is to produce electricity without air pollution and without using exhaustible natural resources. However, wind power involves certain costs. These costs are among other things due to the fact that windmills stand as a foreign element in the open landscape. Some people are of the opinion that windmills in an open landscape impinge on the recreative element of the landscape. In addition to this, windmills give off noise that, depending on the wind direction and distance from the windmill, can be a nuisance for those living in the vicinity.
The purpose of this study is to evaluate how great the costs are from the visual effect and noise of the windmills. In order to make it possible to compare these costs with other costs and gains in relation to windmills, these costs are reckoned in cash terms. This has been done partly on the basis of the willingness to pay for getting rid of the windmills of people living in the vicinity (the interview method or contingent valuation), and partly using a survey of house prices in the vicinity of the windmills (the house price method or hedonic pricing) as a starting point.
Three surveys have thus been carried out:
- a survey of the number of houses directly affected by the windmills
- an interview survey (contingent valuation) which elucidates the nuisance suffered by those living in the vicinity reckoned in cash terms on the basis of households' willingness to pay for getting rid of the windmills
- a house price survey (hedonic pricing) where an evaluation is made of whether the close-lying windmills have an influence on the price one is willing to pay for a house.
102 windmill installations have been selected for the study from Denmark's Windmill Association's (ch) windmill statistics. All of these installations have been inspected by AKF. This study shows that on average eight households are affected by single windmills, six households are affected by windmill clusters and 12 households are affected by windmill parks.
In addition to the 102 existing installations, 23 municipal planned sites for the erection of windmills (chiefly clusters and parks) have also been inspected. These inspections show that the windmills expected to be erected in future are to be erected at a greater distance from nearby dwellings. At the same time the pending windmills will presumably be larger than present ones, so viewed from the nearby dwellings the pending windmills will appear larger on the horizon.
To evaluate the nuisance from existing windmills for households in the vicinity, an interview survey has been conducted. This survey shows that 13% of those living in the vicinity experience the windmills as a nuisance. When this nuisance – for those who have expressed it as such – is reckoned in cash terms on the basis of the respondents’ willingness to pay, the costs from this nuisance have been calculated to an average of DKK 982 per household per annum.
When this nuisance factor is place in relation to the electricity production from the windmills, a cost of DKK 0.0004 per kWh is obtained. If this cost is distributed among the different types of installation (single windmills, clusters and parks), it turns out that the cost is greatest for single windmills, where it can be worked out to be DKK 0.0011 per kWh, while the cost is DKK 0.0009 per kWh for clusters and DKK 0.0002 per kWh for windmill parks.
The third survey uses prices of houses in the vicinity of the windmills as a starting point. This study shows that houses which lie close to a single windmill are approx. DKK 16,200 cheaper than other houses – with parity of other factors – and houses which lie close to a windmill park with 12 windmills are DKK 94,000 cheaper – with parity of other factors. This shows that respondents are prepared to pay extra to obtain a house which does not lie close to a windmill. If this effect is set in relation to electricity production, this method yields a cost of just under DKK 0.01 per kWh for both single windmills and parks.
All in all these surveys show that the overall economic costs of the visual effect and noise from windmills are small compared with other costs of wind power. This applies regardless of which method is used. The low cost is primarily due to the fact that the costs only hit the relative few households in the vicinity of the windmills.
If one looks at the households around the windmills however, indications exist that – in certain cases – there are considerable costs for a few households. This is reflected in the fact that some households would be willing to pay a considerable amount p.a. in order to get rid of the windmills. It is also reflected in the fact that the households are willing to pay a higher price for houses which are not affected by windmills. So even though the overall economic costs of the visual effect and noise from windmills are small, it is not surprising that windmills in certain cases meet with resistance from the population.
It must be emphasized that not all of the results from this study are significant according to a significance criterion. This means that the observations mentioned could be due to coincidental factors. However, the feasibility of the study is strengthened by the fact that other studies reach the same results. This indicates that the lack of significance is only due to the fact that the data material is not sufficiently large.
In this study, only the costs for the households in the vicinity have been included in calculations. Presumably there would also be costs for others, as some people feel that windmills impinge on recreative elements in the open landscape. This means that the costs found are a minimum estimate of the real costs of an expansion of windmill installations.
In general terms, those living in the vicinity are compensated for the nuisance by the profit paid out by the windmill association. The study indicates, however, that it is the households not being co-owners of the windmills that experience them as the greatest nuisance.
Seen in relation to the small – from an overall perspective – cost of the noise and the visual effect from windmills and the distribution aspects (those living in the vicinity bear the costs, while everybody else enjoys the environmental improvements), consideration could be given to compensating those living in the vicinity for the nuisance to which they are subjected.