Local Added Value of the Geothermal Resources, Evidence from Poland

Abstract

Among the renewable energy resources geothermal is specific to a local production and consumption. Next to the heat and energy production, geothermal energy presents with opportunities for rural and suburban areas linking sustainable development goals with expansion of new local economy sectors. Therefore, we assume that the local utilization of geothermal resources delivers a local added value other than energy generation. Moreover, a change of a municipality economic structure is established when geothermal activities are introduced. The aim of this research is to fill in the gap in the literature and find an empirical link between the local use of the geothermal renewable and changes in the economy of the exploiting municipalities. We conduct an added value analysis for the five cases of the geothermal exploitation in Poland, comparing their economic structure with the reference of poviat and voivodeships as control group in 2005 and 2018. We chose municipalities with a cross-cutting use of the geothermal recourses in their economies and with different maturity of utilization. A shift share analysis of the local employment economic categories reveals a significant shifts in e.g. service sector employment in these geothermal localities. The hypothesis that the geothermal municipalities perform economically better than the poviat results corroborated.