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Linking Renewable Energy to Rural Development

image of Linking Renewable Energy to Rural Development

In many OECD countries, governments have invested large amounts of public money to support renewable energy (RE) development and are requiring significant quantities of it to be sold by energy providers. But what are the economic impacts of these policies on the rural regions where deployment takes place? How can RE bring the greatest benefit to host regions? These are some of the questions explored by this study. Drawing on case studies in 16 regions within 10 countries, the research finds that while RE indeed represents an opportunity for stimulating economic growth in rural communities, its development benefits are not automatic. Realising them requires a complex and flexible policy framework and a long-term strategy, as well as a realistic appreciation of the potential gains from RE deployment.  Making a positive connection between RE development and local economic growth will require more coherent strategies, the right set of local conditions, and a place-based approach to deployment. 

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Extremadura, Spain

Extremadura is in southwest Spain near the Portuguese border, and is one of the country’s 17 autonomous communities.1 The region is made up of two provinces, Badajoz and Cáceres. This predominantly rural region has a territory 41 634 km2 and a population of over 1.1 million. The population density (about 26 inhabitants per square km) is very low compared with the national average in Spain (91 in/km2; see Table 14.1). The region has a dispersed population pattern: out of its 385 municipalities, only three have more than 50 000 inhabitants (Badajoz, Cáceres, and Mérida), while 199 have less than 1 000 inhabitants.

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