The UK's renewable energy industry is worth £12.5 billion and supports 110,000 jobs across the supply chain – with a further 400,000 needed to meet 2020 renewables targets, according to new research published today.
‘Renewable Energy: Made in Britain,’ a ground-breaking new report from the REA and Innovas, leaders in the low carbon economy field, has been launched on the eve of this week's Clean Energy Ministerial Summit.
The study marks the first time that the turnover and employment figures of the entire UK renewables sector have been quantified and brought together in one place.
Other key findings of the report include:
• the increase in weighted average market value from 2009/10 to 2010/11 was 11% - outstripping economic growth over the same period (1.4%) by a factor of eight;
• failure to meet the UK's renewable energy targets, and importing 80% of gas from abroad, will cumulatively cost the country £60 billion to 2020;
• in this scenario, the UK would spend £11 billion – or £425 per household – on fossil fuel imports in 2020.
These findings come just days after the European Commission identified the green economy as a “key sector” offering “important job creation potential,” with renewables alone claimed to provide up to 3 million jobs across the EU to 2020.
Launching the report, REA Chief Executive Gaynor Hartnell said: “When it comes to the employment, economic and energy challenges we face, this report gives a clear answer: Make it renewable, and make it in Britain.”
And Climate Change Minister Greg Barker, added: “Renewable energy not only provides us with clean and secure energy that cuts our reliance on imported fossil fuels - it generates billions of pounds of investment and potentially hundreds and thousands of jobs and is a key growth sector for the UK economy.
“The REA’s report sets out plainly the opportunities and challenges in this area. We are determined to seize the momentum and secure maximum benefit for the UK.”
The report makes it clear that the UK is facing challenges on several fronts, but that taking a joined-up approach which treats all of these problems together will create the single most important economic opportunity of this generation.
It claims that while the Government has shown strong leadership and made great strides in offshore wind and marine renewables, a framework is required which ensures link-up between all relevant departments to capitalise on the full range of benefits offered by renewables.
It suggests this could be achieved by relaunching the Office for Renewable Energy Deployment, currently housed within DECC, as a cross-departmental office chaired by the Prime Minister and Deputy Prime Minister.
Additional recommendations, outlined in the report, include:
• the appointment of a BIS Minister with a renewable energy remit;
• the recording of employment figures in renewables by the Office for National Statistics;
• the routine assessment of the economic benefits of renewable energy by HMT;
• and the publication of a national strategy for renewable energy skills.
The report claims a strategy is crucial, as the skills “time bomb” is both the major obstacle to achieving the green growth vision, and also the major opportunity for putting disillusioned graduates, the unemployed, and those in low paid work into high value careers.
The report's analysis on UK balance of trade figures shows failure to meet the renewable energy target will be costly. With imports expected to account for up to 80% of the UK's gas needs by 2020 under business as usual, the report costs this dependency at £60 billion cumulative to 2020.
Without the renewable energy targets the UK will spend £11 billion on fossil imports in 2020, or £425 per household - money better invested in supporting domestic growth in domestic jobs.
The report exposes the portrayal of renewable energy as expensive as utterly wrong. Analysis from the International Energy Agency shows that globally renewables receive just one sixth of the subsidy of fossil fuels, while analysis from Ofgem and the Committee on Climate Change reveals that renewable energy policies have only added a fraction to energy bills compared to increases caused by spiking wholesale gas prices.
The report includes a regional breakdown which shows that the employment and economic opportunities are widely distributed across the country. It sets out over 30 case studies of UK innovation and manufacturing across over 15 technologies including:
• highly competitive manufacturing innovation in solar thermal;
• biofuels produced from waste;
• the deepest onshore wells ever to be drilled in the UK for the first deep geothermal power plant;
• the use of biomass heat to green Scotland's whisky industry and stabilise energy bills;
• pyrolysis and gasification producing clean synthetic gas from old tyres and hazardous wastes;
• green gas for lorry driver filling up on the M6;
• remanufacturing of Chinese solar cells into innovative building-integrated products;
• world-leading device innovation in marine energy systems;
• a start-up company that’s reached £25 million turnover in just five years.
Tim Yeo, REA President and Chair of the Environmental Audit Committee’s 2009 inquiry into ‘Green Jobs and Skills,’ said: “The growth of the renewable energy industry is a really positive story for the UK and this report provides a great synopsis of our current position and the opportunities for the future.
“The Government must lead the way with a clearer and more systematic approach to developing the skills required to ensure a shortage does not derail the industry’s continued expansion.”
And John Cridland, Director-General of the CBI, said: “Renewables will play a key role in the development of the low-carbon economy, helping to diversify the UK energy mix whilst also providing opportunities for economic growth and new jobs.”
Frances O’Grady, Deputy General Secretary of the TUC, said: “This report makes the strongest case yet to show that green opportunities, and the jobs the sector has the potential to create, can provide decent, highly skilled employment to people whose jobs are being lost as a result of changes in the global economy.
“The Government’s green challenge is now to do all it can to create the investment climate to generate the green jobs we need to meet our 2020 target.”
John Adkins, Group MD of Myriad CEG, said: “This excellent report clearly shows that with a bit more long-term, joined-up thinking from Government the renewable energy sector can reach its true potential, as both a driver of employment and economic growth.”