Renewable energy is poised to create tens of thousands of new jobs and supply chain opportunities across the UK, once investors see the right confidence signals from governments. Jon Herbert considers the boom that should be happening.
From wild northern sea lochs to industrial estates in the heart of England, a latent mini-boom is in the making. Local communities and industrialists are waiting — often after months or years of campaigning — for final jigsaw pieces to fall into place that should trigger a surge in renewable energy capacity building.
Not only secure energy, but also long-term sustainable employment and radically changed livelihoods could follow. A new report predicts “tens of thousands” of new jobs and up to 32 new factories in the offshore wind sector alone.
The key is a Government buy-in to mandatory low-carbon levels that investors say will give them a clear confidence signal. Currently, coalition ministers are committed to the EU target whereby renewables will generate 20% of UK power by 2020. The industry says that is not enough.
Without a further commitment up to 2030, wind investors fear a possible collapse in demand, post-2020. No sane business decision involving large capital sums can be made on those terms, they argue. This could threaten jobs, supply chains and the potential for large, new manufacturing bases.
All eyes on the coalition
Several attempts have been made to force the Government into a clear commitment. Former Environment Minister, Tim Yeo, unsuccessfully tabled an amendment recently to the Energy Bill that would have forced the UK electricity sector into releasing not more than 50g of CO2 per kilowatt hour by 2030. That is seen to be the equivalent of decarbonisation.
Similarly, the independent Committee on Climate Change recommended as far back as 2008 “substantial decarbonisation of the power sector” by 2030 to meet the binding Climate Change Act 2008 carbon targets. The present position of coalition ministers is that no decision can be taken until after the next general election in 2016 when the next legally binding carbon budget is known.
Yet, the Government, and the Treasury in particular, have recently shown that they can take urgent action on energy when needed. The Chancellor was swift to announce virtually unprecedented benign tax concessions for “fracking” geological exploration across the UK — opening up the potential for hydraulic fracturing of impervious rock beds to release huge volumes of trapped natural gas.
A similar signal, this time in the form of a clear and unambiguous commitment to decarbonise the British energy sector — by a date carved in stone within the next decade and a half — could stimulate a matching bonanza. That would help the wind industry in particular, but also a range of other nascent low-carbon technologies.
This view is now shared by green campaigners, London lobbyists, MPs from all sides of the House, and communities and local politicians hundreds of miles away from the Westminster seat of power, whose lives could be totally transformed in a low-carbon future.
Visitors may see the UK as a small offshore European island. Those more familiar with the British Isles know that it is a long way from London to the offices of Comhairle nan Eilean Siar (the Western Isles Council) in the Outer Hebrides.
Where the summer night skies are light, but winter dawns and dusks come late and early, the concern is of a long-delayed, 50-mile, £700 million cable. If and when a subsea interconnector is laid to bring offshore wind, wave and tidal stream energy to the mainland, it is predicted that it will create both power and employment.
It is estimated that more than 10,000 new jobs will be generated by 2030 — some 3500 on the Western Isles, nearly 2900 on Shetland and more than 4500 on Orkney alone. Thousands more jobs could be created on transmission systems across the rest of the UK.
Britain will gain additional secure clean power, and local fuel poverty will be reduced on the Isles where income levels could rise and redefine lifestyles.
Everything presently depends on agreeing terms to lay the interconnector from Gravir on Lewis to Ullapool on the Wester Ross coast. Talks started in 2001 have still not reached a conclusion. Work could now be delayed until 2017, and local people are calling for urgent action.
Waiting in the wings is not only a subsea cable, but also support services, provisioning, supply chain needs, accommodation, transport facilities, specialist skills, and career opportunities that come with major strategic infrastructure projects.
However, it is not only in the remote, green-energy-rich north west that renewables promise a new economic stimulus.
Building an Industry is a new report prepared for Renewable UK, which estimates that tens of thousands of new jobs will be created by UK offshore wind farm projects.
The UK currently has circa 1000 offshore turbines. To take power-generating capacity up from the 3.3GW installed to date to 18GW will require about 4000 more. As with laying subsea cable, the supply chain implications are substantial.
If the turbine blades needed were laid end to end, apart from causing considerable disruption, it is calculated that they would stretch from London to Barcelona in Spain. If the turbine towers were similarly laid out in a line, they would reach from London to Cologne in Germany. The cables needed to connect individual turbines into the central grid system would stretch from London to Thailand.
There is also a major need for raw and manufactured materials. Several large, seagoing, offshore turbine installation vessels would be needed. Scores of vessels to take workers to and from operating turbines would be required far into the future.
Fabricated components, electrics and electronics, cables and wiring, gear systems, slew rings and motors, control, monitoring and telemetric systems, specialist support and maintenance services will be essential. So, too, will be a host of ancillary industries with cost-efficient skills in supplying everything from decompression chambers to sandwiches, specialist subsea surveys to teaspoons, and weather forecasts to lubricants, safety equipment and HR services.
Many UK companies would be drawn into this high-value supply chain.
It could lead to significant export opportunities, and skills training would be a priority, but there are extensive implications. It could be that as many as 32 new high-tech factories are needed. At present, only 10 have been built or are in the planning stage.
The “blue touch paper” would be a clear Government commitment. Building an Industry predicts that this will lead to a thriving manufacturing industry. Chief Executive of Renewables UK, Maria McCaffrey, has gone further. She believes that this is a once-in-a-generation opportunity.
“If we don’t seize it, the large-scale offshore wind supply chain factories of the future, making the blades, towers and foundations that we’ll need to retain the UK’s global lead in offshore wind, will be sited elsewhere,” she is reported to have warned.
“We are determined to work with the Government to ensure that the UK capitalises on this chance to build an industry that will be the envy of the world.”
All in good time
For the Government, Energy Minister Michael Fallon is adamant that the planned reforms to the electricity market will be key to encouraging low-carbon power generation and, thus, drive confidence in offshore wind.
“The UK leads the world in offshore wind,” he said recently. “This is a major success story and one we should all be proud of. Not only do we have more installed offshore wind, we also have the largest wind farms and a real knowledge-base about how to build offshore wind farms,” he added.
The Department of Energy and Climate Change (DECC) has insisted that, by 2020, more than 250,000 new jobs will come out of the Energy Bill. Some 81,000 will be in the nuclear industry. Renewables will generate 200,000 and a further 8000 will be associated with yet-to-emerge carbon capture and storage technology.
Fly in the ointment
Unfortunately, renewable investment in the UK has fallen to a four-year low, according to analytical figures from Bloomberg New Energy Finance (BNEF). Green energy investment fell from £7.5 billion in 2009 down to £5.3 billion in 2012. Loans available to help industry buy equipment for sizeable green energy projects have fallen even further, according to BNEF. Asset finance, other than for small-scale developments, dropped from £7.2 billion to £3 billion from 2009 to 2012. The chances are that it will dip below £1.9 billion during 2013, it forecasts.
DECC has said that renewable investment worldwide fell slightly across the globe in 2012. However, the UK drop was much less in comparison.
Meanwhile, another new report called Going for Growth, published by the Environmental Services Association and the Waste and Resources Action Programme , predicts that a further 10,000 new UK green jobs will be created in the waste sector by 2020.
Last reviewed 13 August 2013