Alex Henney argues that the government has been over-optimistic in estimating the number of new jobs that will be created as a result of its low-carbon power policies

 A press release from the Department of Energy and Climate Change (Decc) on 3 June introducing the Energy Bill claimed that “250,000 energy sector jobs will be supported around the UK as a result of the Energy Bill”, a figure I queried.  The response was:-“The figure reflects estimates of how many jobs could be supported by low carbon electricity (including in supply chains) by 2020:-

• Between 69,000 and 81,000 jobs in nuclear energy by 2020, which is made up of between 29,000 and 41,000 jobs across the nuclear supply chain at the peak of construction activity, in 2020, from the  16GW of new build capacity industry is planning to build by 2030 plus 40,000 currently employed in nuclear energy
• Around 8,000 jobs could be supported in the early stages of CCS deployment by 2020”
•  Up to 200,000 jobs in renewable electricity by 2020

 

Perhaps DECC has not noticed that although there may be 3.2GW of nuclear building in 2020 no way is another 12.5GW in the bag.  The figure for CCS will depend upon the success of the design, which has just commenced, and what happens when a decision is made in mid 2015 remains to be seen.

The 200,000 is based on an estimate by the Renewable Energy Association, which has a vested interest in inflating the figure. The Renewable Energy Association claims that there are currently about 100,000 people in renewables employment, which has a broad definition. Its report notes that “renewables are not currently covered by the SIC categorisation in detail and this had led to a lack of robust data on jobs associated with the sector.”

The problem is highlighted by the claims for jobs in 2010/11 in onshore wind (including supply chain) of 15,200 and in offshore wind of 16,200, which represents about 30% of renewable jobs; the respective installed capacities at the end of 2011 were 4.7GW and 1.8GW.  These figures compare with the US where by the end of 2012 60GW was installed and 80,700 people were employed, of whom approximately 25,500 were in the manufacturing sector. Virtually all US wind turbines are manufactured in the US, while in the UK most of the equipment is manufactured abroad. Excluding manufacturing, 55,000 people are employed in the US for 60GW, while supposedly 31,000 are employed in Britain for 6.5GW. Even allowing for the higher manpower per GW required for offshore wind, these figures do not make sense.  How many other renewables figures do not make sense?  Even by the government’s standards these are flaky figures.

On 11 September Decc responded to my questions over its figures for renewable energy jobs as follows

“The figure represents an estimate of the number of jobs needed throughout the supply chain to deliver the low carbon infrastructure required to meet emissions reduction and renewable energy targets. It is important to note that this does not give an estimate of the overall or net outcome on UK employment – rather just the number of jobs supported by low carbon electricity – since a number of both negative and positive wider impacts will not be accounted for.

 

“As you are aware, these jobs figures are based on Renewable Energy: Made in Britain (2012), a report produced by the Renewable Energy Association (REA). The REA commissioned independent researcher Innovas Solutions to produce a methodology to inform the report. They drew on over 700 sources to provide an extensive data source for the report. This encompassed activities undertaken by companies across the renewable supply chain, commercial research and development, through manufacturing and distribution, retail, installation, and maintenance services.”

 

Finally: these are gross, not net figures. Perhaps Decc has not yet worked out that spending money on subsidising more, rather than less, expensive means of making a product (viz electricity), pulls money from other parts of the economy and on a net basis destroys jobs.

 

From New Power, September 2013.

Also in this issue:

Fallon accused of cherry-picking figures as companies halt gas storage

Cutting the cost of offshore wind

CCGTs: mothball, close, or hold on?

For more details email [email protected]

Alex Henney is the author of The British Electric
Industry 1990–10: the rise and demise of competition, and a regular commentator on the UK energy industry. See www.alexhenney.com