Renewables sector growth far outpaces economy
Ahead of tomorrow’s GDP figures, today’s renewable sector report shows it is growing at least 10 times faster than national growth rates. All its sub-sectors (solar, wind power, etc) exceeded the UK’s national GDP growth rate April 2009–April 2010 of 1.4%. The weighted average growth across the sector during this period is 11%. Feed-in tariffs and the renewable heat incentive have propelled further expansion since then.
Renewable sectors growth rates (%) 2009-2010
Source: Renewable energy: Made in Britain, 2012.
According to the Renewable Energy Association (REA) report, Renewable energy: Made in Britain, total UK turnover for all renewables and their supply chains in 2010/11 was around £12.5 billion.
The UK’s 6,500 renewable energy companies now employ over 110,000 workers. Publicly funded incentives for renewables deployment have therefore been highly effective at leveraging in private investment. In this new study, presenting the facts of its contribution to economic recovery, jobs, skills and Treasury revenues, the industry stands up for itself. The question is, When will the government do the same?
Here are two barriers the report highlights:
Technology support: Some technologies require “urgent policy attention, due to policy failures, or lack of political support for, biomass CHP, dedicated biomass, onshore wind, solar thermal, liquid biofuels, on-farm anaerobic digestion and deep geothermal. Likewise some important mid-sized investors, including the commercial and public sectors, risk falling through the emerging policy framework which is polarised towards targeting either big utility or micro domestic investors.”
Skills shortages: “BIS could transform this threat into a vast national employment opportunity. Given market failures, the current approach to the skills challenge is inadequate and risks failing to optimise employment benefits at a time of worrying outlook for unemployment. At the high-skills end of the renewable energy sector we face a demographic time bomb. More care is needed to provide clear career entry paths into renewable energy for young people, unemployed people and those transferring from the traditional energy industries. As with many engineering and
infrastructure sectors, renewable energy falls short with respect to recruiting women and ethnic minorities.”
Fast forward, then to next week’s meeting of the Green Economy Council (1 May), due to debate the UK’s skills strategy, with, naturally, a focus on green growth. A standout point from research by the Skills for a Green Economy Group centres on the need for government ownership and “single point” leadership. Fast growing sectors like renewables lack the capacity to train for future growth – that’s the role of government. The REA puts it this way:
“Many of our members are coping with a policy framework in which
determination to minimise subsidy, with potentially self-defeating haste,
appears to be the only certainty. This leaves no ‘fat’ to invest in skills. Out
in the real world our SME members are more likely to be dealing with pressing
problems, such as access to finance, than engaging strategically with employer
groups on future skills needs. For small and innovative companies staff
turnover can be high and there can be a reluctance to invest scarce resources
in personnel that may be poached by competitors. Where growth is strong, and it
needs to be in renewable energy, staff are needed urgently – companies cannot
afford for new recruits to undertake months of training.”