THE economic payback from the offshore wind industry could see it wipe out most of the UK’s current trade gap by 2030, a report today claims.
The Centre for Economics & Business Research (CEBR) argues that a more-aggressive approach to investing in the sector could reap rewards of an annual 1 per cent uplift to gross domestic product (GDP), the creation of up to 215,000 jobs and an increase in net exports of some £22.5 billion.
The report comes as Ian Marchant, chief executive of Perth-based utility group SSE, prepared to warn MPs today that consumers will be forced to pay higher energy bills for many years ahead to fund subsidies to French energy giant EDF, which wants to build a fleet of nuclear power stations.
The CEBR report – commissioned by renewables developer Mainstream Renewable Power, whose proposed projects include a 450 megawatt offshore wind farm in the outer Firth of Forth off the Fife coast – estimated that, under current investment plans, the sector will create 45,000 jobs by 2015, over 97,000 by 2020 and 173,000 by 2030.
It predicts that the rapid expansion of offshore wind farms around the UK coast will lead to development of technology and expertise that will deliver significant spin-off benefits in overseas trade.
Eddie O’Connor, chief executive of Mainstream Renewable Power, which has a base in Glasgow, said the report’s findings were “truly significant”.
“We have embarked on a transition to a sustainable economy. All forms of renewable energy, from solar energy to tidal energy, will contribute to delivering this transition in the UK. But offshore wind provides this country with a clear global comparative advantage.
“By creating a new industry, offshore wind will create jobs, assist in balancing the trade deficit and boost GDP at a time of economic uncertainty.”
The report comes two weeks after the UK government published a draft energy bill detailing a major shake-up of the sector under Electricity Market Reform (EMR) plans aimed at keeping the lights on, minimising increases in bills and meeting climate change targets.
Speaking ahead of a House of Commons committee hearing, Marchant warned that, if the legislation went ahead in its current form, it would be something the “UK will live to regret”.
Marchant, whose company is the UK’s largest renewable generator, said that the reforms would make investing in renewables more expensive and were geared towards “making nuclear fit in”.
He added EMR was “fixing a problem we do not have” given a fall in gas prices, reduced electricity demand and extensions to the life expectancy of some ageing power stations.
His comments came as a United Nations report published yesterday showed that renewable energy sources supplied 16.7 per cent of global energy consumption in 2011. The $257bn (£165bn) of investment in the sector was a 17 per cent increase on the previous year and up 94 per cent on 2007.
But last year’s total was still 15 per cent lower than the investment that went into fossil power generation.
Meanwhile, a survey by KPMG of corporate dealmakers in Scotland has found that more than two-thirds believe the energy sector, including renewables, is likely to drive much of the M&A activity in the year ahead.
Craig Anderson, senior partner at KPMG in Scotland, said the sector was benefiting from a buoyant global market and “Scotland’s reputation as a world leader in this field”.