‘Green’ jobs promise appears exaggerated

By Fiona Harvey, Environment Correspondent
Published: November 3 2008 03:09

Gordon Brown’s promises of a large number of new “green” jobs for the UK are unlikely to materialise, the Financial Times has found.
The prime minister has repeatedly promised employment creation in renewable energy of more than 160,000 new jobs by 2020, with further jobs in other environmental industries. The UK total could be less than half that, FT research suggests.
Many of the 160,000 jobs are likely to be generated overseas – for instance, in making wind turbines and other equipment in which the UK has only a tiny manufacturing base.
A Department of Energy and Climate Change official said: “The 160,000 jobs refers to global jobs created from meeting the UK’s 15 per cent target [for renewable energy generation] and does not include any estimates of the number of jobs in the UK associated with the global expansion in renewables.”
Another of the government’s estimates – that 10,000 new jobs would be created by its £100m electric cars initiative – is not based on research. An official told the FT the claim emerged from Department for Business expertise in the area.
Several leading industry observers have expressed scepticism over the government’s claims.
Qatar invests in UK renewable energy
Qatar is to set up a £250m fund to invest in low-carbon technology, primarily in the UK .
It will invest £250m in the Qatar-UK Clean Technology Investment Fund, with the rest to be sought from other investors. The fund will make venture capital investments in clean energy businesses.
The deal between the Qatari Investment Authority and the Carbon Trust, a UK government-funded body, marked a measure of success for Gordon Brown’s trip to the Middle Easton Sunday – part of his bid to attract new investment from oil-rich economies, as finance and credit have dried up in other markets.
Several governments in the Gulf region have begun showing interest in renewable energy in the past few years, amid rising concerns over finite oil reserves and climate change.
“I don’t see how they can get there on current form,” said Andrew Simms, policy director of the New Economics Foundation think tank.
Michael Liebreich, chief executive of New Energy Finance, a consultancy specialising in renewables, agreed: “We fear that expectations are being set unrealistically high by politicians who are making promises inconsistent with economic fundamentals.”
The prospect of new renewable energy jobs is seen as an important justification for adopting the European Union target of generating 20 per cent of energy from renewables by 2020. It would require the UK to generate 35 to 40 per cent of electricity from renewables.
A key plank in the government’s “green industrial strategy”, to be detailed by ministers next year, is attracting more renewable energy manufacturers to the UK – chiefly wind companies. Marine renewables, such as tidal and wave energy, are included in government plans but are in their infancy. The UK is unlikely to be able to tempt large, established wind turbine manufacturers to set up major operations. “The UK has missed the boat,” said Jim Dehlsen, chief executive of Clipper Windpower, a turbine maker.
The government hopes to kickstart a new industry – making wind turbines designed for use at sea. But the market for offshore turbines may be much less than the government predicts.
Offshore wind is two to three times more costly than onshore turbines. Most countries are concentrating on onshore wind. The US and China, rapidly becoming the biggest wind markets, have much land available and little need to expand offshore. Other European countries have fewer viable offshore wind sites than the UK.
Thus, the export market for UK-built offshore turbines is likely to be limited. Mr Dehlsen of Clipper, which recently set up a test facility in Blyth and plans to make offshore components there, said the UK was likely to be his biggest customer.
The number of people required to manufacture turbines is in doubt. Douglas-Westwood, which made the forecasts on which the UK’s renewable jobs estimate is based, assumed manufacturing each megawatt of wind capacity would generate three jobs directly.
“That sounds too high to me,” Mr Dehlsen said. He added that Clipper planned to produce 200 turbines a year at its plant, each capable of producing 7.5 to 10mw, by 2020. He expected the plant to employ 2,000 to 2,500 people, about a third to half the number implied by the government’s estimates.
An estimate by Bain and Company provides more evidence that the government’s job-creation claims are overblown. Bain found that if a third of the wind turbines needed to make the government’s renewable energy targets were made in the UK, it would create 36,000 jobs.
Copyright The Financial Times Limited 2008