(click on report cover to go to report download page)
Investment in UK offshore wind energy would create more jobs and generate higher GDP than reliance on gas-fired power, with only marginal impacts on electricity prices, according to a Cambridge Econometrics report ‘A Study into the Economics of Gas and Offshore Wind‘ published on 4 December 2012 by WWF-UK and Greenpeace.
“Much of the debate around the choice between gas-fired and offshore wind electricity generation in the years post-2020 assumes wind is more expensive.”
“This study presents powerful evidence to the contrary,” said Professor Paul Ekins, Professor of Resources and Environmental Policy at UCL.
The report was published before the UK Government was expected to announce its new Gas Generation Strategy alongside the Chancellor’s Autumn Statement.
And it follows a series of headlines about the cost to consumers of investment in green energy in the wake of the Energy Bill publication.
It compares a future scenario in which there is steady growth in offshore wind capacity through the 2020′s to a scenario where there’s no new offshore wind after 2020 and the UK uses significantly more gas for its electricity needs.
Investors have warned that the failure to include a 2030 decarbonisation target in the Energy Bill means investment in renewables could fall of a cliff after 2020.
The failure to provide certainty is likely to negatively impact current investment decisions in the UK supply chain and it is key that the UK Government sends positive signals to the offshore wind sector.
The report shows:
- UK GDP is £20 billion higher (0.8%) in the wind energy scenario than the gas energy scenario by 2030, with marginal impacts on electricity prices.
- 70,000 more full-time equivalent jobs would be created in the wind energy scenario than the gas energy scenario by 2030.
- By investing more in offshore wind the UK would save £8 billion a year on gas imports by 2030 – that works out at of £91 for every household in the UK
- Carbon emissions in the UK’s power sector by 2030 are some two thirds lower in the wind energy scenario than in the gas energy scenario.
The conclusions of the report are robust to a wide range of assumptions, including lower gas prices in the future.
“The results show it is a great economic, as well as environmental mistake not to include the 2030 target in the Energy Bill,” said Professor Ekins.
“Such a target, by giving greater assurance to investors of the post-2020 direction of travel of UK energy policy, is a no-regrets option, encouraging investors to locate their wind supply chain in the UK, but representing the right economic choice even if this does not happen.”
“The results are robust even to assumptions of lower than expected gas prices, and pessimistic assumptions about offshore wind supply chain development in the UK,” said Professor Ekins.
David Nussbaum, Chief Executive of WWF-UK, said “this report demonstrates that investing in wind for our electricity needs will be better for the UK economy than gas.”
“With the right long term policy signals for investors, offshore wind could provide more jobs, more prosperity and lower carbon emissions than gas.”
“The International Energy Agency and DECC are both forecasting continued increases in the price and imports of gas over the next 20 years, so too much dependence on gas would leave the UK very exposed to future price shocks.
“With the Energy Bill before the UK Parliament, it’s high time for the UK Government, and especially the Chancellor, to open their eyes to the benefits that wind and other renewables will deliver for both the economy and the environment, and seize this opportunity before it goes elsewhere,” he said.
“Investors are waiting to press play on billions of pounds of investment in renewable energy technology – all they’re asking for is long term certainty. The UK Government’s Energy Bill doesn’t currently give it,” said John Sauven, Greenpeace Executive Director.
“Investment in wind energy will allow us to kick our expensive and polluting gas habit. We already give billions to Qatar every year for gas imports – this report proves it would be much more prudent to invest that money in UK renewable energy instead,” he said.
