“Green Industrial Revolution” and the long-term effect of renewable electricity on UK employment

25 Nov 2020

Decarbonisation of the UK energy mix and employment impact

By Theodoros Arvanitopoulos and Paolo Agnolucci 

Renewable energy sources and low-carbon technologies are a key component in the mitigation of climate change and UK government policies have been facilitating the transition to renewable technologies. In 2019, UK wind farms, solar panels, biomass, and hydro plants generated more electricity than coal, oil, and gas combined. However, this means carbon-intensive technologies are gradually being abandoned with a consequent reduction in employment. What could be the long-term employment impact in the UK power generation sector?

In our recent paper, published in Renewable and Sustainable Energy Reviews, we explored this in detail, and we provide a summary of our analysis and findings below.

Modelling the employment impact of power generation technologies

The long-term employment impact of power generation technologies depends on the state of the economy and the extent to which they are used in the supply mix. In our analysis we made a number of assumptions:

  • The number of jobs in a representative firm is determined by the firm’s expectation of future electricity demand and supply.
  • Employment is measured by the number of workforce jobs in the UK Major Power Producers firms.
  • Electricity is generated by conventional thermal (oil and coal), combined cycle gas turbine (CCGT), nuclear and renewable technologies.

We used the Vector Error Correction (VECM) econometric methodology for our analysis. The findings were then combined with national decarbonisation scenarios outlined in the UKERC – The Security of UK Energy Futures report, to estimate the expected future employment effect and assess the impact of decarbonisation pathways on employment.

The long-term employment impact of renewable electricity

In our paper, we found that increasing annual renewable electricity supply by 1 gigawatt hours can create 3.5 long-term jobs in the UK power sector. In fact, the long-term employment impact (per gigawatt hour) of renewable electricity is six-time larger than the impact of nuclear electricity. Overall we found that 75% of renewable energy jobs are sustainable in the long-term.

With regards to the implications for national decarbonisation scenarios, our findings highlight that employment levels can vary significantly, depending on the energy mix of electricity generation. When considering the decarbonisation scenarios outlined in the Security of UK Energy Futures report, renewable electricity has the potential to create up to 150,000 net jobs by 2030. On average, it is expected to generate 55,000 net jobs according to the 5 UKTM decarbonisation scenarios (excluding the “energy island” scenario that is used as a counterfactual).

Green Industrial Revolution

On Tuesday, 17th of November, UK Prime Minister Boris Johnson announced a 10 point plan for ‘Green Recovery’. The plan will mobilise a budget of £12 billion that can potentially generate up to 250,000 jobs. Offshore wind power capacity is expected to increase from 30 gigawatts to 40 gigawatts mobilising 160m for relevant upgrades. In his announcement, Boris stated that growth in offshore wind farms will create 2,000 jobs in construction and support 60,000 more [BBC].

Our analysis shows that renewable electricity could have a considerable positive long-term employment effect, far beyond 60,000 long-term sustainable jobs expected by the government. This arises from an expected reduction in the cost of solar generation technology and the fact that the UK has already the largest global capacity in offshore wind energy.

Decarbonising the UK economy could help address both the climate and economic emergencies. The prospect of a double dip recession and increasing unemployment reminds us of the importance of bold political actions. The deployment of renewables can substantially help the UK economic recovery.

Our own research shows the importance of policymakers supporting further deployment of renewable electricity technologies. The recent government announcement on ‘Green Recovery’ is a welcomed first step in this direction.

Access the full scientific paper published in Renewable and Sustainable Energy Reviews

About the authors

Theodoros Arvanitopoulos is a Doctoral Researcher at the UCL Institute for Sustainable Resources and Senior Research Associate at the UEA Tyndall Centre for Climate Change Research.

Paolo Agnolucci is an Associate Professor at UCL Institute for Sustainable Resources