Two years ago, the Offshore Valuation Group measured the value of the UK’s offshore renewable energy resource and concluded that, by 2050 – by harnessing less than a third of that resource – the UK could generate the electricity equivalent of 1 billion barrels of oil a year, reduce its CO2 emissions by 1 billion tonnes and create over 145,000 new jobs.
This June 2012 Cebr/MRP report builds on that work by exploring the impact of planned investment in offshore wind electricity generating capacity in the UK. It concludes that that investment can be expected:
- By 2015 to increase UK GDP by 0.2%, and create over 45,000 full time jobs, delivering employment and economic growth at a time of economic fragility.
- By 2020, to double that GDP contribution to 0.4%, and the number of people employed to over 97,000.
- By 2030 to triple that GDP contribution to 0.6%, and sustain 173,000 jobs. These benefits will accrue from pursuing current build out rates of offshore wind. A more aggressive, but achievable, approach could see an annual 1% uplift to GDP, and the creation of up to 215,000 jobs, and in addition, the sector could deliver an increase in net exports of £22.5bn, sufficient to almost entirely plug the UK’s current balance of trade deficit.
Furthermore, a foreign trade multiplier (FTM) analysis of the impact of increasing levels of offshore wind investments and exports leads Cebr to contend that significant multiplier impacts can be expected to derive from investment in offshore wind.
Commenting, Eddie O’Connor, CEO of Mainstream Renewable Power said “The “Value of Offshore Wind” to the UK is truly significant. Cebr shows that the net economic benefit to UK plc from investment in offshore wind is considerable. The foreign trade multiplier effect is of particular interest to a sector which has the potential to supply a global market. By helping the UK reduce fossil fuel imports, and 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.”
Oliver Hogan, Head of Microeconomics at Cebr and principal author of the report said: “The current economic circumstances and the competitive challenges facing the UK highlight the importance of taking actions to improve the country’s trade balance. Such actions, by acting directly on the factor that is constraining growth, can be expected to have particularly important foreign trade multiplier impacts.
“It is Cebr’s contention that, given the positive impacts on the UK’s balance of trade outlined in our report, these significant multiplier impacts can be expected to derive from investment in offshore wind.”