The economy would be £20 billion a year better off in 20 years with a focus on wind power over gas, a new report reveals today.
The report, “A Study into the Economics of Gas and Offshore Wind”, by Cambridge Econometrics, finds that, compared to a more gas-dependent future, with large-scale investment in offshore wind:
• GDP would be 0.64% higher by 2025, rising to 0.82% higher by 2030;
• There would be 100,000 additional jobs by 2025, falling to 70,000 additional jobs by 2030.
The report also challenges the claim electricity produced by gas-fired plants will be much cheaper indefinitely, pointing out that, by 2030:
“…electricity prices in the WIND scenario are only 1% higher than in the GAS scenario in 2030; a very small difference compared to possible variation in relative prices caused by other factors such as changes in gas prices.”
There are also other major benefits for the UK economy:
“The construction work for large-scale investment in offshore wind boosts GDP and creates jobs (which are mainly high skilled) in the UK. However… currently much of the investment is in equipment that is produced overseas. The GAS scenario also relies heavily on imports (of natural gas) but captures revenues for government through the carbon price floor.
“In the WIND scenario the UK pays slightly more for electricity but more of the value added of the supply chain is located in the UK. Total UK imports of natural gas are 45% lower in the WIND scenario by 2030, a reduction of almost £8bn annually.”
And, crucially, for the environment:
“UK power sector CO2 emissions in the WIND scenario would be one-third of those in the GAS scenario in 2030, even though some gas-fired power is needed to provide backup when there is insufficient wind to meet power demand.
“The development of offshore wind capacity envisaged in the WIND scenario, coupled with other low carbon sources and measures to deal with the intermittency, meets the CCC’s recommended target for the carbon intensity of the UK’s power generation target of 50gCO2/kWh by 2030 and would reduce total annual emissions in the UK by 50MtCO2 by 2030.
“The lock in to offshore wind would support decarbonisation consistent with the UK’s legally binding emissions target for 2050 and encourage the development of the UK as an offshore wind technology leader.”
Something you’d imagine the ‘greenest government ever’ would support – instead of which, we have the prospect of George Osborne placing fossil fuel at the heart of UK energy policy in the autumn statement tomorrow, a ‘dash for gas’ as economically unsound as it is environmentally.
Will Straw, associate director for globalisation and climate change at IPPR, said:
“The litmus test of the government’s energy bill was whether it included a target to decarbonise the power sector by 2030. For political reasons, they have decided to fudge the decision until 2016.
“The folly of that move has been laid bare by this new independent report which shows that a 2030 decarbonisation target would have delivered jobs, growth and less reliance on imported gas. MPs and Lords must now consider putting both the good of the economy and climate first by passing an amendment to the energy bill.”