Renewable policies branded economically damaging

With the government poised to unveil its Carbon Plan tomorrow and Energy Secretary Chris Huhne talking up “getting off the oil hook”, a report paints a damning picture of the […]

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By Kelvin Ross

With the government poised to unveil its Carbon Plan tomorrow and Energy Secretary Chris Huhne talking up “getting off the oil hook”, a report paints a damning picture of the impact of green policies on the wider UK industry.

The study concludes that renewable energy policies are “economically damaging” and that for every renewables job created in the UK, three jobs are lost.

And it also states that in Scotland in particular, “there is no net benefit from government support for the [renewables] sector, and probably a small net loss of jobs”.

The report, by consultants Verso Economics, was undertaken to examine the costs and benefits of government policies to support the renewable energy industry, first in Scotland and more widely in the UK.

With the Scottish government promoting and funding the renewables sector with more vigour than its counterpart in Westminster, the report tried to assess whether this support was justified.

The study found that electricity consumers and UK taxpayers subsidised the Scottish industry by £330m in 2009/2010, over and above subsidies paid for by Scottish taxpayers and consumers.

It stated: “To the extent that the Scottish industry is a success, it is reliant on the wider UK policymaking framework, in particular the Renewables Obligation Certificate scheme.”

The report’s authors found that the economic benefits that derive from the renewable energy sector are hard to assess, because “the industry is difficult to measure as a clearly-defined sector”.

However, it they claimed that “employment figures cited by those promoting renewable energy are often greatly exaggerated, exceeding official employment figures covering the whole of the energy sector”.

Using wider energy industry data and comparing this to estimates from government and industry bodies, Verso calculated that total direct employment in renewable energy generation could be estimated at 2,700 in the UK and 1,100 in Scotland in 2009/2010.

And the report concluded that “policy to promote the renewable electricity sector in both Scotland and the UK is economically damaging. Government should not see this as an economic opportunity, therefore, but should focus debate instead on whether these costs, and the damage done to the environment, are worth the candle in terms of climate change mitigation”.