New pre-budget report quantifies UK balance-of-trade benefits of renewables and energy efficiency investments, Renewable Energy Association
Release Date: 2009-04-20
An REA commissioned report, by Delta, highlights the benefits to UK balance-of-trade of investing in renewables and energy efficiency.
A new report estimates that the UK’s proposed push for energy efficiency and renewables could result in a trade balance benefit for the UK economy of up to £12.6bn per annum by 2020 [1].
The UK is projected to be reliant on imports for potentially 80% of its gas needs by 2020 [2] with huge cost and energy security implications. The IEA has predicted serious energy ‘crunches’ before 2020, despite the global recession.
The report’s findings add to the jobs and export benefits already identified [3] and contribute to the burgeoning economic case for investing in renewables and energy efficiency in the UK budget. A comprehensive cost/benefit study was carried out by the German Government on their green energy programme in 2007, showing net savings for industry and households of 5 billion Euros by 2020, as fossil fuel imports drop [4]. No such study has been carried out by the UK government prompting the Renewable Energy Association to commission the energy balance of trade report from Delta-EE
Governments have been urged by Lord Stern in a G20 report [5] to act quickly during the recession to support their renewable energy industries. Many have taken decisive action [6]. Yet the UK renewables industry has received no support to date and is facing the loss of key funding programmes. Lord Stern told the G20 that the next economic crisis would be ‘pre-programmed’ without a speedy transition to a low-carbon energy system.
Philip Wolfe, Director General of the REA said;
“We hear a lot about the cost of renewables, and not enough about the upsides. This report shows how investment in sustainable energy leads to huge and increasing savings for the UK economy through avoided fossil fuel imports. Politicians say we cannot afford not to go green – this report helps spell out why. On top of the employment and export benefits, the energy balance of payments is yet another reason why investment in renewables is essential for the economy, as well as for the planet.”
Notes:
1. The full report can be seen below or on the REA website (http://www.r-e-a.net/document-library/policy/DELTA_REABalenceofPaymentReport). The Association acknowledges the support of the European Climate Foundation in commissioning this report.
2. Projection in 2008 Energy Markets Outlook, BERR. The UK is the biggest gas consumer in Europe.
3. A large number of reports, including those from IPPR, TUC, Green New Deal Group and Lord Stern (see below) have set out the employment/economic benefits of renewables investment during the recession. Last month’s launch of the government’s Low Carbon Industrial Vision projected 1 million jobs by 2015 and a share of the £3 trillion world market. Conservative and Liberal Democrat strategies for a new sustainable economy similarly highlight these opportunities
4. The analysis of the German sustainable energy measures showed that by 2020 the avoided imports saved €36bn, against an implementation cost of €31bn leading to savings for German industry and consumers. The German analysis assumed very conservative oil and gas prices of just $65 per barrel. The German programme aims to cut CO2 by 40% and increase renewable energy to 20% of total energy by 2020. The findings were published by the Federal Ministry for the Environment, Nature Conservation and Nuclear safety. It was calculated therefore that each tonne of CO2 emissions avoided represented a €26 saving to their economy. Renewable energy made the biggest saving to CO2 cuts. See ‘Climate protection programme will lead to savings of five billion euro’ published at: http://www.bmu.de/english/current_press_releases/pm/40276.php
5. Professor Lord Nick Stern prepared the original report on the costs of Climate Change for the Treasury, when Gordon Brown was Chancellor. He was subsequently co-author of a report recommending that at least 20% of any stimulus packages towards recovery from the recession should be deployed on green measures. His recommendations prior to the G20 Summit included:
"Green recovery measures promise to be superior to deficit-financed spending on consumption from a public finance perspective, because tax-payers implicitly receive compensation for higher future taxes in the form of decreased expenses on energy and lower costs of abating GHG emissions."
"If frims suppling [sustainable] technologies were to collapse in the current crisis, society would not only lose employment and growth opportunities, but also stocks of technology, human capital and organisations that are difficult and time-consuming to rebuild".
6. HSBC Bank’s analysis ‘A Climate of Recovery? The Green Dimension to Economic Stimulus Plans’ showed that ‘green’ stimulus accounted for 12% of the recent US package, averaged 15% in France and Germany, while China at 37% exceeded Sterns’ recommended 20%. The UK percentage was listed as ‘pending’.
The Renewable Energy Association (REA) is the industrial body for the UK’s renewables industry. Its 600 members cover all renewable energy types and all scales from the energy majors to emerging companies in new energy technologies. The REA has proposed budget measures for centralised and decentralised renewables and for infrastructure and training, estimated at a total of £695m. See: http://www.r-e-a.net/policy/REA-policy/EnergyDeal
Delta Energy and Environment is a consultancy providing commercial insight and market expertise in: Low carbon strategies and decentralised energy including electric transport and energy efficiency
| Type: | NORMAL |
| Company: | Renewable Energy Association |
| Country: | United Kingdom |
| Url: | http://www.r-e-a.net/info/rea-news/new-pre-budget-report-quantifies-uk-balance-of-trade-benefits-of-renewables-and-energy-efficiency-investments/ |