Last month, the UK’s Committee on Climate Change released the Renewable Energy Review. The review focuses on two key areas: firstly, whether or not the Governments renewable targets for 2020 should be raised, and secondly, to provide more detailed advice beyond 2020.
The report compares the viability of a whole host of renewable and low carbon technologies including, wind power, photo-voltaics, tidal energy, wave, nuclear power and carbon capture and storage. The report also touches on the ongoing debate between greens and the nuclear lobby over how much wind and nuclear energy should contribute to the UK’s future energy mix.
According to the report, consumers are likely to be paying between 5p and 10p per kWh for nuclear energy and between 7p and 13.5p for wind (at a 10% discount rate). On costs alone, it would seem that nuclear is edging out wind as the most economical option.
However, one aspect that the report does not quantify in detail is the economic benefit which the UK will gain from strategically nurturing either the nuclear or wind industries. The UK’s growth in both of these industries will derive from firstly deploying and maintaining the new generation output and secondly, by exporting ancillary services and manufactured products.
At first glance, there would seem to be a huge potential to export manufacturing expertise and services on the back of successful local deployments. For wind power especially, it is easy to see how the UK could become a market leader. As one of the windiest countries in the world, the UK has the potential to generate over 400TWh per year from offshore wind energy, which represents double the energy currently generated by the UK’s nuclear reactors.
To add some figures to the debate, the following table compares the economic benefits in terms of jobs and GDP for both the wind and nuclear industries between now and 2050. Nuclear energy is forecasted in the report to still be a large contributor to the UK’s energy mix in 2050, but it is not expected to grow significantly. In contrast, the Carbon Trust expects that the UK could employ up to 230,000 people in the wind energy sector by 2050, with 80% of those employed in the export sector. This could mean a contribution of £10 billion to year on year GDP by 2050.
Economic Benefits of Nuclear & Wind Energy in the UK
|Table 1: A Comparison of the Expected Economic Benefits in terms of GDP and Employment for both Nuclear Power & Wind Power in the UK between 2010 and 2050.|
|Percentage of Generation||20%||20%||4.4%||20% to 50%|
|Employees||40,000||40,000*||10,800||80k to 230k|
|GDP||£3.3 billion||£3.3 billion*||~£250 million||£10 billion|
|* Assuming figures scale in proportion with generation output with all valuations in today’s money.|
Just how much benefit the UK gains from its development as a UK wind energy hub will depend on many factors, not least the competitiveness and quality of the manufacturing and services offered within the UK. However, the potential for extra economic benefits adds an additional argument for the development of the UK’s offshore wind capacity that is sadly lacking form the climate change report.