Offshore wind better than gas for UK economy
4 December 2012
Investment in offshore wind would create more jobs and generate higher GDP than reliance on gas-fired power, with only marginal impacts on electricity prices, according to a Cambridge Econometrics report launched today (4 December) by WWF-UK and Greenpeace.
“Much of the debate around the choice between gas-fired and offshore wind electricity generation in the years post-2020 assumes wind is more expensive. This study presents powerful evidence to the contrary,” said Professor Paul Ekins, Professor of Resources and Environmental Policy at UCL.
The report comes a day before the Government is expected to announce its new Gas Generation Strategy alongside the Chancellor’s Autumn Statement. And it follows a series of sensationalist headlines about the cost to consumers of investment in green energy in the wake of the Energy Bill publication. 
It compares a future scenario in which there is steady growth in offshore wind capacity through the 2020s to a scenario where there’s no new offshore wind after 2020 and the UK uses significantly more gas for its electricity needs.
Investors have warned that the failure to include a 2030 decarbonisation target in the Energy Bill means investment in renewables could fall of a cliff after 2020. The failure to provide certainty is likely to negatively impact current investment decisions in the UK supply chain and it is key that Government sends positive signals to the offshore wind sector.
The report shows:
- UK GDP is £20bn higher (0.8%) in the wind scenario than the gas scenario by 2030, with marginal impacts on electricity prices.
- 70,000 more full-time equivalent jobs would be created in the wind scenario than the gas scenario by 2030.
- By investing more in offshore wind the UK would save £8bn a year on gas imports by 2030 – that works out at of £91 for every household in the UK 
- Carbon emissions in the UK’s power sector by 2030 are some two thirds lower in the wind scenario than in the gas scenario.
- The conclusions of the report are robust to a wide range of assumptions, including lower gas prices in the future.
David Nussbaum, Chief Executive of WWF-UK, said: “This report demonstrates that investing in wind for our electricity needs will be better for the UK economy than gas. With the right long term policy signals for investors, offshore wind could provide more jobs, more prosperity and lower carbon emissions than gas. The International Energy Agency and DECC are both forecasting continued increases in the price and imports of gas over the next 20 years, so too much dependence on gas would leave the UK very exposed to future price shocks.
“With the Energy Bill now before Parliament, it’s high time for the Government, and especially the Chancellor, to open their eyes to the benefits that wind and other renewables will deliver for both the economy and the environment, and seize this opportunity before it goes elsewhere.”
“Investors are waiting to press play on billions of pounds of investment in renewable energy technology – all they’re asking for is long term certainty. The Government’s Energy Bill doesn’t currently give it,” said Greenpeace Executive Director John Sauven.
“Investment in wind energy will allow us to kick our expensive and polluting gas habit. We already give billions to Qatar every year for gas imports – this report proves it would be much more prudent to invest that money in UK renewable energy instead.”
Notes to editors:
1. Greenpeace responds to claims that support for clean energy will increase bills (23.11.12): http://www.greenpeace.org.uk/media/press-releases/greenpeace-responds-claims-support-clean-energy-will-increase-bills-20121123
2. Calculation: £8bn extra gas imports for power sector, 30% of power use goes to domestic households (Source: Dukes 2011) = £2.4bn extra gas imports for domestic sector. £2.4bn/ 26.4m households (Source: ONS) = £91
3. WWF/Greenpeace report: A study into the economics of gas and offshore wind: http://assets.wwf.org.uk/downloads/a_study_into_the_economics_of_gas_and_offshore_wind_nov2012.pdf
For more information:
George Smeeton, Senior Press Officer WWF-UK
Tel: 01483 412 388, Mob: 07917 052 948, email: GSmeeton@wwf.org.uk