Sustainables jobs surge fades as wind farms face axe

The so-called “green jobs” boom in renewable energy has not lived up to the hype. As government policy flip-flops in favour of one form of energy to another – one minute offshore wind, the next minute, fracking – investors are losing faith. In March, SSE, the big energy company, announced a freeze to its bills until 2016, at the expense of 500 jobs and its involvement with several offshore wind parks. In the past year too, the second phase of the world’s largest offshore wind farm, the London Array, was scrapped; energy group RWE ditched its Atlantic Array and Scottish Power Renewables dropped plans for an Argyll Array.

Global investment in clean energy fell 12 per cent in 2013 according to Bloomberg. So are we watching the nails go in the coffin of an unaffordable technology? And has the green jobs bubble burst along with it?

The UK government’s Energy Act 2013 and Electricity Market Reform were intended to bring some calm. But the early response from the market has not been positive.

Dan Lewis, energy policy adviser to the Institute of Directors, says: “It’s quite hard to go to the market and say ‘I need to raise this much cash for these types of projects – oh and by the way, we’re seeing subsidies cut across Europe, so we don’t know what it is going to cost’.”

Even while investors come to terms with yet more policy change, it is not time for fossil fuels to dance on the grave of renewables just yet. Neil Robertson, chief executive of energy sector skills body, EU Skills, argues that renewable energy is just not “scaling up as fast” as once expected. “When you look at it in the cold light of day, we’ve still got an ambitious agenda here.”

The UK has a legal obligation to meet 15 per cent of its energy demand from renewable sources by 2020, up from only 4.1 per cent in 2012. According to EU Skills, there are 34,500 people now working in wind, wave and tidal energy; by 2023 the group expects this to increase to 52,540, even accounting for the recent “marked scaling back of ambition”. Meanwhile, the UK solar sector is thought to employ a further 15,620 people.

Mr Robertson bemoans the “extremely unhelpful and uninformed debate about green taxes” but argues that “it doesn’t change the message: there’s going to be lots of jobs in this sector . . . new roles in designing, building, manufacturing, commissioning and operating new green energy, plus a whole new energy management sector will emerge”.

Alongside skills shortages in engineering, the sector is in need of financial acumen – ironically due in part to the uncertainty that new regulatory and subsidy mechanisms bring to project finance.

“It’s all financial risk,” says Mr Robertson. “I would be able to count on one hand the top financial thinkers in this area and I know many of them: in a year’s time that will be a whole new industry.”

Solar entrepreneur Jeremy Leggett, founder and chairman of Solarcentury, says the sector has been hit especially hard by dramatic cuts to subsidies. Yet due to the reduction in the price of solar technology, “we will not need the FITs [feed-in-tariff subsidy] after 2020”, he says.

Rather than questioning the affordability of renewable power, Mr Leggett argues that traditional energy and utilities should be put in the spotlight. “Analysts talk about a death spiral for the utility model in Europe [… yet] there are times now in Germany where 75 per cent of the nation’s electricity is being generated by wind and solar and around half of that is owned by individuals and communities. So where do the utility companies go? Where are the jobs? The jobs are going down to the local level.”

Entrepreneurs are still finding gaps to move into.

Angus McCrone, senior analyst at Bloomberg New Energy Finance, says entrepreneurs are positioning themselves in project development and project installation. “There will also be some successful companies that emerge in the [offshore wind] supply chain making small parts or supplying services or logistical support,” he says.

Jobs will also appear in energy demand, rather than simply supply. “We’ve got an emerging market for automated demand response,” says Ben Warren, head of energy and environmental finance at EY, referring to energy management practices that respond to peaks and troughs in demand, and turn off devices when not needed. “There’s plenty of room for people to come in.”

Paul Thompson, head of policy at the Renewable Energy Association, points to renewables used to generate heat and biofuel.

“Renewable heat is a sector where we see considerable employment increases in coming years,” he says. “Sustainable biofuels too is an area where the UK could unlock jobs and growth, especially in the regions”.

By 2030, the world will have shifted from creating two-thirds of its power by burning fossil fuels to using renewables for more than 60 per cent of new capacity, with renewables garnering 65 per cent of the $7.7tn of investment, Bloomberg New Energy Finance predicts. Economics – not policy – will increasingly drive the use of renewable technology.

“Whatever governments do around policy,” and even if the chaotic policies of the past five years continue, Mr Warren expects that “we will still see more and more renewable energy deployment. The need is only ever going to increase.”

Hopes of a green energy jobs boom may have faded, but today’s wobbles are no death sentence either.

Fonte. Financial Times