The UK's Transition to Net Zero: Achieving a Sustainable Future and Economic Growth through Renewable Energy Projects
The mission to Net Zero has become an imperative for countries worldwide, as they seek to mitigate the impacts of climate change and create a sustainable future for generations to come. This goal will drive widespread changes across the global economy, affecting almost every sector, either directly or indirectly. In many cases, it will create new economic activity, while in some, it may lead to sectors declining or stopping altogether.
The UK is well-positioned to take advantage of the net zero transition. McKinsey estimates that there is a global market opportunity of £1 trillion for British businesses by 2030, while the UK Government predicts that the transition can support 480,000 jobs in 2030. The UK has a comparative advantage over other advanced economies in several key areas, including offshore wind, carbon capture and storage, and green finance, and can capitalize on export opportunities from the global transition.
The costs for renewable technologies have fallen dramatically, and their use will reduce overall costs. In the last decade, costs for solar PVs and onshore wind in the UK have come down by 78% and 36%, respectively. The growth in clean energy sources has opened up new economic opportunities in the UK, with the energy sector contributing £40bn of the UK's gross value added and supporting 138,000 direct and 605,000 indirect jobs.
Renewables projects create jobs and growth across the UK. According to figures by the Association for Renewable Energy and Clean Technology (REA), over 140,000 people were already employed in the renewable energy and clean tech sector in 2021/22, with more than half in the power sector. They also predict that by 2035, the sector could support a further 70,000 jobs, and the market value could double to £46bn. According to RenewableUK, the offshore sector alone currently invests “around £10bn to the UK economy each year, supporting 31,000 jobs at present – but this is set to rise to 97,000 jobs by 2030, supported by £17bn a year of investment”. Green jobs tend to offer higher wages, which may reflect a mismatch in the supply and demand of certain skills, as well as productivity levels in different sectors. For example, gross value added (GVA) per worker for industries such as offshore wind and CCUS remains higher than the UK average.
As a first mover, the UK has specific advantages and export opportunities in offshore wind. The UK is home to hundreds of supply chain companies in offshore wind and is already exporting offshore wind goods. The UK has particular expertise in the second largest sub-sector market, operations, and maintenance. The value of those exports could increase fivefold to £2.6 billion by 2030 as global markets are expected to increase rapidly to £30bn per year and potentially reach 380GW by 2030.
In 2022, the economic context changed, which means the opportunities from net zero have never been greater. High fossil fuel prices are expected to remain high in the short-term, and there is uncertainty over their long-term future. As a result, markets are moving to capitalize on this.
Green jobs tend to offer higher wages, which may reflect a mismatch in the supply and demand of certain skills, as well as productivity levels in different sectors. For example, gross value added (GVA) per worker for industries such as offshore wind and CCUS remains higher than the UK average.
Phillip Fleetham, Director of Samuel Knight Projects, has stated “It's clear that transitioning to a net zero emissions future is not only vital for the environment, but also presents a massive economic opportunity for the UK. I look forward to seeing the progress and innovation in renewable technologies, and to witness the launch of new renewable energy projects as British businesses seize this opportunity.”