I highly recommend reading David Turver’s important article published today which I am reposting for your ease of reference.
In it he sets forth the astronomical costs involved in paying for the much hyped ‘new employment’ which the so-called “green revolution” will allegedly provide. This truly nefarious agenda involves carpeting rural Wales with not clean, not green nor “cheap” unreliable industrial wind and solar plants.
The faux green agenda has nought to do with allegedly saving the planet and everything to do with profits for developers and their shareholders.
Recently, Shadow Energy Secretary Ed Miliband has been promoting his party’s “Green Prosperity Plan” again.
Ed Miliband promoting Green Prosperity Plan
Interestingly, he was “ratioed”, meaning he received more replies than likes, so maybe the public is starting to rumble his ruse. Nevertheless, he is likely to be in the Cabinet after the election, so we need to pay attention to what he says. Labour claim that their plan will “deliver more jobs, more investment and lower bills.” Time to look at how much these mythical jobs in the renewable sector cost us and hazard a guess at whether they stand a chance of delivering the promised prosperity.
How Many Green Jobs Are There?
From time to time, the ONS publishes an assessment of Low Carbon and Renewable Energy Economy (LCREE). This covers the number of businesses, turnover and how many jobs are involved in the LCREE. Helpfully, they break down the figures by sector, including offshore wind, onshore wind and solar power. The latest available figures for 2021, show the number of full-time equivalent jobs in the UK for these sectors was 10,600, 5,000 and 6,400, respectively.
How Much do Wind and Solar Power Receive in Subsidy?
There are three subsidy regimes for renewable energy in the UK. These are Feed-in-Tariffs (FiTs), Renewables Obligation Certificates (ROCs) and Contracts for Difference (CfDs).
Each year Ofgem publish the FiT report and dataset that details the total amount of electricity generated, total payments and the capacity installed by technology. In scheme year 12, running from April 2021 to March 2022, 79.4% of FiT capacity was solar and 11.9% wind. The rest was made up of hydro and anaerobic digestion plants. The total payments under the FiT scheme were £1,557m. If we split these payments by capacity, we can determine that solar power received £1,236m in FiT payments and wind (assumed to be onshore) received £185m.
Details of ROCs issued can be found on the Ofgem portal. The value of ROCs related to the output period of the whole of 2021 was £2,009m for offshore wind, £1,251m for onshore wind and £493m for solar power.
The Low Carbon Contracts Company publishes a database of CfD payments that can also be split by technology. This shows that offshore wind received £612m in 2021. This figure is lower than might be expected because gas prices started to spike in late-2021 and so some CfD-funded wind farms started to refund money under the CfD scheme. Because strike prices for onshore wind and solar power tend to be lower than for offshore wind, these two technologies paid back £22m and £204m, respectively.
The total subsidies in 2021 for these three sectors is around £5.56bn. This compares to the ONS estimate of £14.56bn turnover for the same sectors. Putting it another way, 38% of the turnover is pure subsidy.
What is the Cost of Green Jobs?
Pulling all this together, we can add up the total subsidy received for these technologies and compare it to the number of jobs in each sector.
Cost of Green Jobs for offshore wind, onshore wind and solar power 2021 (£ per job)
We can see that each offshore wind job cost £247K in subsidy, each onshore wind job nearly £283K and solar £238K. The average across all three sectors is nearly £253K per job.
Now remember, this is not a one-off payment to get a new industry up and running, it is an ongoing annual payment. The ONS does not publish its estimate of the salaries in the sector, however, the annual subsidies are far higher than any reasonable estimate of the average salaries paid in the sector.
Conclusions
It is crystal clear that all talk of a “green revolution” is simply a pipedream. These green jobs are only a façade, Potemkin jobs to give politicians and policymakers a good sound bite and make them feel good about themselves. The idea that we can move to “Green Prosperity” by subsidising each job to the tune of over £250K is plainly absurd. If we take any further steps down this “green prosperity” road, we risk bankrupting the nation.
Former World Bank economist and former Professor of Political Economy at the University of Edinburgh, Gordon Hughes whose invaluable work I have shared in the past made the following comment on David’s article:
David - The sad thing is that it has been known for well over a decade that the "green jobs" vision is nonsense. I wrote about it back in 2011, summarising a whole lot of data and academic evidence. Nothing significant has changed since then and it is good to see your take on the matter. But, there are none so blind as will not see.
If you step away from the particular claims about green jobs, one encounters all kinds of variants from the arts and culture to sport and infant industries. Many of them are underpinned by incompetent and (occasionally) dishonest economists who are happy to act as shills for their clients.
A bigger issue, especially among politicians, is the complete failure to understand that things have to add up. You can fund all kinds of investment in renewable energy or whatever and that money will create visible employment. However, the claims ignore the fact that the money has to come from somewhere - either current taxes or future taxes via borrowing. Diverting money reduces expenditures and employment in the rest of the economy and that may have very high costs but ones that are less visible.
In your calculations it is simple to show that we would all be better off by paying £50,000 per job to do nothing and forgetting the rest. A classic version of digging holes and filling them in again. Of course, even better to do nothing, but I think that it is best just to describe Milliband's delusions as an exercise in hole-digging.
I'll confess to having solar panels with the Fit scheme. My leccy bill is on the low user end and the payments used to cover my huge gas bill. However, the subsidies paid to produce all this non-green green energy is shocking, raising costs and putting many into fuel poverty and businesses no longer able to make a profit.
I for sure can't see any COST in there... Only PROFIT for the few!
I'll confess to having solar panels with the Fit scheme. My leccy bill is on the low user end and the payments used to cover my huge gas bill. However, the subsidies paid to produce all this non-green green energy is shocking, raising costs and putting many into fuel poverty and businesses no longer able to make a profit.