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THE WARREN REPORT
Andrew Warren is chairman of the British Energy Efficiency Federation
Jabs and jobs go arm in arm The potential for jobs creation in energy efficiency is immense. But this will only be realised if it is matched by government enthusiasm behind effective policies
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abs and jobs. These are likely to be 2021’s main political issues. Everyone involved with energy efficiency will be delighted with a roll-out of the first, as COVID 19 undoubtedly hindered investment activity during 2020. But there is no question that everyone involved with expanding energy efficiency investments will be able to help both secure existing employment opportunities, and vastly expand the numbers of those engaged in future. Spending on energy efficiency-related stimulus measures announced by developed governments worldwide to date is reckoned already to generate almost 2m full-time jobs between 2021 and 2023, according to International Energy Agency (IEA) analysis published in December. But worth remembering is that previous analysis, contained in the Sustainable Recovery publication in June from the very same IEA, estimated a job creation potential for energy efficiency of 4m. So long as recovery efforts are further targeted at channelling public and private sector investment into improving buildings, transport and industry. In other words, the actual number of new jobs which this sector can and gladly would provide, will be very dependent upon the enthusiasm behind and the effectiveness of any policies designed to promote energy efficiency. Many statistics are bandied around regarding the potential for such job creation, sometimes differing widely. But to establish where we are going, we need first of all to ascertain where we currently are. Fortunately, the Office for National Statistics collects the relevant UK figures. These form part of a sector of the workforce it describes as low carbon and
renewable energy economy (LCREE). The energy efficiency sector forms easily the largest component part of this sector. In 2018, it was responsible for 51 per cent of LCREE jobs, providing work for the equivalent of 114,000 full-time employees. To put this number into perspective, there are 49,800 people employed in the renewables businesses. And just 12,400 in nuclear energy generation and (mainly) reprocessing. Tellingly, although more than half the people in the sector are employed in energy efficiency, together they are only responsible for just 36 per cent of total sector turnover. All of which argues that either less capital is required per employee? Or the average person involved with reducing demand for energy receives significantly less pay than those involved in energy generation? Or quite possibly both.
Improve homes, create jobs How much can the numbers grow in the UK? Last July Chancellor Rishi Sunak set out a £2bn Green Homes grant scheme, part of a wider “over £3bn” plan to upgrade homes and public buildings. When first announced, the plan was set to improve 600,000 existing homes and sustain 100,000 jobs. In September, Treasury Minister Kemi Badenoch announced that, by including an extra 50,000 public sector buildings improvements, and a social housing programme, this initiative “could support 140,000 green jobs.” However, by November the then energy minister, Kwasi Kwarteng, was explaining to Lib Dem spokesperson Sarah Olney that 80,000 was now anticipated to be the “number of jobs created through the £1.5bn Green Homes Grant Voucher
‘The Prime Minister wants specific, realisable projects which will deliver results during the present decade’
scheme”. And that Ms Badenoch’s number related to the entire £3bn package. Whichever, spending £3bn to support 140,000 jobs is a pretty good bargain. It works out at just under £27,482 per person employed - a sum that includes all the materials installed and all the administration costs. It reflects the fact that acquiring a PhD is far from mandatory to install many energy-saving measures, and that a fair amount of the work can be undertaken by those who left school without necessarily acquiring a plethora of brilliant exam results. Increasingly, there are too few meaningful jobs around for such people, of all ages. This is a point emphasised by one of the most astute journalists around, Camilla Cavendish of the Financial Times (she served as a senior member at No 10 when David Cameron was there). She has observed just how substantial a role energy saving plays among the Prime Minister’s strenuous commitments towards meeting zero carbon targets over the next decade. We are entering a New Year which will close with an event which its original president, Claire Perry O’Neill, is describing as the most important of its kind to be held in Britain this century. Boris Johnson is challenging all the other heads of Government to come to Glasgow for the 26th Conference of the Parties (COP) to the 1997 Kyoto climate change treaty. He asks all attendees to arrive committed not just to delivering emission savings in a generation or two’s time. So not theoretical flights of physicists’ dreams that can’t be realised for 20 years or more. Instead, he wants specific, concrete, realisable projects which will deliver definite results during the present decade. In short, he wants to see the developed world implement that Sustainable Recovery agenda set out by the IEA last June. Where public and private sector investment is channelled into improving the energy efficiency of buildings, transport and industry. And where the energy efficiency employment creation potential will be measured in 4m jobs. Rather than just the almost 2m we have now across the developed world. Of whom just 140,000 are currently gainfully employed in the UK. JANUARY 2021 | ENERGY IN BUILDINGS & INDUSTRY | 09
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