Value of UK renewables and clean tech sector could double by 2035

The annual industry report from the Association for Renewable Energy and Clean Technology paints a bleak picture of the UK’s green policy landscape, describing it as inconsistent and unreliable. Despite the current challenges, the report underscores the potential for significant growth in the UK’s renewable energy and clean technology sectors, with the market value potentially exceeding £46 billion over the next 12 years.

As of now, these sectors employ over 140,000 individuals and contribute around £23 billion to the economy. However, the report suggests that with the implementation of effective policies and regulations, these sectors could double in value by 2035, reaching £46 billion, while also creating 210,000 jobs in the process. Such growth would enable the government to achieve its ambitious target of a net-zero emission power system by 2035 and meet legally binding emissions goals set for the mid-2030s.

Nonetheless, the report sounds a cautionary note, emphasizing that substantial policy gaps persist in crucial clean tech areas such as green heating, zero-emission transport, and the circular economy. Addressing these gaps is essential to meet climate objectives and fully leverage the economic potential of these sectors.

The report echoes the sentiments expressed in several recent publications, emphasizing that consistent and proactive government support is essential. Without such support, the UK’s clean tech industries will struggle to compete globally and fulfill their role in achieving the country’s legally mandated climate targets.

In recent weeks, the government has faced criticism for rolling back green policies, including postponing the ban on the sale of new internal combustion engine vehicles to 2035 and scrapping energy efficiency targets for rented properties. These policy shifts have raised concerns, especially in light of the economic and environmental benefits associated with the journey towards achieving net-zero emissions.

The REA warned the ensuing policy and political uncertainty meant “renewable developers are hurting and international investment risks going elsewhere”.

Dr Nina Skorupska, chief executive at the trade body, said there was an “urgent need to unlock policy and investment blockages” in support of the UK green economy.

“While we continued to see the dynamic resilience of the renewable energy and clean technology sector over 2022 through the energy crisis, as well as months of political and policy uncertainty, we are not immune to real world economic forces,” she said. “Indeed, at times it can feel as if we are wading through treacle when repeatedly being challenged to make the economic case for net zero.”

Skorupska expressed exasperation at the ongoing need for the UK’s renewables and clean tech sectors to continually defend their economic significance, despite the substantial growth of the market and the multitude of jobs it generates.

“Even though it has been proven countless times that the energy transition is as much an economic opportunity as an environmental imperative, our sector still finds itself having to overcome naysayers time and time again,” she said.

The report underscores the potential regional economic advantages of pushing further and faster towards achieving net-zero emissions. It argues that while the current green economy is heavily concentrated in London and the South East, with the right backing, clean tech initiatives could spread jobs and investment more evenly across every region and nation in the UK.

The projections suggest a substantial 111% surge in the green market value for the North East of England by 2035. Moreover, the entire North region is anticipated to sustain around 30,600 jobs, with Yorkshire and the Humber contributing an additional 12,700 jobs.

Skorupska emphasized that the report reveals a promising outlook for the UK’s green energy and clean tech sectors, with the potential to add thousands of jobs and billions of pounds to the economy over the next decade. However, she noted that these figures could be even more substantial if the government provides the necessary policy support.

“We are clear, tackling climate change and boosting our economy is not an ‘either-or’ decision,” she added. “In fact, it goes hand in hand. I would urge the government to recognise the opportunities on offer for our country and finally match their warm words with action.”

Despite recent reversals in green policy, the government maintains its steadfast commitment to achieving the UK’s mandated climate objectives and expanding its clean energy capacity.

In an official statement, the Department for Energy Security and Net Zero emphasized that the UK has consistently exceeded past climate targets and has drawn in approximately £120 billion in investments for renewable energy over the last 13 years. Furthermore, it anticipates attracting an additional £100 billion in green energy investments by the year 2030. This demonstrates the government’s continued dedication to advancing its clean energy agenda.

“We are adopting a fairer and more pragmatic approach to meeting net zero that eases the burdens on working people,” it said in a statement. “The government remains completely committed to its net zero commitments, set out in law. Our targets keep us on track to meet that legal commitment, and to meet international commitments including those under the Paris Agreement.”