Subsidised Green Jobs Killing Real Jobs

How subsidised jobs in green electricity have killed 6 times as many in the real economy

Introduction ONS Green Jobs

Since at least 2009, politicians of all stripes have been calling for variants of a Green Job Revolution. Gordon Brown promised to add 400,000 new “green” jobs, taking the total to 1.3m by 2017. More recently, the Labour Party has called for a Green Prosperity Plan to make Britain a green growth superpower. The Liberal Democrats have their own plans for green energy and a transport revolution. The Conservative Government has a 10-point plan for a green industrial revolution. Of course, for the Green Party no plan from any other party is ever enough and they always urge more action more quickly.  Others, such as Ben Pile have covered the abject failure of these policies to deliver their objectives. Suffice to say, according to the ONS, there were only 207,000 people working in the “green” sector in 2020, fewer than even the increase promised by Gordon Brown in 2009.

As was shown in earlier articles, there are lots of hidden costs to renewables and expensive electricity leads to lower productivity and reduced economic growth. When researching those articles, it became apparent that the productivity of the electricity production sector had been falling. The purpose of this article is to look at the productivity of electricity production and the impact on other sectors.

Productivity of UK Electricity Production

As two figures from a previous article indicate, the electricity sector looks to be high growth and high productivity, coupled with high investment intensity. However, another way of looking at the productivity of the electricity generation sector is output in TWh per hour worked. Combining data from the ONS and BEIS, it can be seen that the amount of electricity we supply has fallen and the number of hours worked in the sector has risen as shown in Figure 1.

Figure 1 - Electricity Supplied (TWh) vs Hours Worked in Electricity Generation (m) 1998-2021

This has resulted in a steady fall in the output productivity of the sector as measured by TWH per millions hours worked as shown in Figure 2.

Figure 2 - Productivity of Electricity Supplied 1998-2021 (TWh per m hours worked)

It should be noted that many of the jobs in the intermittent renewable energy sector are subsidised jobs. Subsidised by Renewable Obligation Certificates (ROCs), Contracts for Difference (CfDs) and Feed-in-Tariff payments (FiTs). Plus, we all have to pay the grid balancing costs required because of the intermittency of wind and solar power.

Jobs in Energy Intensive Productive Sectors

Now let’s take a look at what’s happened to employment in energy intensive industries. As Figure 3 shows, in 1997, there were some 2,248m hours worked in the sector. This had fallen to 1,550m by 2008 and fell another 20% or so to 1,237m hours in 2021.

Figure 3 - Hours Worked Energy Intensive Industries (1997-2021)

By contrast, hours worked in electricity (plus gas and compressed air) rose nearly 25% from 208m hours in 2008 to 259m hours in 2021. Pulling it all together in Figure 4, the gain in electricity production of 51m hours was offset by a loss of 312m hours in energy intensive industries.

Figure 4 - Hours Worked Energy Intensive Industries vs Electricity Supply (1997-2021)

Conclusion: Subsidised Green Jobs Taking Jobs in Energy Intensive Industries

In other words, the loss in highly productive industries was some six times higher than the gain in subsidised electricity production.

It is difficult to believe that subsidising jobs in primary electricity production at the expense of highly productive jobs in the private sector is good for the long term health of the economy.

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