Over a million workers depend on the UK’s net zero economy – reports

The UK’s net zero economy now underpins the jobs of 1.1 million UK workers, and supports over 22000 small businesses, who together generate £105 billion in Gross Value Added (GVA) for the UK economy, a new report commissioned by the Energy and Climate Intelligence Unit (ECIU) with analysis provided by the independent consultancy CBI Economics and The Data City, has found.

From solar panel installers to electric car production line engineers, these workers generate £119,300 in economic value per full-time job, around 1.5 times the national average – against the backdrop of the UK’s wider productivity stagnation. This leads to higher wages, with net zero jobs earning £43,142, 11% higher than the current national average of £39,039. 

This, the fourth annual report on the scale and nature of the UK’s net zero economy, found 22,700 small firms (employing less than 50 people) and six ‘billion-pound’ economic hotspots spread across the UK including in Scottish Central Belt, West and North Yorkshire, and North Wales and Cheshire. Yorkshire and the Humber region leads the way in England with the highest shares of net zero GVA as a proportion of the local GVA (4.4%). Yorkshire and the Humber’s net zero economy supports over 79,000 jobs. 

Looking across the UK the report found: 

• The net zero economy supported employment equivalent to 1.1 million full-time jobs, with 308,000 supported directly by the activity of net zero businesses (twice as many as the motor vehicles sector at 153,000), a further 520,000 being supported in the supply chain and 234,000 through the wider economy.  

• The net zero economy generated £105 billion in GVA for the UK economy, with £36.7 billion generated directly by net zero businesses (more than the engineering/architectural sector at £36.2 billion), £51.2 billion generated through the supply chain and £16.8 billion generated through induced economic activity.  

• For every £1 in value generated by the net zero economy a further £1.85 is generated in the wider economy.

• Jobs supported by net zero businesses were 48%, or 1.5 times, more productive than the UK average, generating £119,300 in economic value per full-time job. This led to higher-than-average wages, with these jobs generating an average of £43,142 to a full-time worker.

• With over 96% of firms classified as SMEs (22,700 firms, 15,807 plus 4,882 with less than 50 employees), the UK’s net zero economy is underpinned by a deep and entrepreneurial business base - strengthening supply chains, supporting innovation, and enhancing the UK’s competitive position in a rapidly expanding global market.

The UK’s renewable energy pipeline represents a £455bn investment opportunity across 262GW of capacity, with two-thirds already in active or construction phases, highlighting both the value and scale of development required to deliver clean power. 

Louise Hellem

Louise Hellem, CBI Chief Economist, said

“Across energy, manufacturing, services and supply chains, the UK has the expertise to build on this strength and capture even greater commercial opportunities. 

At a time when the UK must strengthen energy security and drive growth, the net zero economy is becoming central to the country’s future competitiveness.

With global competition intensifying, government and business must work together to attract investment and scale up delivery. The UK cannot afford to step back from an industry already contributing £100bn to the economy and with huge future growth potential.” 

Darren Davidson Image: Siemens Energy

Darren Davidson, UK Vice President for Siemens Energy, added

“We welcome the findings of this report because they underline something those of us in the industry can already see clearly: the energy transition is not only essential for the UK’s future, it’s already creating skilled jobs, driving investment and revitalising communities right across the country. 

“In my view, there has never been a more exciting time to work in the energy sector. We are transforming how Britain powers homes, businesses and industry, and that means creating long-term opportunities for people with the skills, ambition and commitment to build a cleaner, more secure energy system. 

“At Siemens Energy, we employ more than 7,500 people across the UK, including at our offshore wind blade factory in Hull, currently celebrating its 10th anniversary. We are especially proud that the vast majority of colleagues there call the Humber home. That is exactly what the net zero economy should look like in practice: world-class industry creating lasting value and opportunity in local communities.” 

A separate report commissioned by RenewableUK shows that expanding the UK’s onshore wind supply chain between now and 2050 could add up to £56 billion in economic value (GVA) to the UK’s economy and create thousands of new jobs throughout the country.

Adding this £56 billion to the £98bn which will be generated by our current onshore wind supply chain between now and 2050 (as long as Government policy remains supportive) would bring a total of £154 billion in GVA for the UK.

The onshore wind supply chain capability assessmentby consultants Everoze highlights key parts of the supply chain which would provide the most value to the UK’s economy. These include manufacturing more onshore wind turbine blades, towers and steelwork, nacelles, drivetrains, cables and electrical equipment for high voltage substations in the UK for onshore wind farms here and abroad.

The “Renewable” report also notes that the UK has a strong track record in providing high-value replacement parts to refurbish onshore wind turbines and that we should continue to focus on this. Expanding this part of the supply chain is identified as the easiest win for UK-based companies.

Around 70% of lifecycle spend by UK onshore wind projects already takes place in the UK, with supply chain companies based all over the country.

It notes that the UK’s onshore wind capacity is expected to grow from 16 gigawatts now to over 50GW by 2050 under an ambitious deployment scenario, following the lifting of the de facto onshore wind ban in England two years ago.

Much of the additional onshore wind generating capacity will come from ‘repowering’ the UK’s older onshore wind farms, where older turbines are replaced with newer and more powerful models, and makes three key recommendations for the onshore wind industry and Government:

1. Industry should work with the Government to make the case for investing in new UK manufacturing facilities by highlighting synergies with other parts of the energy sector such as offshore wind, as some companies can supply both markets to maximise their return on investment.

2. Ensure the UK’s industrial base is cost-competitive at home and abroad by reducing the cost of electricity for manufacturers and cutting taxes and tariffs for specific onshore wind components.

3. Focus on refurbishing and repowering onshore turbines as these areas offer major opportunities to grow the supply chain.

James Robottom Image: Instagram

 RenewableUK’s Head of Onshore Wind Delivery James Robottom said:

“Onshore wind is an engine for significant economic growth in the UK. This report highlights the strong pipeline of onshore wind projects coming online between now and 2050, with capacity expected to increase more than threefold. We already have supply chain companies across the country delivering high levels of spend in the UK from our onshore wind farms, but more can be done to grow this sector and create thousands of new jobs by investing in new factories to manufacture more components for projects here and abroad.

“As our report shows, industry can play its part by focussing specifically on the highest value components and services, while Government also has a key role in reducing taxes and tariffs, as well as taking effective measures to bring down the cost of electricity for industrial users which are long overdue”.