Energy can help power economic recovery
A new report published today highlights the central role the energy sector can play in powering the post-COVID-19 economic recovery.
Rebuilding the UK economy: Fairer, cleaner, more resilient, which has been produced by Energy UK in partnership with PWC, identifies five policy areas which could provide the stimulus for jobs, investment and growth - with the energy sector helping deliver widespread economic, environmental and societal benefits as part of a sustainable, green recovery focussed on the net-zero target. The five policies are:
- Launch a national housing infrastructure upgrade programme
- Further accelerate the transition to low carbon transportation
- Unlock further private investment in a digital, flexible and affordable, low carbon energy system
- Accelerate the development of regional industrial clusters and local supply chains
- Support people, businesses and local authorities to recover from the crisis
The energy sector already supports over 700,000 jobs (one in 46 jobs) in the UK. Delivering major infrastructure programmes to upgrade our housing, decarbonise transport and create a modern, flexible energy system could create hundreds of thousands more jobs across the country - both directly and indirectly through the supply chain and local economies.
The report states that an ambitious national programme to retrofit housing with energy efficiency measures, alongside the continuing installation of smart meters, would quickly create long term employment while cutting bills by hundreds of pounds for customers and reducing emissions. Equally a heat sector deal that supports the development and installation of low carbon alternatives to gas boilers - essential to reaching the net-zero target - would also provide nationwide job and re-training opportunities while also creating a market for the range of potential technologies.
New technologies could also create specialised industrial clusters around different regions of the UK – ensuring growth opportunities are shared across the country, helping local communities and businesses to recover from the crisis and creating a more resilient economy through the expansion of local supply chains.
The report highlights where, both immediately and over the next five years, the right mixture of policy framework, investment and incentives can accelerate the economic recovery and boost the UK’s efforts to tackle climate change.
With over half of the country’s electricity now generated from low carbon sources, the UK can also build on the sector’s track record of successful delivery and world-leading expertise in new technologies when continuing the transition to clean power and decarbonising the rest of the economy.
Audrey Gallacher, Energy UK’s interim chief executive, said:
“The pandemic has delivered a huge blow to the economy and people’s daily lives. The size of this impact must be matched by the scale of our recovery – and be mirrored by our ambition to transform our entire economy to meet the net-zero target.
“The need to kickstart our economy after this huge shock does however present an unprecedented opportunity to shape and reset our future which we must seize. We must ensure our recovery is based around creating a clean, sustainable and resilient low carbon economy which delivers opportunities and benefits across the whole country and for a population hit hard by this crisis.
“Energy is essential to our economy and our daily lives and is crucial to enabling a net-zero future, so it will play a central role in meeting these two challenges. The size and reach of our industry, coupled with the scale of the work needed to reach our net-zero ambitions, can provide the stimulus and opportunities we need - delivering the biggest payback on investment in terms of benefits to the economy, environment and customers.
“Our world-leading role in low carbon technologies means we have a head start, but to hold onto this position and reap the rewards we must act quickly before other countries steal a march. By working in partnership with Government to get the right policy framework and incentives in place, our industry stands ready to build further on the £14 billion it already invests every year to power our economic recovery and help meet the net zero target.”
According to Janine Freeman, PwC’s new energy leader, the onset of COVID-19, and attempts to mitigate its spread, has led to some rapid and significant changes to working practices, customer behaviour and demand for technology across the sector. She said:
“Lockdown has given us a glimpse into the energy system of the future: low electricity demand driven by the closure of businesses has caused periods of negative power prices. New system balancing measures have been required and we can expect to see an increasing need for such tools as our energy system transitions.
“The crisis has also made us think differently about the way we live and the world we want to live in. Public opinion has shifted on our reliance on global supply chains and on how we can harness digital technology to work and trade more remotely. So this terrible experience provides us with a unique opportunity - an opportunity to pivot and to create jobs in a fairer, cleaner and more resilient economy.
“And the energy industry sits right at the heart of this possible new future. There is now a golden window of opportunity for the industry to transform service models, develop new products and services in response to a greater focus on technology and sustainability, and to strengthen their relationships with customers.
“As we look to the future, it’s vital that power and utilities companies take charge in leading this debate for a fairer, cleaner and more sustainable future, helping to further consolidate the UK’s position as a leader in the green industrial revolution. As this report shows, government also has its role to play, developing stimulus packages that prioritise investments which boost the economy while enabling the pathway to net zero.”
Notes to Editors
- Read the full paper: “Rebuilding the UK economy: Fairer, cleaner, more resilient – How the energy transition can drive the economic recovery”
- Energy UK is the trade association for the GB energy industry, with a membership of over 100 suppliers, generators and stakeholders with a business interest in the production and supply of electricity and gas for domestic and business consumers. Our membership covers over 90% of both UK power generation and the energy supply market for UK homes. We represent the diverse nature of the UK’s energy industry – from established FTSE 100 companies right through to new, growing suppliers and generators, which now make up over half of our membership.
- About PwC - At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 276,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.