NCPA - National Center for Policy Analysis

Report Details Impact of Government Support for Renewable Energy

March 4, 2011

A new report from Verso Economics examines the costs and benefits of government policy to support the renewable energy industry in Scotland and the United Kingdom (England, Wales and Northern Ireland).  The report's key finding is that for every job created in the United Kingdom in renewable energy, 3.7 jobs are lost.  In Scotland there is no net benefit from government support for the sector, and probably a small net loss of jobs, says Verso Economics.

  • The main policy tool used to promote renewable energy generation is the Renewables Obligation, which effectively raises the market price paid for electricity from renewable sources.
  • This scheme costs electricity consumers £1.1 billion (about $1.8 billion) in the United Kingdom and around £100 million (about $163 million) in Scotland in 2009-2010.
  • In addition, both the U.K. and Scottish Governments have introduced a wide range of grants and subsidies for the renewables industry.
  • These are estimated at £188 million (about $306 million) U.K.-wide and an additional £22 million (about $36 million) in Scotland in 2009-2010.
  • The renewable energy sector imposes other indirect costs on the economy, mainly from its impact on the local environment and landscape.
  • In total, measurable policies to promote renewable energy cost £1.4 billion (about $2.3 billion) U.K.-wide and £168 million (about $274 million) in Scotland in 2009-2010.

Source: Richard Marsh and Tom Miers, "Worth the Candle?" Verso Economics, March 2011.

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