Low carbon sector shrunk in 2015

Turnover by the UK low carbon and renewable energy (LCRE) sector was £43.1bn in 2015, down from £44.2bn in 2014, according to the Office for National Statistics (ONS). 

The government statistics body yesterday published its second estimation of the size of the sector in the UK. The data covers businesses working in offshore and onshore wind, solar PV, hydropower, energy efficiency, energy monitoring, low carbon financial or advisory services, low emissions vehicles, nuclear power and energy storage among others. 

The number of people employed in the sector and the value of imports and exports to and from LCRE businesses all declined between 2014 and 2015 (see table).

Low carbon and renewable energy economy, UK, 2014 and 2015

Source: ONS  

Frances O’Grady, general secretary of the Trades Union Congress, blamed the fall on the government: ‘Green tech is growing rapidly all over the world, but the government is failing to get us a piece of the action.

‘We’re losing out on good quality jobs, and falling behind the competition for the industries that will dominate the 21st century.’ 

However, the ONS advised caution in comparing year-on-year data, as it is still developing the methodology for estimating the size of the sector. It surveyed only 14,000 businesses in 2015 compared to around 40,000 when the survey was first carried out in 2014. 

Gemma Thomas, head of environmental accounts at the ONS, explained: ‘When the initial survey was done, we didn’t know anything about the sector in terms of which type of businesses were involved and where they were based.’ 

The survey was sent to a large number of companies in 2014 so that statisticians could learn more about the sector, which has enabled the ONS to target the latest survey at the most relevant businesses, she said. The weighting for the 2015 was changed to take the different sampling into account, which partially explains why the estimates for the size of the sector was smaller in 2015 than 2014.

The ONS has also published data on the value of the LCRE to the wider economy. In 2015, it was worth £34.6bn to the UK economy, generating £27.5bn in England, £5bn in Scotland, £1.3bn in Wales and £783m in Northern Ireland. 

The statistics body estimated that 198,500 people were employed indirectly by the sector in the UK in 2015 – 155,000 in England; 27,500 in Scotland, 10,000 in Wales 10,000; and 5,500 in Northern Ireland. 

The data on the impact of the sector on the wider economy is experimental and the methodology used to calculate it is under development, the ONS stressed, adding that it had published the figures to involve potential users in developing its approach further.

Firms manufacturing, selling or installing energy efficient products generated the highest turnover and had employed the most workerses, which the ONS believed was due to the relative labour intensity of the work compared with energy generation (see below).

Proportion of UK low carbon and renewable energy economy turnover and employment contributed by each low carbon and renewable energy sector

Source: ONS

Catherine Early is a freelance journalist.

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