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Renewables - The Great Hope

Author: Neil Humphreys

Category: Economy

Renewables – The Great Hope

Renewables, the great hope for future employment in the manufacturing sector – which frankly, successive governments have done not enough to help, respect and nurture.  But what is the real effect of the wind, wave, solar and energy from waste drive that is heralded by politicians as the employment opportunity to solve all ills?

Firstly, let us consider a little context, Wind Energy, which is the UK’s most likely volume sector, is far from new.  The industry has a seat of power in Denmark and beyond that with some new global players from the USA and increasingly from the Far East.  The structures are made up of Tower, Nacelle, Blades and then internal power-generation machinery (Generators and Drives).  So the technology is relatively straightforward and the specifications / supply chains for the big players already exist.  New developments are mainly focussed on scale and innovations in transferring power over great distances (HVDC).

So where does this leave the UK?  Frankly, I fear that we are currently performing a serious rear-guard action.  The key manufacturers are off-shore based, yes, we may have the benefit of some local work-share, assembly and instillation activity, but the profits will disappear off-shore at a rate of knots.  Wind is a terrific opportunity for a short term bubble in technician and operational roles, but once we have filled our shallow fishing grounds with turbines, what next?  Repair and overhaul, yes, it will create a baseline, but this is not a long term, sustainable sector.  The real growth and development opportunities for wind lie in India, China and the developing economies.  Shipping and transport costs mean that local assembly and manufacture is viable and that seals the UK’s fate.  We do not own the IP, let alone the companies who are players in this sector and so it is my firmly held belief that in the next 10 years we will see boom, followed closely by bust.

 We do have an opportunity in Wave Energy.  It is a relatively embryonic technology with potentially unlimited power-generating capability.  There is no established provider or global powerbase (IE Denmark) with a huge competitive advantage over the UK.  The bigger players in the market are investing in R&D and without immediate investment to support the sector, we will see the same effect as wind whereby the UK is left behind.

We in the UK need to understand the dynamics of the global energy-focussed capital equipment markets.  Yes, encourage investment in wind energy, but also spend tax-payers funds with a view to supporting those technologies which will create sustainable jobs for UK PLC.  At the very least, we should ensure a net benefit to the UK economy in terms of the balance of payments.  As unpalatable as it may seem in some quarters, especially when it becomes a NIMBY (not in my back yard) issue, it may well be that Nuclear is our most sensible option coupled with some more energy from waste schemes which have the dual effect of reducing landfill and creating power plants in exactly the conurbations where our demand is greatest.

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