Clean industrial revolution promises £70bn economic boost

The UK has the potential to become a leading player in the global offshore wind and marine energy market, generating a £70bn economic boost and providing almost a quarter of a million jobs by 2050 – but only if the government steps up support for the embryonic industries.

That is the conclusion of a major new report from the government-backed Carbon Trust, which calls for an end to the government's perceived policy of offering "technology-neutral " backing for renewable energy and an increase in support for those technologies that promise the greatest strategic gains for the country's economy.

"These technologies are not green "nice to haves" but are critical to the economic recovery of the UK," said Tom Delay, Carbon Trust chief executive. "To reap the significant rewards from their successful development, we must prioritise and comprehensively back the technologies that offer the best chance of securing long-term carbon savings, jobs and revenue for Britain."

The study estimates that the UK could seize 45 per cent of the global offshore wind market by 2020, delivering £65bn of net economic value, primarily through exports, and generating 220,000 extra jobs by 2050. Similarly, it argues that with a quarter of the world's wave energy projects already located in the UK, the country has an opportunity to build a dominant position in the market, resulting in revenue of £2bn a year by 2050 and 16,000 new jobs by 2050.

However, it warns that greater government intervention is required to ensure these industries grow as expected and calls for fresh funding for marine projects and a major overhaul of offshore wind policy that would deliver new incentive mechanisms, a streamlined regulatory regime, and up to £600m in new R &D funding.

The government has already shown signs that it is willing to ditch the principle of technology neutrality, offering more generous support for offshore wind and marine energy than for other forms of renewable energy through its Renewables Obligation mechanism.

But the report, which comes just weeks ahead of the launch of the government's own renewables strategy document, calls for a more fundamental shift in incentive schemes that would result in "customise[d] innovation support for the prioritised technologies".

Defending the government's record on promoting renewables, minister for energy and climate change David Kidney said that significant financial support was already in place for both offshore wind and marine energy.

"We are determined to position our country as a hub of the advanced green manufacturing revolution," he said. "The £405m towards investment in low-carbon industries secured in the recent budget is a strong signal of our intention to realise that vision."

The report is likely to anger some within the renewables sector, most notably the solar lobby, which already feels that the government's strategy is too heavily weighted in favour of some technologies at the expense of solar.

However, the new report and accompanying campaign from the Carbon Trust has also secured high-profile backing from many academics and business leaders who agree that investment should be focused on the technologies that promise to deliver the best long-term returns.

"This campaign brings a welcome focus on how we can maximise UK economic benefit from the low-carbon revolution," said Dr Neil Bentley, director of business environment at business lobby group the CBI. "Government should work with industry to prioritise technology families with the greatest potential. Fully commercialised, low-carbon technologies need targeted research support, improvements to infrastructure and intelligent public procurement to help drive demand."

His comments were echoed by Maria McCaffery, chief executive of the British Wind Energy Association, who argued that greater tailoring of financial support for different renewable technologies would "allow the UK to cement its position as global market leaders in the green technologies identified".