Renewable energy to deliver £12.6bn boost to UK trade balance

The UK Renewable Energy Association will tomorrow release a new study estimating that planned investment in renewable energy and energy efficiency improvements could improve the UK's balance of trade by up to £12.6bn a year by 2020.

The study, which was undertaken by research firm Delta-EE, will argue that with the UK expected to rely on imports for 80 per cent of its gas requirements by 2020, meeting the government's target to generate 15 per cent of energy from renewable sources by the same date could deliver a significant improvement in the country's trade deficit.

"We hear a lot about the cost of renewables, and not enough about the upsides," said Philip Wolfe, director general of the REA. "This report shows how investment in sustainable energy leads to huge and increasing savings for the UK economy through avoided fossil fuel imports… On top of the employment and export benefits, the energy balance of payments is yet another reason why investment in renewables is essential for the economy, as well as for the planet."

The study mirrors similar research undertaken by the German government in 2007, which revealed a net saving for German industry and households of €5bn as a result of the predicted reduction in fossil fuel imports that should result from increased renewables capacity.

The findings will lend further weight to calls from the renewable industry for increased financial support for the sector in this Wednesday's budget.

In related news, a group of renewable energy companies and lobby groups organised by Solarcentury chief executive Jeremy Leggett delivered a petition to 10 Downing Street this morning calling on the government to undertake urgent action to address the loss of green collar jobs from across the microgeneration sector.

A number of firms have laid off staff in recent months after the government scaled back its Low Carbon Building Programme – its main funding mechanism for onsite renewables. No new incentive scheme is planned until the introduction of a feed in tariff next year, and industry insiders are concerned that unless fresh funding is made available more businesses will go under before the new incentive mechanism is adopted.

"When I was asked to address the prime minister's jobs summit just three months ago, cabinet ministers assured me personally that green jobs and investment would lie at the very heart of the government's recovery programme," Leggett told The Observer yesterday. "And yet a few weeks later the reality is that we are once again scrabbling about trying to patch up an underfunded grant scheme ... and banging our heads against a brick wall of departmental delay and disinterest. The government appears to be sleep-walking to a green tech job-loss disaster of its own making."

Leggett's comments come just weeks after the British Wind Energy Association warned that the rising cost of imported wind turbines coupled with tightening credit conditions meant that large-scale wind-energy projects also required urgent financial support if they are to remain economically viable.