Environmental goods sector outstrips rest of UK economy

The UK's environmental goods and services sector (EGSS) grew almost four times faster than the wider economy between 2010-2015, the latest Office for National Statistics (ONS) figures have revealed.

The latest ONS data bulletin reveals that the sector’s growth considerably outperformed the wider economy, contributing £62.5bn of output in 2015 – an increase of nearly 8% on 2014 levels and 27% compared to 2010. In contrast, overall UK GDP growth in 2015 stood at 2.2%.

In terms of gross value added (GVA), the EGSS contributed £30.5bn to the nation’s economy in 2015, up 23% since 2010. With this financial spurt came job growth – ONS data confirmed that the sector had 335,000 full-time equivalent jobs at the end of 2015, up 10% over the five-year period.

The ONS’ definition of the EGSS covers a range of green industries, including renewables generation, waste management and recycling, wastewater, and environmental consultancy.

Waste management continued to be the largest single source of economic activity and employment within the sector, accounting for 23% of its output and 30% of its employment as of 2015.

However, the renewables industry recorded the strongest growth, with output and GVA nearly trebling between 2010 and 2015, from £4.6bn to £12.8bn and £2.3bn to £6.2bn respectively. These trends are supported by figures from the Digest of UK Energy Statistics, which show that the amount of energy generated from renewable sources tripled over the same period from 26,180GWh to 83,403GWh.

Despite this growth, the renewables sector continued to represent a relatively small proportion of total EGSS employment in all five years, with just a 4% proportion in 2015. The ONS claims this proves that producing renewable energy requires relatively few employees to produce a high level of output and GVA.

Sustainable trends?

An ONS bulletin on the low-carbon and renewable energy (LCRE) sectors, published in January, similarly noted that green industries grew at almost treble the rate of the wider economy during 2016. The LCRE data showed how green sectors grew 5%to £42.6bn in 2016, up from £40.5bn in 2015, while overall GDP growth for the year stood at 1.8%.

But despite these trends and predictions that Britain is on course for a subsidy-free renewables “revolution” set to add 18GW of new capacity by 2030 and attract £20bn of investment, 2017 saw a large drop in renewable energy investment in the wake of subsidy cuts.

Investment in new, independent renewable energy projects in the UK totalled £227m in 2017, down by almost 20% from 2016 figures, according to data from SmartestEnergy.

“As we enter an era where generators will increasingly be expected to ‘stand on their own two feet’ and operate without subsidies, they will need to become active participants in the new energy system to develop revenue streams,” SmartestEnergy’s vice-president of renewables Iain Robertson said.

Sarah George

Comments (1)

  1. Trevor Smith says:

    but as hinted at in this article and reported elsewhere by EDIE https://www.edie.net/news/11/MPs-decry–worrying-collapse–of-clean-investment hits a brick wall after 2015 hope the investors didn’t put all their EGSS in one basket …

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