Renewable energy job numbers in Scotland well below forecast

Amid claims that clean power will help Scotland achieve a just transition from dependence on fossil fuels, the trade body highlighted an academic study which concluded that the number of renewable energy jobs rose by 50% in one year.

The Fraser of Allander Institute at the University of Strathclyde found the industry supported more than 42,000 jobs in Scotland in 2021 compared with 27,000 in the preceding year. The totals include ‘direct’ employees, who work on renewables assets, and those in jobs across the wider supply chain.

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The fact the latest report highlighted a trend apparent three years ago may have led some people to treat the numbers with caution, especially given the caveats attached to the research.

Noting the findings were based on analysis of Office for National Statistics data, Fraser of Allander highlighted significant uncertainty in the underlying ONS survey of renewable activities. The institute said its results were “accompanied by a moderately large margin of error”, adding: “We caution against overinterpretation of the results in this report.”

Sector champions appeared to throw caution to the wind, however.

Hailing the report, Scottish Renewables chief executive Claire Mack said: “The renewable energy industry is the biggest economic opportunity we have in Scotland so it is really encouraging to see the Fraser of Allander Institute’s report reflect the positive impact our sector is having on jobs and economic output.”

First minister Humza Yousaf appeared delighted by the findings as he tried to refresh the case for independence last week, by rehearsing claims that renewables could power Scotland to prosperity.

Claiming that he wanted to promote a deliberative evidence-based process, Mr Yousaf said he felt optimism about Scotland’s potential citing “extraordinary resources” such as renewable energy.

“Rapid progress is already underway,” crowed Mr Yousaf. “The total output supported by the renewable energy sector in Scotland nearly doubled to £10.1 bn, and total full-time employment increased from 27,00 to 42,000 over the last year.”

Mr Yousaf probably feels the 2021 numbers should silence carpers who ask if the renewables sector can create enough jobs to make up for the expected decline of the oil and gas industry as North Sea fields run dry.

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Look closer at the numbers, however, and confidence seems to be hard to justify, even if concerns about the potential margin of error involved are set aside.

Fraser of Allander said growth in jobs in 2021 was driven by the offshore wind sector, which supports 15,005 full time equivalent (FTE) roles. Onshore wind supports 12,030 roles and renewable heat 7,220 roles.

That finding only underlines the fact that the key offshore wind sector has created far fewer jobs than expected by industry champions.

In 2010 a report commissioned by Scottish Enterprise and Scottish Renewables found Scotland’s offshore wind industry could create 28,000 jobs directly by 2020, contributing £7.1billion of investment to the economy.

The underperformance of the renewables industry on the jobs front has persisted despite hefty investment in facilities offshore by international giants.

This may reflect the fact that even giant windfarm projects require much smaller numbers of people to develop and operate them than significant oil and gas facilities.

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Robert Gordon University estimated the oil and gas industry supported 120,000 UK jobs in 2023.

The challenge has been compounded by the fact that Scotland has missed out in the competition to secure a share of the offshore wind supply chain investment concerned.

Developers such as SSE have faced flak after awarding turbine manufacturing contracts to firms based outside Scotland.

The competition for contracts from areas such as Teesside is set to remain fierce.

The steel foundations for SSE’s massive Dogger Bank windfarm off Yorkshire will be built at a Teesside plant operated by South Korea’s SeAH Wind, which is expected to employ 750 people.

Ministers hope Scotland could have an edge in the floating windfarm sector after the 2022 ScotWind leasing round won a strong response. That will depend on ensuring suitable support facilities are available.

In October Mr Yousaf launched a £500m offshore wind supply chain fund in a move that suggested he recognised the government needed to do much more to support the sector after more than a decade in power.

His predecessors also liked to bandy around big numbers.

In 2010 former first minister Alex Salmond forecast that more than 5,000 green jobs could be created through the development of three offshore energy manufacturing clusters around ports such as Leith and Hunterston – involving £223m investment.

The Scottish Government subsequently faced criticism for not doing enough to support the development of turbine players. After the Burntisland fabrications business went into administration in 2020, the government said its hands were tied by EU state aid rules.

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Brexit may have changed the equation. However, the EU has made clear it will go to the World Trade Organisation to fight any move that could limit the ability of firms from member states to compete for business in the UK.

Hopes that other clean energy sectors will become major drivers of supply chain activity look hard to justify on current trends.

The marine energy sector lionised by Alex Salmond has yet to fulfil the potential he saw in it.

Smart battery maker AMTE Power held out the prospect of creating a Dundee megafactory but said last month that it intended to appoint administrators after facing funding challenges. In an update issued last week the Thurso-based company said parties had expressed interest in the business and its assets without elaborating.

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Against that backdrop the Scottish Government may find it increasingly hard to defend the energy strategy it unveiled in January last year following long delays.

In this the government said the transition from fossil fuel dependence to renewable energy should be accelerated. It recommended a presumption against North Sea oil and gas exploration on environmental grounds and because it was unlikely that more big finds would be made.

Major players such as Equinor showed they felt differently by bidding for acreage in the latest North Sea licensing round.

Equinor’s decision to sanction the multi-billion pound Rosebank development with Ithaca Energy reflected confidence in the North Sea’s long-term potential. Equinor has said Rosebank is expected to support 1,600 jobs during the height of the construction phase of the project, and around 450 UK-based jobs during the lifetime of the field.

Meanwhile the Scottish Government could face renewed pressure to abandon its opposition to nuclear power, which still accounts for a significant share of the energy used in Scotland despite the closure of the Hunterston plant in Ayrshire 2021.

EDF, which operates the giant Torness nuclear power station on the East Lothian coast, last week said the expected life of the plant could be extended by two years, to 2030.

On its website the French giant says Torness generates enough zero carbon electricity to power two million UK homes. Some 35 years after the plant opened, Torness directly employs around 730 workers full time including contractors. The figures do not have a margin of error attached.