Clean Energy Made in the UK

As the energy transition accelerates, there has been a noticeable rise in political rhetoric against net zero and against the Government’s plans to make the UK a clean energy superpower. While many people have justified concerns about how their lives and livelihoods will be affected, right-wing critics are warming up to jump on these concerns to fuel a cynical campaign against the transition; one that is focused on scaremongering rather than engaging in good-faith discussions about how we can ensure workers, and the UK as a whole, benefit from the shift to renewable energy. 

For example, announced policies such as a Jobs Bonus – if implemented correctly – could help deliver good quality, permanent jobs for workers in industrial heartlands - like Scottish oil and gas communities and the North East of England. The transition is already well underway with jobs supported by the oil and gas industry more than halving over the past decade as North Sea reserves have declined. It is imperative that we now focus on delivering a just transition for workers and seizing the opportunities that a transition to clean energy creates. 

How could a Jobs Bonus help deliver a just transition? 

When the Labour party published their manifesto for a new government, it featured a commitment to 

‍"reward clean energy developers with a British Jobs Bonus, allocating up to £500 million per year from 2026, to incentivise firms who offer good jobs, terms and conditions and build their manufacturing supply chains in our industrial heartlands, coastal areas, and energy communities."

We decided to look into how a jobs bonus of this kind could be set up to create a fair transition for oil and gas workers and, alongside Transition Economics, we assembled a package of measures that would play a critical role in creating such a transition.

A Jobs Bonus policy package can be designed to ensure the government’s clean energy mission creates quality jobs in key regions and delivers pathways for oil and gas workers to step into these jobs. 

Key to creating these tangible jobs is the UK’s buildout of offshore wind. The next 15 years will see a major expansion of our wind industry as we zoom towards clean power targets, and this presents a huge opportunity to establish a domestic wind manufacturing sector, to build the turbines that will then power the country.

Though workers have long been promised ‘green jobs’ or ‘jobs in wind’, successive governments have failed to grasp this enormous opportunity, particularly in Scotland. 

The UK’s 50 wind farms currently account for more than a fifth of global offshore wind capacity –  but a typical North Sea turbine contains three times as much material from abroad than from the UK. This matters as manufacturing components is where most jobs in offshore wind are concentrated. 

A properly resourced Jobs Bonus could ensure that around half of the manufacturing content in the offshore wind pipeline is produced in the UK, supplied by 30 new or upgraded manufacturing facilities. This includes factories to produce turbine blades and foundations, fabrication yards for floating platforms, and facilities to manufacture cables and power transformers to connect wind farms to the grid.

Like in Hull, where a factory has confirmed a deal to manufacture the blades for turbines, which will be installed at the East Anglia TWO windfarm off the Suffolk coast.

By investing in the offshore wind supply chain, the UK Government could create 10,000 permanent renewable energy jobs and up to 13,300 indirect jobs in areas that are experiencing decline, supporting oil and gas workers to transition into new industries. 

Key to the policy package is ‘what, where and for whom’ it will deliver. Central to its design must be measures that ensure job quality; deliver job creation in key locations; and provide transition pathways for oil and gas workers.

This includes 

• Strengthening regulatory minimum standards. For example, the national minimum wage currently applies to seafarers working on the UK continental shelf, except those working in the offshore wind sector - a situation that urgently needs to be rectified.
• Enhancing the conditions required for developers to access support. For example, making entry to Contracts for Difference auctions conditional on companies paying quality wages and adopting a Fair Work Charter would drive up job quality across the UK renewables industry.
• Establishing strategic bonus incentive payments. For example, paying a bonus to developers who locate manufacturing facilities in places with oil and gas communities and industrial heartlands, and those who upgrade a facility currently within the oil and gas supply chain. 

To be successful in making the UK a thriving manufacturing hub for offshore wind requires the government to invest in the UK’s ports and dockside spaces; integrate measures with the UK Government’s other efforts to build a thriving renewable energy sector, including the National Wealth Fund and GB Energy; and guarantee proper resourcing.

The Clean Industry Bonus allocation of around £200m a year is far below the promised £500m a year for three years for the British Jobs Bonus.  That too is insufficient to fully seize the current opportunity. To drive this level of investment into UK manufacturing supply chains, as well as ensuring that these jobs are quality jobs and delivering transition pathways for oil and gas workers, a Jobs Bonus will need an additional boost of between £300 million and £1 billion.

The British Jobs Bonus has the potential to kickstart long term growth in manufacturing and create permanent jobs in the UK. But for a Jobs Bonus to reset the UK’s industrial base, it needs to support oil and gas workers to transition into good quality jobs and benefit the parts of the UK that need it the most – Scotland’s oil and gas communities, the North East of England and other coastal regions.

‍

To read full report click here