UK Study: Renewable Fuels Kill Jobs

Published March 14, 2011

The United Kingdom’s government-mandated use of more renewable energy has destroyed 3.7 jobs for every single job created, new research shows.

Fewer Jobs, Higher Costs
In “Worth the Candle?” Verso Economics, a UK-based economics consulting company, found renewable power not only kills jobs but also raises consumers’ energy costs. The one-two punch of price inflation and higher unemployment essentially recreates the 1970s-era stagflation that punished the U.S. economy.  

The UK’s renewable power mandates, known as the “Renewable Obligation,” cost electricity consumers £1.1 billion (about $1.8 billion) in the UK during 2009-2010, the study found. Factoring in all economic costs in addition to direct electricity prices, the study estimates the Renewable Obligation cost the UK £1.4 billion (about $2.3 billion) in 2009-10.

Exaggerated Renewable Claims
The study warns about accepting renewable power job-creation claims at face value.

“[E]mployment figures cited by those promoting renewable energy are often greatly exaggerated, exceeding official employment figures covering the whole of the energy sector,” the study reports.

“The report’s key finding is that for every job created in the UK in renewable energy, 3.7 jobs are lost,” the study explains.

Europe Bailing Out
Beyond the UK, other cash-strapped European governments are drawing their own conclusions from their flirtation with renewable energy. The Netherlands, for example, recently became the first country in Europe to abandon the EU’s renewable energy targets.

Similarly, Germany is cutting back on its generous subsidies for solar power. Its “feed-in tariffs” supported the high price of solar power by paying a premium to qualified individuals and businesses to install solar panels on their roofs or in solar parks that in turn could be fed into the nation’s power grid. But because power companies passed along the high price of solar electricity to consumers, the scheme has come under growing criticism.

“The countries that had been leading the charge toward renewables, such as Spain and Germany, are cutting back and bailing out,” said David Kreutzer, a research fellow in energy economics and climate change at the Heritage Foundation. “Subsidizing overpriced energy hurts the economy, and the more you subsidize, the easier it is to see the economic damage.”

Bonner R. Cohen, Ph. D. ([email protected]) is a senior fellow at the National Center for Public Policy Research.

Additional Info:

Worth the Candle? Verso Economics,