Every job in Britain’s wind farm industry is effectively subsidised to the extent of £100,000 per year, The Telegraph can disclose.
A new analysis of government and industry figures shows that wind turbine owners received £1.2billion in the form of a consumer subsidy, paid by a supplement on electricity bills last year. They employed 12,000 people, to produce an effective £100,000 subsidy on each job.
The disclosure is potentially embarrassing for the wind industry, which claims it is an economically dynamic sector that creates jobs. It was described by critics as proof the sector was not economically viable, with one calling it evidence of “soft jobs” that depended on the taxpayer.
The subsidy was disclosed in a new analysis of official figures, which showed that:
• The level of support from subsidies in some cases is so high that jobs are effectively supported to the extent of £1.3million each;
• In Scotland, which has 203 onshore wind farms – more than anywhere else in the UK – just 2,235 people are directly employed to work on them despite an annual subsidy of £344million. That works out at £154,000 per job;
• Even if the maximum number of jobs that have been forecast are created, by 2020 the effective subsidy on them would be £80,000 a year.
One source, who owns several wind farms, and did not wish to be named, said: “Anybody trying to justify subsidies on the basis of jobs created is talking nonsense. Wind farms are not labour intensive.”
There has been mounting controversy about the value of both onshore and offshore wind farms, with discontent among back-bench Conservative MPs.
The industry’s trade body, Renewable UK, has campaigned to promote the method of electricity generation as a way to create jobs. It states on its website that: “We aim to create thousands of jobs across a wide range of business sectors.”
It says the industry currently employs 12,000 people and “is set to employ up to 90,000 people by 2020”.
The promise of future jobs is dependent on the building of large-scale wind farms at sea and the construction of factories in Britain to manufacture the turbines, which are currently almost all built abroad.
Industry figures show that for the 12 months to the end of February, the latest period for which figures are available, slightly more than £1.2billion was paid through the consumer subsidy – known as the Renewables Obligation.
It was introduced by Labour to encourage investment and is added to all energy bills, meaning that besides households, industry and employers also pay, adding to the cost of all goods and services.
According to the Renewable Energy Foundation, a think tank that has criticised the cost of wind farms, it currently adds about £47 to the average household’s cost of living.
They say the total subsidy is likely to rise to £6billion by 2020 if the Government meets its target of providing 15 per cent of energy needs from renewable energy.
The industry’s projection is that by 2020 it will create up to 75,000 jobs – an effective subsidy of £80,000 a year – but failing to reach that figure will raise the effective subsidy.
The foundation claims that the subsidy will actually cost jobs because businesses will relocate abroad – or close – to save on energy bills.
Households will also have less disposable income because more money will go to pay fuel bills.
Among the examples of extremely high subsidies effectively for job creation is Greater Gabbard, a scheme of 140 turbines 12 miles off the Suffolk coast.
It received £129million in consumer subsidy in the 12 months to the end of February, double the £65million it received for the electricity it produced. It employs 100 people at its headquarters in Lowestoft, receiving, in effect, £1.3million for every member of staff.
Iwan Tukalo, general manager of Greater Gabbard Offshore Wind Limited, which is co-owned by SSE and RWE, said building the farm was a £1.5billion investment in British infrastructure.
He added that “as well as supporting significant local employment during the four-year construction period”, 95 per cent of its permanent employees were local people.
The London Array, Britain’s biggest wind farm, with 175 turbines, employs 90 people at its base in Ramsgate, Kent. The array, which is 12 miles offshore, became fully operational in the spring. The foundation predicts its Renewables Obligation subsidy in its first year of full operation will be £160million – effectively £1.77million per job.
In Scotland, Fergus Ewing, the devolved government’s energy minister, published figures earlier this year showing that 2,235 jobs were “connected directly to onshore wind”. There are 203 wind farms across Scotland, and the scale of Renewables Obligation support means each post is underwritten by £154,000.
Wind farms are controversial not only because of the cost, but also because of claims that the turbines, which can be more than 400ft high, are ruining the countryside. Campaigners have said the planning system remains loaded in favour of developers and that too little of the countryside is protected from their spread.
Earlier this month David Cameron signalled that local people would have more say over wind farms in their areas. Developers would have to offer much greater compensation for building them, and planners will be compelled to take into account their visual impact and the views of locals.
But energy firms will be able to offer incentives, including lower power bills for local people, in return for planning permission, which critics say amount to “bribes”.
Campaigners also warn that turbines do not generate power when the wind is too low or too high, and cannot store it, meaning conventional generation is needed as a backup.
Dr John Constable, director of Renewable Energy Foundation, said: “Subsidies can create some soft jobs in the wind power industry but will destroy real jobs and reduce wages in other sectors, in the UK’s case because the subsidies cause higher electricity prices for industrial and commercial consumers. The extravagant subsidy cost per wind power job is an indication of the scale of that problem.”
He added: “Truly productive energy industries – gas, coal, oil, for example – create jobs indirectly by providing cheap energy that allows other businesses to prosper, but the subsidy-dependent renewables sector is a long way from this goal; it’s still much too expensive.”
There is even doubt within the wind industry that job creation projections can be met. Last week, Renewable UK issued a 64-page report urging the Government to “agree a long-term vision” for offshore wind or see jobs created on the Continent.
An Energy Bill, currently before Parliament, is the subject of wrangling over prices for renewable energy for the next 20 years. The wind industry says that without price and subsidy guarantees, a “green collar” jobs boom will not materialise.
Manufacturers are warning that some planned wind turbine factories are under threat without the price guarantees.
Gamesa, a Spanish company which had promised to open a factory in Leith in Scotland, said a lack of certainty was hampering its plans, while Siemens said it needed pricing guarantees before building a turbine factory in Hull.
Robert Norris, Renewable UK’s spokesman, said: “Parents are wondering where their children will find work in the future; the answer is in the renewable energy sector.
“Our studies show that by 2021, more than 76,000 people will be working in the British wind industry in full-time, well-paid green-collar jobs.
“In the last financial year we attracted private investment of £2.5billion, proving that the wind industry is an engine for growth at a time when other sectors are struggling.”
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