Net zero can be a “local hero” and deliver large benefits to parts of the UK that are most in need of an economic boost, according to research.
For the latest report in their Clean Growth Gap series, Energy UK and Oxford Economics explored how different regions of the UK could benefit from the energy transition, doing so by building on strengths they already have in industry and manufacturing, and maximising geographic strengths. Pursuing a more ambitious transition to net zero will boost the British economy by 6.4%, or £240bn, in 2050 when compared to the trajectory the country currently finds itself on.
This could see regional disparities closed, after modelling showed how the six regions that would see the greatest boost to GDP by 2050 from a shift to net zero would be those that all had below the average GDP per head in 2022. Collectively, for regions outside of London and the South East, the boost would be £141bn, or 5.4% to 7.5% per region.
There is no one-size-fits-all solution to net zero. Each communities needs to play to their strengths. For example, manufacturing regions with existing automotive specialisms, such as the West Midlands and Sunderland, are well placed to develop electric vehicle (EV) and battery technologies. The East Coast of England and Scotland, meanwhile, can build on a significant number of recent large-scale offshore wind developments.
Elsewhere, areas with large concentrations of carbon intensive clusters close to depleted oil and gas fields can develop industrial carbon capture usage and storage (CCUS) sites. This includes the likes of County Durham and Sunderland. Then there is hydrogen, with the nearby Tees Valley producing half of all commercially available hydrogen in the UK.
The government has also provided funding to a host of net zero industrial clusters that are set to use both CCUS and hydrogen, situated in South Wales, Northwest England, Northeast Scotland and the East Coast, all of which score highly on deprivation metrics. Development of hydrogen technologies is also expected to help decarbonise energy intensive industries, which includes steel in Port Talbot and Scunthorpe, securing jobs in these sectors.
Low carbon power producers often provide high wage employment in rural areas, where employment opportunities and earnings tend to be less plentiful. A vast majority (85%) of operational low carbon energy generating capacity is in areas with fewer than 500 people per km2, for example. Furthermore, 21% of operational low carbon energy capacity is in areas that fall in the top 10% of local authority districts by economic inactivity rates, rising to 43% for the top 25% districts. It also highlighted how local authority districts in the bottom 10% of employment rates host 16% of low carbon energy capacity.
Other benefits include the way in which local supply chains are boosted during development and construction; how local communities gain during the operational phase, given how analysis of UK offshore windfarms found 75% of operational expenditure was in the UK; and of course community benefit financial packages as well.
