Plenty of Investment in UK Energy Sector
IN the Olympic year, private sector investment in the UK energy sector rose to £11.6bn, equivalent to building 20 Olympic Stadiums, according to a report from EY for EnergyUK.
The report - Powering the UK 2013 - which looks at the sector’s total economic, investment and employment contributions to the UK, concludes that investment in the UK’s energy sector in 2012 was higher than the private sector’s investment in transport, and the public sector’s investment in health and education.
Tony Ward, Head of Power & Utilities at EY, said: “What our research shows is that the UK energy sector has, in recent years, consistently delivered higher levels of both investment and employment across the country. In 2012 investment levels haven’t lost momentum, despite the slow progress towards a reformed energy policy. Private sector investment in the energy sector increased by £1.6bn compared to 2011 and the sector now supports 1 in 45 jobs in the UK.
“While near term affordability of energy is the dominant issue at the moment, it is being debated at a time when the fruits of recent massive capital investment, and an effective focus on energy efficiency are beginning to be seen in consumption patterns. Long term consumer choice over energy consumption is driven by an expectation of absolute future security, as much as affordability of unit price.
“More needs to be done to secure the UK’s future energy supplies and to achieve a successful transition to a low carbon economy. To continue delivering the quiet energy revolution that has already been taking place, certainty, stability and trust at a customer level are all necessary.
In 2012 the energy sector provided £24bn in direct contribution to the UK economy, up from £21bn in 2011, and an additional £78bn indirectly through its supply chain activities - a total of £102bn in Gross value Added (GVA).
The energy sector contributes around 3% of UK GDP and is also one of the most productive sectors in the economy as indicated by GVA per direct employee. A key reason for the productivity observed is the high level of capital investment in the energy sector compared to other sectors of the UK economy.
Despite recent challenging economic conditions, the energy sector continues to be a major industrial contributor to public finances. In 2012 the energy sector directly contributed central Government tax revenues equal to £3bn, broken down in £1.2bn in corporation tax, which constitutes around 3% of total HMRC corporation tax receipts for 2012; £760m and £460m in income tax and employee National Insurance respectively; and £530m via employer National Insurance Contributions.
Ward concludes: “The last two years have seen growing public awareness around major issues such as energy affordability, policy costs and the role of low carbon energy, however, the debate has become skewed and politicised. At the same time as needing to deliver the policy and regulatory clarity necessary to unlock long term discretionary investment, we must also have an open, balanced and honest debate on all these issues on behalf of the future generation of energy users.”
Tuesday 5th November 2013