Jeremy Hunt’s Green Industry Deception


By Paul Homewood

Jeremy Hunt has revealed that the UK is sitting on an energy goldmine, as wind power has generated record amounts of energy in the past year. In a keynote speech at Bloomberg’s European headquarters in London, the Chancellor delivered an upbeat message as he unveiled his plan to turbocharge Britain’s economy.

At this speech, Mr. Hunt hailed the UK’s renewable energy industry as a “big growth area”, which he estimates could be worth a trillion pounds by the end of the decade. He also pointed to recent announcements made by the National Grid’s Electricity Systems Operator, which showed that the UK has produced staggering amounts of electricity in the past year.

In the speech, Mr. Hunt said: “Another big growth area is out green and clean energy sector. The UK is a world leader here, with the largest offshore wind farm in the world.

“Last year we were able to generate an incredible 40 percent of our electricity from renewables. On one day, on a rather windy December 30th, we actually got 60 percent of our electricity from renewables, mainly wind.

“McKinsey estimates that the global market opportunity for the UK green industries could be worth more than a trillion pounds between now and 2030.”

Hunt is being rather disingenuous here. The McKinsey report he refers to states:

Overall, we estimate that the capital expenditure into low-carbon assets in the world’s broader energy, transport, food, and land-use systems could be around £40-50 trillion in the period 2021–2030. 16 The global market opportunity for UK companies producing the goods and services to feed this green capex revolution could be worth more than £1 trillion by 2030

Whether the export opportunities identifies materialise or not, they have very little to do with Britain’s offshore wind industry. It is extremely unlikely we will export turbine blades, for instance, or actually instal anything, or even provide consultancy.

The opportunities are most likely to revolve around our traditional strengths, such as finance and professional services. We will be in a good place to do this whether we go for Net Zero or not.

But what Mr. Hunt forgot to mention was the crippling cost of Net Zero. A year ago the same McKinsey published another report on Net Zero:

The net-zero transition will cost $275 trillion globally by 2050 as low-emission activities are ramped up and high-emissions activities decrease, according to a new report from consultancy McKinsey & Company.

The increase in capital spending on physical assets for energy and land-use equates to an average $9.2tn per year or an increase of $3.5tn on today’s annual spending, McKinsey found in its latest study: The net-zero transition: What it would cost, what it could bring.

The transition will also lead to extensive labour reallocations, with about 200 million direct and indirect jobs added to the labour market by 2050, making up for the 185 million positions lost over the same period, the report found, which assessed sectors that produce 85 per cent of overall emissions, with a detailed assessment of 69 countries.

“The net-zero transition will amount to a massive economic transformation,” said Mekala Krishnan, a partner at the McKinsey Global Institute and lead author of the report.

Business will doubtlessly benefit from all of this capital spending, but it will be the public who end up paying the bill. Meanwhile it will be  painful transition for those 185 million who will lose their jobs. The idea that they will simply walk into one of the 200 million new jobs is ridiculous – life does not work like that.