TODAY’S STUDY: THE BENEFITS OF EUROPEAN WIND

Green Growth; The impact of wind energy on jobs and the economy

April 2012 (European Wind Energy Association)

Executive Summary

The wind energy industry: a driver for economic growth

The wind energy industry is a proven recession busting industry and investment in the wind power sector should be seen as a way to restore Europe’s economy to health. Putting in place stable legislative frameworks which encourage the building, installing and operating of wind turbines has resulted in economic growth since the financial and economic crisis, and will continue to lead to economic growth. Governments and the European Commission should therefore see wind energy as not only a solution to climate change and a way to improve energy security, but also a way to boost economic growth and competitiveness.

As such, investment in the wind industry should be seen as a strategy to deliver economic growth, and stable legislative frameworks to promote the development of the wind industry should be maintained and enhanced, even in times of austerity.

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In 2010 the wind energy sector – both directly and indirectly – contributed €32.43 billion (bn) to the EU’s GDP, 0.26% of the EU’s total GDP for that year. The contribution of the wind energy sector is higher than the contribution of the footwear industry (0.21%). Wind energy’s contribution can also be compared to the furniture sector, which contributed 0.99% of EU GDP in 2010, to the civil aviation sector, which contributed 1.5% of EU GDP in 2010, to the automotive industry at 6.5% and to construction at 9.9%. In 2010 the increase in the wind industry’s contribution to GDP, at 4.1%, was twice as high as the growth of GDP itself. Between 2007 and 2010 the wind energy sector increased its contribution to GDP by 33%. The wind industry is growing faster than the EU’s economy as a whole and this will remain the case over the next two decades.

As such the wind industry will continue to be a driver for economic growth over the next twenty years. In 10 years’ time the wind industry’s contribution to GDP will increase almost three-fold, with the sector expected to generate 0.59% of the EU’s GDP whilst having doubled employment. In twenty years’ time the wind industry’s contribution to GDP will increase fivefold to reach €174 bn, almost 1% of total EU GDP, and employment will have increased by a factor of three.

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The wind energy industry: a major industrial exporter

€8.8 bn worth of products and services were exported by the European wind industry in 2010, up 4.2% on the previous year and up 33% since 2007. In contrast, the sector imported €3.2 bn worth of products and services in 2010, making it a net exporter of €5.7 bn worth of products and services.

The wind energy industry: contributing taxes

Tax payments from companies in the wind energy sector amounted to €3.59 bn in 2010, mostly corporate and income taxes but also regional and local taxes, and property taxes. Taxes paid by the wind industry have increased by over 50% since 2007.

The wind energy industry: avoiding fuel costs

Wind energy displaces electricity generated by fossil fuels, which not only reduces electricity prices and CO2 emissions, but also avoids the cost of buying those fuels. In 2010 avoided fuel costs (for coal, oil, gas, biomass, waste) from wind power production was €5.71 bn. For the 2007 to 2010 period, wind energy avoided fuel costs totalling €20.18 bn.

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The wind energy sector: a motor for other European economic sectors

The wind industry buys and sells products and services from and to other economic sectors. This interdependence between sectors means that the wind industry is a driving force for many other industries – including metals, electric and electronic equipment, IT, construction, transport, and financial services. As a result the growing wind industry has helped other industrial and economic sectors weather the economic crisis.

The wind energy sector: creating jobs in Europe

Employment in the wind energy sector stood at 238,1542. Between 2007 and 2010, the number of jobs in the sector grew by nearly 30%, whilst EU unemployment rose by 9.6%.

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The wind energy sector: maintaining global technology leadership through R&D

The wind industry spent more than 5% of its total turnover on research and development (R&D) in 2010. Since 2007, R&D spending has consistently represented over 5% of the sector’s turnover, almost three times higher than the economy-wide average, and well above the EU’s objective of 3% of GDP being invested in R&D. Wind turbine manufacturers commit the most to R&D – around 10% of their total turnover – highlighting how well placed European wind power companies are to take on the challenge emerging from China, the US, India, South Korea and Japan.

The wind energy sector: a global leader

Over 48% of European wind energy companies also work outside the EU, employing some 20,000 EU professionals in non-EU countries. Of the 10 biggest wind turbine manufacturers in the world, four are EU-based. Of the ten biggest wind energy developers in the world, five are EU-based.

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Policy recommendations

Key elements of maintaining the growth of the European wind power sector and European leadership of the sector are technology development and policies to support the expansion of a European wind industry, that is, policies to promote the continued development of European markets, both onshore and offshore, as well as increased R&D.

Binding 2030 renewable energy target

European leadership of the wind industry is a result of successful European policy frameworks for renewables, centred on renewable energy targets. These were initiated with the 1997 European Commission White Paper on Renewable Sources of Energy and followed up with legislation and targets for 2010 and 2020. EWEA believes that the most effective way to maintain and expand Europe’s leadership in wind energy would be a continuation of those policies in the form of a binding 2030 renewable energy target, together with effective national implementation of the existing Renewable Energy Directive.

EU financial commitment to R&D

The EU has already made a political commitment to develop renewable energy and to increase public spending for technological R&D. Now it is crucial for the EU to take action and commit to fi nancing the €6 bn 10 year wind energy R&D programme of the European Wind Initiative (under the EU’s SET-Plan). Industry has already committed to contributing 50% of the financing, with research focused on new turbines and components, offshore technology, grid integration, and resource assessment.

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Removal of trade and investment barriers

The European Union should take the lead in pursuing an international trade agreement on environmental goods and services (EGSA), focused on renewable energy technologies in order to ensure the removal of all trade barriers, both tariff and non-tariff barriers, including local content requirements. The EU should also give high priority to improving market access for the wind industry in relation to FTA negotiations with the EU’s main trading partners.

Development of electricity infrastructure, system operation and markets

The European Commission should continue its development of an interconnected European power system.

European wind turbine manufacturers have mastered the technical challenges associated with increasing penetration levels of wind energy by equipping turbines with highly sophisticated grid integration features. Europe is a global leader in R&D on grid infrastructure technologies, including the concept of the offshore super node linking together offshore wind farms, and High Voltage Direct Current (HVDC) power transmission projects, such as those being developed and operated by European companies in China and India (although interestingly not yet in Europe).

Ambitious climate targets

An EU target of 30% domestic greenhouse gas (GHG) reductions by 2020 is crucial to direct investments towards a sector which delivers emissions reductions in Europe. By 2020 wind energy can deliver domestically 31% of the EU’s 20% emissions reduction target, or 20% of a potential 30% emissions reduction target.

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Key Findings

Key findings for 2010:

• The wind industry contributed €32.43 bn to EU GDP, an increase of 33% since 2007, with the sector generating 0.26% of the EU’s GDP.

• The wind industry paid €3.59 bn in taxes, an increase of over 50% since 2007.

• The wind industry avoided €5.71 bn in fuel costs from coal, oil, gas, biomass and waste.

• The wind energy sector exported €8.8bn worth of products and services, an increase of 33% since 2007.

• The wind industry directly and indirectly employed 238,154 people in the EU, an increase of 30% since 2007.

• The wind industry spent over 5% of its turnover in R&D, three times more than the economy-wide average.

• Over 48% of EU wind energy companies had activities outside of the EU.

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Key findings for 2020:

• The wind industry will contribute €94.5 bn to EU GDP, an almost three-fold increase over the next ten years, with the sector generating 0.59% of the EU’s GDP: the wind industry will continue to be a driver for economic growth over the next ten years

• The number of jobs will increase to 520,000 by 2020, a rise of more than 200% over the next 10 years.

Key findings for 2030:

• The wind industry will contribute €173 bn to EU GDP, generating almost 1% of the EU’s GDP, a five-fold increase over the next 20 years.

• The number of jobs will increase to 794,079, an increase of 233% over 20 years.