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Business Forum

News - 5 September 2010
[photo source: kevindooley]

The problem with environmental industries

Everywhere in the world wants to be a centre for environmental industries and Brighton & Hove is no exception. Forecast to generate thousands of jobs and combining high-tech innovation with modern manufacturing, it is easy to see the attraction but we need to be careful when trying to pick winners.


Despite an extraordinary range of businesses claiming to be “environmental industries” there are only really four sectors that count:

  • Reclamation and recycling
  • Renewable energy
  • Low carbon transport
  • Low carbon buildings

Brighton & Hove has varying degrees of expertise that could give it an advantage in any of them but the Economic Partnership has always counselled caution when it comes to deciding which might realistically provide jobs in the future [see earlier story]. It is always instructive to look at the bigger picture and two developments provide useful evidence to add to the debate.

Electric cars have “come of age” in the last decade and Brighton has university departments with established expertise in this area, the world leading Ricardo Engineering facility on its doorstep and the company Elektromotive – making electric charging bays – based at Sussex Innovation Centre.

The latest vehicle to be offered in Britain is the new Nissan Leaf, which went of sale last Wednesday. The hatchback boasts a 100-mile range at a cost of just over 1p/mile and, because it generates zero-emissions, it attracts no road tax, no congestion charge in London and can park for free in many towns and cities.

But the cost, at just under £24,000, is about twice the price of a comparable family-sized hatchback. At the moment early adopters can get a government subsidy of £5,000 but the original budget for this - £230m over four years – has been cut to just £43m. This means it will run out after 8,600 cars.

Electric vehicles have an assured future, but the current purchase price, the limited driving range and the drastic cut to the subsidy all serve to limit the current market for the Leaf and other electric vehicles. And this serves to make it harder to gauge the speed at which low carbon transport will be adopted by the mass market. And it is adoption by the mass market that will generate large-scale job creation.

Another sector that has an assured future is renewable energy including, photovoltaics, heat capture and wind & wave energy. Once again Brighton & Hove has expertise in its universities that should confer an advantage at least in the R&D phase of renewable energy development. But the UK generally is well behind other countries that started the dash for renewables over a decade ago.

Unsurprisingly China, despite building coal fired power stations at an alarming rate, already has 20% more wind-power generating capacity that the whole of Europe. By 2020 it plans to have enough low carbon infrastructure to generate 520GW of electricity; enough to supply the UK seven times over.

This gives the country an inbuilt advantage when it comes to the manufacture of renewable energy machinery. For instance, it has 80 turbine manufacturers including the world’s three largest companies. Many argue that the UK’s role in wind energy will be the design and development of the technology, not its manufacture [the UK has only one manufacturer] but China is increasingly determined to do its own R&D and is developing the higher education expertise to accommodate this aspiration.

Britain’s only likely advantage in wind power is limited to offshore facilities. Onshore turbines are deeply unpopular in the UK and there is unwillingness on the part of local authorities to grant them planning consent.

Brighton & Hove undoubtedly has the potential to generate jobs from environmental industries but it isn’t clear yet which ones. The Economic Partnership and the Sussex Employment & Skills Board are working collaboratively to get an idea of what clusters have developed locally and what skills shortages limit their growth. Hopefully it will help to inform the debate.

Read related items on:
Green technology
UK Energy Strategy

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