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Continued growth in renewables

The North-east’s renewable energy sector has the potential for major growth as investment rises and projects come on-stream according to a survey just published by the Chamber.

The survey was carried out among businesses involved in the renewables sector across Aberdeen City and Shire who were asked about current business performance, activity levels, employment trends, and future plans. The overall results show the North-east’s renewable energy industry foresees a bright future both for itself and the region in delivering the renewable energy aspirations of Scotland.

However, there are many issues to be resolved before this potential can be fully realised. Two barriers to growth highlighted by respondents were the local transport infrastructure and air travel links to the city.

Key findings from the report include:

• The sector is still in its growth phase, as fewer than 20% of businesses have reached the production phase, while the majority of businesses have projects within the conceptual and testing stages.

• Over 50% of renewable energy businesses have witnessed an increase in investment over the last year.

• Businesses plan to continue to invest heavily in research and development. Up to 80% of businesses expect that research and development activity would increase in the following year.

• Renewable energy businesses anticipate an increase in employment within the sector. Up to 90% expect that they would increase their staff numbers in the next year.

• The local business environment was highly rated as conducive to renewable energy growth, based on energy expertise.

• There is some doubt that all of the Scottish Government’s targets for renewable energy would be met

• Cost increases over the last year have been offset by growth of sales and profits

• Businesses are least confident about ‘planning with certainty’ over the long-term

• The highest priorities for the next year are investing, expanding into new markets and consolidating current activity

• The most important issue relating to future business prosperity was grid development

The renewable energy sector is seen by some as one of the most important industries, with the potential for growth, in the region. The aim of the survey was to discover how businesses view renewable energy in the region, as well as the potential role that this region can play in delivering the targets and objectives of both the UK and Scottish Governments toward renewable energy.

Bob Collier, Chief Executive of AGCC said: “We are pleased to publish the second of a series of surveys to provide sector specific research on businesses in North-east Scotland. Renewable energy has great potential for growth in this region building upon the skills and expertise that have been developed as a result of the oil and gas sector. Aberdeen City and Shire is well placed to deliver this opportunity in the form of jobs, sustainable growth, and business profitability. This will not only benefit the region, but will also impact on the prospects of renewable energy for Scotland and beyond. We hope the information gathered in this survey will help inform business, government and other decision makers about future direction.”

The full Energy Network Renewables Sector Survey Report 2011 is available online at www.agcc.co.uk/energy. Paper copies are also available on request by contacting Seona Shand at seona.shand@agcc.co.uk.