New research has been commissioned by Energy and Climate Intelligence Unit

Net zero-related industries contribute £4bn of GVA (gross value added) to the Welsh economy and support over 41,300 jobs, shows new research.

The report, commissioned by the Energy and Climate Intelligence Unit (ECIU) with analysis provided by the independent consultancy CBI Economics and the Data City, found that more than 1,300 businesses- mostly (87%) small or medium-sized – are now part of the Welsh net zero economy. Around a sixth (15%) of those have started up in just the past five years.

Workers in the net zero economy are highly productive generating £117,500 of value on average, around 1.7 times the Welsh average. This helps support higher wages with workers earning £39,812 on average, approximately 11% above the Welsh industry average (£35,796).

The GVA contribution of net zero represents 4.3% of Wales’s total economic output and 3.1% of employment.

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The analysis also found that Wales has a potential £13.1bn renewable energy generation infrastructure pipeline, representing 10.9 gigawatt of capacity, but not all of it as yet is guaranteed to be built.

Wrexham records the highest share of local economic activity (GVA) supported by net zero at 7%, supporting more than 2,340 jobs. The area has a concentration of net zero businesses that is around eleven times higher than the UK average. This is followed by other net zero economic ‘hotspots’: Pembrokeshire (5.3% area GVA, 1,600 jobs), Rhondda Cynon Taf (5.2% area GVA, 2,890 jobs) and Newport (5.1% area GVA, 2,620 jobs).

The jobs are distributed across energy generation, manufacturing, construction, engineering and professional services, from solar panel installers to electric vehicle charging companies. Around 160 firms are involved in electric heat pumps and other renewable heating sources.

Russell Greenslade, CBI Wales director, said: “With our unique natural assets, strength in advanced manufacturing and well-established supply chains, we’ve long known that the net zero economy presents a major commercial opportunity for Wales.

“This new report underlines just how central the net zero economy is to our future prosperity. From onshore and offshore wind to carbon capture and emerging clean technologies, Wales can be at the forefront of the UK’s energy transition, with high-value, highly productive jobs created in every part of the country.

“The UK and Welsh governments must now work in partnership with business to seize that opportunity. That means creating a stable, competitive business environment and investing in the skills that will enable Welsh workers to thrive in the energy transition.”

Peter Chalkley, director of the Energy and Climate Intelligence Unit, said: “Reaching net zero emissions is scientifically the only way to bring balance back to the climate and stop climate change, but it’s also now a major component of the Welsh economy. With countries and states covering 84% of the global economy committed to net zero, Wales is very much part of a global race to build competitive, clean industries.

“This means there is real jeopardy for jobs and livelihoods if politics and policy shift and Wales starts to fall behind – standing still is unfortunately a recipe for decline. The hard work of the staff of hundreds of small businesses are driving the Welsh net zero economy forwards, installing heat pumps and solar panels, developing smart software for charging EVs and producing green hydrogen.”

“These workers are helping to make Wales more energy independent given net zero emissions essentially means burning less oil and gas. But Wales has slipped behind England and Scotland in its construction of renewable energy set against the backdrop of the US Iran conflict and the second oil and gas price crisis in just a matter of years.”

A Labour source said “When it comes to our energy infrastructure, Plaid claim to be pro green energy but have shown themselves to be a party of blockers. Now they are in government, obfuscating won’t do. Their position on undergrounding (transmission lines) doesn’t match the reality needed to help realise Wales’ potential as a leader in clean energy.

“The UK Government has already invested heavily in boosting these sectors in Wales, supporting jobs and helping to lower bills in the process. Plaid shouldn’t put that progress in danger.”