EMEC’s marine energy activities brought in over €420M to UK economy, report finds

Business & Finance

May 9, 2023, by Amir Garanovic

Economic impact assessment spanning two decades of operations at the European Marine Energy Centre (EMEC) has valued the impact of the test center to UK economy to be over €420 million (£370 million).

AWS’ Waveswing device and EMEC’s test support buoy offshore Orkney (Courtesy of EMEC/Photo by Colin Keldie)

An independent economic audit by BiGGAR Economics examined the value and benefit of EMEC’s activities from 2003-2023, exploring local and national impact.

The development of EMEC – the world’s first and leading test center for marine energy – has had a significant impact in Orkney as well as across the UK economy in terms of employment, supply chain development and encouraging public and private investment to service the sector, according to BiGGAR Economics.

The economic impact assessment found that the creation of EMEC, and subsequent activities that have burgeoned since, has amounted to £370 million (€420 million) gross value add (GVA) to the UK economy.

Out of the amount, £263 million (€301.5 million) of that was accrued in Scotland, and half of that, £130 million (€149 million), in the Orkney Islands where EMEC is head quartered.

EMEC was set up as a not-for-profit test facility in 2003 following a recommendation by the House of Commons Science and Technology Committee to kick start a wave and tidal energy sector in the UK.

To date, £42 million (€48 million) public funding has been invested in the center by public sector organizations including Orkney Islands Council, Highlands and Islands Enterprise, and the Scottish and UK Governments.

Thus, over £8 (€9.1) has been accrued for every £1 (€1.15) spent by the public purse, while the center has been self-sufficient since 2011.

BiGGAR’s analysis considers the economic impact from EMEC’s operations across the full value chain, from construction of the site through to operation and demonstration activities. The analysis includes its direct impact through supply chain spend and salaries, as well as the multiplier effect of that spend catalyzing activity throughout the sector.

In addition, EMEC has created highly skilled, high value jobs and is now one of the top 20 employers in Orkney.

The number of people directly employed increased from 44 to 85 between 2017 and 2023, with average earnings higher than the Orkney average.

Additionally, BiGGAR estimate EMEC has instigated 224 jobs in Orkney over a twenty-year period – 406 across Scotland, and 540 in the UK as whole.

While EMEC was set up to develop a wave and tidal energy sector in the UK, the existence of the center has instigated research and demonstrations around not only ocean energy, but also green hydrogen, storage solutions, smart local energy systems, transport and heat.

Since 2016, EMEC has diversified and grown its operations with support from competitively won grant-funded projects.

EMEC has secured £49.5 million (€56.8 million) of research and development funding since 2016, the vast majority of which was inward investment to the UK.

The center is also fundamental in supporting industry to commercialize new technology, reduce risk, reduce costs and improve efficiency by taking part in R&D projects totaling £538 million (€616.8 million) for the renewable industry.

Scottish government’s energy minister Gillian Martin said: “This report highlights marine energy’s potential to deliver high quality jobs and generate significant economic impact for Scotland. The Scottish Government has supported many of the marine energy projects at EMEC over the last two decades, as well as its pioneering activity in hydrogen and other energy technologies.”

Neil Kermode, managing director at EMEC, added: “It’s thanks to government foresight to create an ocean energy test center that we have unrivalled activity around UK shores today.

“We’re seeing ship building being revitalized, with Dundee seeing the first vessel launch – in the form of Orbital’s O2 – since ship building stopped over forty years ago. We’re seeing the supply chain gear up with new equipment and we are seeing new jobs created daily. The development of a locally-grown renewables industry also strengthens the UK’s energy security and is triggering investment in peripheral areas supporting the levelling up agenda.”

“EMEC’s a brilliant case study to demonstrate the value of developing marine renewables and pursuing a clean energy transition, a microcosm of what can be accrued on a far larger scale if we wholeheartedly push on developing industries that will help solve the climate crisis.”