Introduction

Back in January the government released the results of the first part of the seventh Allocation Round (AR7) renewables auction and claimed they would unlock “7,000 good, skilled jobs in every corner of the country”. Earlier this month, they claimed the AR7a results would support “up to 10,000 jobs”.

On the face of it, more jobs sounds like a good thing. But creating more jobs by digging holes and filling them in again creates activity but destroys value. We are falling into the same trap with the electricity generation sector and in danger of falling down the energy cliff.

Electricity Sector Productivity GVA per Hour

We can shed some light on this using the productivity statistics for division level industries published by the ONS. SIC division 35 covers electricity, gas, steam and air conditioning supply so is not perfect for looking at just the electricity sector but is the closest we can get.

Figure 1 shows what has happened to hours worked, gross value added (GVA) and productivity measured as £GVA per hour since domestic UK electricity generation peaked in 2005.

Figure 1 - Hours worked Gross Value Added (£m) and Productivity (£GVA per Hour)

GVA rose from just under £15bn in 2005 to £29.2bn in 2009 before fluctuating in a £20-31bn range until 2023 when there was a sharp jump to over £50bn in 2023 and 2024, probably reflecting the sharp increase in energy prices. Total hours worked has risen from 170m hours in 2005 to a peak of 287m hours in 2018 and then fluctuated in a range of 245-275m hours. Productivity measured in GVA per hour worked has followed a similar path GVA, fluctuating in a range £87-£133 per hour up to 2023 before rising sharply to over £200 per hour in 2023 and 2024.

Some might argue that increasing GVA per hour in the electricity is a good thing. However, this measure is really tracking high energy prices, so we need to find a better measure.

Electricity Sector Productivity MWh per Hour

A better measure is to look at the amount of electricity generated per hour worked. Helpfully, Our World in Data produce data that shows UK electricity generated by source. Figure 2 compares total electricity generated to productivity measured in MWh per hour worked.

Figure 2 - UK Electricity Generation (TWh) vs Productivity (MWh per hour)

Here we see that total electricity generated has fallen 28.7% from 398TWh in 2005 to 284TWh in 2024. Productivity has more than halved from 2.34MWh/h in 2005 to just 1.13MWh/hr in 2025. Looked at in this light, we can see that the productivity of the sector is falling rapidly, quite the opposite of the ONS results.

Interestingly, this reduction in the productivity in the electricity sector coincides with the increase in electricity generation from intermittent renewables as shown in Figure 3 (note the left hand y-axis for the percentage of intermittent renewables generation is inverted).

Figure 3 - UK Electricity Productivity (MWh per hour) vs Share of Intermittent Renewables (inverted %)

As the percentage of electricity generation from wind and solar has risen from 0.7% in 2005 to 34.5% in 2024 (36.1% in 2025 but not shown because we do not yet have productivity data for that year) the productivity of the sector has fallen from 2.34MWh/hr to 1.13MWh/hr (R² = 63.6%)

The increase in intermittent renewables means we are literally getting less output despite higher labour input. This is the opposite of progress.

Falling Down the Energy Cliff

We have discussed the Energy Cliff in earlier articles (see Figure 4).

The Net Energy Cliff was first described by Euan Mearns and describes what happens when we use technologies with low energy return on energy invested (EROEI) like wind and solar power. Net Energy is the surplus energy available to society after deducting the energy used in energy gathering activities. If we have EROEI = 1, then net energy is zero. We are using as much energy to gather energy as the useful energy produced. Figure 4 shows net energy as a percentage of total energy is plotted against EROEI. The blue area on the chart shows how the energy left for society varies with EROEI. When EROEI starts to get into single figures the energy available for society starts to plummet rapidly as we spend more time and energy gathering energy and we have much less net energy available and society starts to degrade.

Starting with the industrial revolution, society moved up the EROEI scale as we made the transition from wood to coal, then coal to oil and gas and then on to nuclear resulting in lots of surplus energy. This meant we could move from a largely agrarian society to one where we could invest in infrastructure such as better buildings, roads, bridges, railways, ships, cars, aeroplanes and even spacecraft. We could invest time and effort into scientific research that produced new inventions that used more of that energy such as steam engines, internal combustion engines, electric motors, computers, rockets and so on. Surplus energy also allows more time and effort to be devoted to education and high culture such as art, theatre and music.

We can clearly see that the move to low EROEI intermittent renewables is moving us back down the EROEI scale and we run the risk of falling down the net energy cliff. The productivity data discussed above shows this happening in real time.

Net Zero using intermittent renewables is the energy equivalent of digging holes and filling them in again. Net Zero is destroying value and causing society to regress. The sooner it is stopped the better.

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This article (Electricity Productivity Data Shows we are Falling Down the Energy Cliff) was created and published by David Turver and is republished here under “Fair Use”

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