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The electricity, gas and water utilities sector is a key part of the economy. Nationally comprising about 530 separate enterprises, it has annual turnover of about £73bn and generates gross value added of more than £26bn. It includes all units mainly engaged in the generation, transmission or distribution of electricity; the manufacture, distribution and trade of gas; and the collection, purification and distribution of water, including the operation of sewerage treatment plants and drainage systems. Whilst not in themselves drivers of economic development, the utilities have very strong interactions with other sectors of the economy and play a vital part in providing the infrastructure necessary for growth.
Scout Moor Wind Farm, RossendalePhotograph of the Scout Moor Wind Farm in Rossendale (External) Picture © Copyright (External) Paul Anderson
In terms of job opportunities the utilities sector is a relatively small one in Lancashire with a 2006 employee workforce of about 2,100 or just 0.3% of the sub-region total (against 101,000 or a 0.4% share nationally) based in about 60 separate establishments. Well over a half of the total utility jobs are based in Lancaster with lesser proportions in Preston, Hyndburn, South Ribble and Wyre. In most other districts there is only a small or token presence. All but four establishments employ fewer than 100 people and statistically the average company size is just 32 employees. It remains a strongly male-dominated sector with men comprising 90% of the workforce and 98% of all jobs remain full-time.
All the utility services are represented locally, including a number of the major players like (External) United Utilities (water supply and treatment and the management of electricity networks), (External) Scottish Power (electricity distribution), (External) e-on (electrical distribution and supply), (External) British Gas (retail gas and electricity supplier), (External) Centrica (integrated energy company), the (External) National Grid Company (management of gas and electricity networks) and others, through various area and district offices and depots, providing a full range of services to meet industrial, commercial and domestic needs. At Heysham the two (External) British Energy owned AGR plants represent one of the largest concentrations of power generation in the UK producing approximately 4% of the nation's electricity. Fuel for these plants and for all other UK nuclear plants is manufactured at the (External) Westinghouse Springfields site near Preston.
At the other end of the spectrum there are small wind farms at (External) Coal Clough , Cliviger, Burnley; (External) Caton Moor , Lancaster; and (External) Hameldon Hill , Burnley with a combined installed capacity of 30 Megawatts capable of supplying about 17,500 homes. Currently under construction and due to reach full generation capacity by the summer of 2008 (External) Scout Moor Wind Farm on the moors between Rawtenstall and Rochdale will be the biggest onshore wind farm in England stretching across two miles of moorland. Comprising 26 turbines, each 60 metres in height and with a generating capacity of 2.5 megawatts, the project is being developed by Peel Wind Power Ltd, a member of the North West-based property, investment and transport Peel Group. The wind farm will generate 65 megawatts of electricity, providing power to meet the needs of about 40,000 homes, each year substituting for the release of 160,000 tonnes of carbon dioxide into the atmosphere. As well as these land-based schemes, tentative proposals have been made for the installation of very large wind capacity off the Lancashire coast.
Hybrid Power Farm
(External) Eclipse Energy , a relatively new independent firm, has been given the go-ahead by the Department of Trade & Industry to build a wind farm in an Irish Sea gas field off the coast of Lancashire and Cumbria in what is billed as the world's first such hybrid energy project.
The £280m Ormonde project will generate up to 200MW of electricity from 30 wind turbines, or gas from the gas fields if the wind dies down. Electricity will be transmitted via a subsea cable inter-connector to the power network on the mainland. Eclipse says that the scheme could produce electricity to over 155,000 homes, of which 70,000 or more would be powered by renewable energy. The gas field that the company plans to tap has six to eight years of reserves and would be less viable without the extra revenues generated from the associated wind farm, which will operate for far longer. Conversely the power generated from the gas field would supplement renewable energy at times when the wind is not blowing.
Financial Times , 9 February 2007
Employment in this sector was at a peak in Lancashire in the mid-1950s when it provided jobs for over 10,000 people across the county (Figure 1). With efficiency and productivity gains employment subsequently declined steadily year-on-year though job losses became particularly severe only after the late 1980s following on from the privatisation of most of these sectors. Thus, between 1989 and 1998 there was a net loss of nearly 4,700 utility jobs in Lancashire, a fall of over 65%, with numbers continuing to dwindle subsequently. There are, however, signs that this protracted decline is coming to an end as employment levels begin to bottom out. All utility sectors have experienced reduced job opportunities (Table 1). Some compensating employment growth over the 1980s in electricity generation associated with the commissioning of the Heysham nuclear plants has now been reversed.
Figure 1 Electricity, Gas and Water Supply Employee Jobs in Lancashire, 1950-2006Graph showing how the number of employee jobs in the electricity, gas and water supply industries has changed in Lancashire from 1950 to 2006 - see text for details
Source
ONS - Ministry of Labour/ONS - ERII Employment Records
It should be stressed that the large-scale apparent job reductions within the utilities sector have not necessarily entailed job losses per se. Most utilities have participated in the growth of out-sourcing and the extensive use of contract workers from third party companies. Many of these jobs have been reclassified under new SIC headings according to the activity of the employer – for example in construction (e.g. laying pipes and cables, servicing the networks) and various business service activities – and these are now part of the utilities supply chain rather than being employed directly.
Coal Clough, Cliviger, BurnleyPhotograph of the wind farm at Coal Clough, Cliviger, Burnley
Utilities provide career opportunities for people with varying levels of experience and education. Historically apprenticeships have been a significant entry route into the sector with about 60% of employers employing apprentices at Levels 2 and 3. According to (External) Careers Northwest there are a wide variety of jobs in the sector and a need for skilled professional staff such as engineers, particularly electrical engineers, in areas such as power and generation. Process and project engineers are also required in the gas and water sectors. All sectors also need professional staff such as surveyors, ICT specialists and economists/statisticians, and many of the professional roles have associated technical roles that support their activity, (e.g. engineering technicians. The sector has many roles for managers and administrative and clerical staff too, while the supply companies within the sector often have large contact centres covering areas such as customer services and sales. Skilled workers such as pipe fitters, line repairers and cable joiners are also in demand, and there are semi-skilled jobs such as water plant operatives. There are also opportunities for unskilled staff in the generation, manufacturing and supply aspects of the industry.
Utilities and the services they provide are so vital to everyday life that they are considered "public goods" and are usually heavily regulated. The past few decades have witnessed major changes in the utility industries and in their operating environments. Among them are technological developments which have helped to improve the quality and quantity of services and which have also raised skill requirements. Perhaps of even greater impact has been the privatisation and deregulation of the major utility operators and the liberalisation of their markets – a profound change for what were previously fairly stable and predictable industries operating under state control with virtual monopoly markets. It has created competitive markets and resulted in considerable structural change, decentralisation, unprecedented public scrutiny and the entry into the market of many new operators forcing radical change on the way that business is done. There is a high level of ownership by foreign companies and some tendency towards multi-utility companies as well as diversification into other activities has meant that the boundaries between the sectors have become increasingly blurred. The process has helped to raise investment and productivity levels (gross value added per head in the sector is running at about £180,000 per annum compared with £48,000 in manufacturing) but has also given rise to substantial employment losses or displacement. These have resulted both from direct job cuts and from a greater degree of contracting-out for services previously conducted in-house as the newly privatised companies sought to control costs and concentrate on core activities.
Key drivers for most utility sectors are increased competitiveness, globalisation and technological innovation, the regulatory framework, demographic factors, the weather and the general level of economic activity. Demand patterns therefore show important seasonal and cyclical trends though in the aggregate the supply and consumption of the products of all three utilities are increasing. Concerns about rising energy costs and environmental/sustainability considerations are promoting more judicious and efficient usage. Power generation from renewable sources is high on the agenda. Key issues such as the UK's energy policy and the role of nuclear and other power sources are still in the process of being resolved. Large investment programmes have been initiated, particularly in the water sector, mainly in replacement plant and infrastructure to provide increased energy efficiency, reduced emissions of pollutants and improvements to distribution networks and treatment facilities – a process driven by economic, environmental and legislative forces.
Gas and Electricity ConsumptionThis page was compiled by Peter Kivell .
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Any other questions about the content of this page may be sent to EconInfo@lancashire.gov.uk .
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