Powering Productivity

However, the real experience in much of the country is that such advances are being slowed and hindered because of power capacity challenges and the time it takes to connect to the grid. On the supply side, the renewable energy sector is experiencing similar delays in its ability to feed the UK’s rapidly expanding demand for power.

Productivity depends on power

1. Electricity serves as a key factor of production for firms that have low substitutability with other factors of production. Research indicates that when energy services are scarce, they strongly constrain output growth, resulting in a low-income steady-state economy.
2. Housing supply relies on adequate power capacity in the locations allocated for growth, whether new settlements or brownfield locations. High-growth economies are damaged by companies’ inability to recruit and retain staff and lost time in commuting.
3. Energy is necessary for delivering public services, crucial to productivity and economic growth. These might include transport, education, and health. The state uses energy to provide vital public services, including education.
4. Finally, power consumption may improve household well-being and create efficiency gains, such as time savings, communication, new and developed skills, and education.
   
   

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