Employment Impact of using RE Sources in Electricity Generation - PowerPoint PPT Presentation

Employment Impact of using RE Sources in Electricity Generation Barbara Breitschopf & Carsten Nathani & Gustav Resch Presentation of methodological outline and main results

How to assess employment impacts of RE deployment – methodology Content  Background information on the project  Principal approach  Types of impact assessment studies  Deciding on approaches  Gross impact studies  Net impact studies  Application of gross approach 2

Background  Tremendous growth of RE capacities worldwide:  PV: 74% in 2011 (GSR, REN21 2012)  CSP: 35% in 2011 (dito)  Wind: 20% in 2011 and 26% between 2006 und 2011 (dito)  about 37% of newly installed power capacity is from non-hydro-RE in 2011  RE power capacities in GW (source: GSR, REN21 2012) : • China: 70 GW, USA: 68 GW, Germany: 61 GW 1 = excl. hydropower; incl. hydropower: 1360 GW

Background  Investments in RE* in billion $ (from: Global Trends in RE Investments 2012, UNEP & Frankfurt School 2012) : What are the economic implications of investments in / deployment of RE ? * including small hydropower

Text * (Renewable Background Energy Technology Deployment with its current members Many impact studies have been conducted but with Canada, Denmark, France, Germany, diverging results due to different methodological Ireland, Japan, Netherlands, approaches, system boundaries and assumptions Norway, and United  the IEA-RETD* initiated and funded a project: Kingdom).  The Economic and Industrial Development (EID)-Employ project:  provide a better understanding of key parameters and mechanisms that determine/influence the impacts of RE on employment;  review employment impact studies and elaborate guidelines to assess employment impacts. This includes the identification of data sources and other inputs;  Objective: to get comparable results based on a consistent and homogenous approach; to define impacts or types of impact study;  Target group: policy maker and analysts  assess gross employment of RETD countries where data is available by applying the guidelines and document the results of the project 5

Text Content  Background information on the project  Principal approach  Types of impact assessment studies  Deciding on approaches  Gross impact studies  Net impact studies  Application of gross approach 6

Text Principal approach: At what we are looking? - define boundaries of the RE industry* (example wind power plant (WPP)) life cycle OPERATION� phase (O&M) CONSTRUCTION� AND� INSTALLATION� Site� � Connec on� Opera on� Project� prepara on� to� the� net� of� WPP� Demoli on� development� of� WPP� � and� planning� Replace- Founda ons� Assembly� ment� of� of� WPP� for� WPP� WPP� parts� *RE industry: a cross- Transport� WPP:� Wind� power� plant� sectional industry (no WT:� Wind� turbine� separate NACE MANUFACTURING� classification) that life cycle phase comprises all Manuf.� of� Manuf.� of� Manuf.� of� Manuf.� of� WT� rotor� other� activities related to (manufacturing) WT� tower� WT� nacelle� blades� components� RE use  the basis of the assessment approaches are the life cycle phases of RE generation technologies 7

Principal approach – system boundaries  RE industry: cross-sectional industry that comprises all economic activities related to RE use  All life cycle phases of a RE facility:  Manufacturing, construction and installation (MCI) (incl. reinvestment)  Operation and maintenance (O&M)  Demolition  Breakdown of life cycle phases into economic activities (important for capturing imports and exports)

Text Principal approach: Steps and elements - the functional chain  the life cycle of RE generation technologies is broken OPERATION� CONSTRUCTION� AND� INSTALLATION� Site� � Connec on� Opera on� Project� prepara on� to� the� net� of� WPP� Demoli on� development� of� WPP� � and� planning� down into life cycle phases: Replace- Founda ons� Assembly� ment� of� for� WPP� of� WPP� WPP� parts� Transport� WPP:� Wind� power� plant� WT:� Wind� turbine� MANUFACTURING� Manuf.� of� Manuf.� of� Manuf.� of� Manuf.� of� WT� rotor� other� WT� tower� WT� nacelle� blades� components� policies Functional chain: impulses positive / (from prices, negative impacts activities life cycle income, impact in RE (CE) phases & activities) mechanisms technologies technologies Δ employment Examples: Planning expenditures direct, indirect &Development, for investment, and induced O&M, fuel …. MCI, O&M, fuel effects supply, income from ex/imports, ... RE, prices for power, … CE: conventional energy; 9 MCI: manufacturing, construction, investment; O&M: operation and maintenance;

Text Principal approach: Steps and elements *RE industry: a  activities generate economic impulses in form of cross-sectional industry (no expenditures separate NACE classification) that for investment, fuel supply, O&M, other services and comprises all trade or, alternatively, from generation and activities related to RE use capacities (for approaches ** CE industry: without a model) cross-sectional industry that  further impulses could come from electricity prices comprises all and income generated in the (RE) industry* activities related to CE generation  in addition, there could also be decreased impulses from the CE industry**  impulses are translated into different economic effects via impact mechanisms 10

Text Principal approach: Steps and elements *RE industry: a  effects can be cross-sectional industry (no  direct (within the RE or CE industry*) separate NACE classification) that  indirect (in the upstream industry of the RE or comprises all activities related to CE industry*) RE use  induced via prices and income from RE or CE ** CE industry: cross-sectional industry on sectors beyond the RE or CE industry that industry and its upstream industries comprises all activities related to  effects add up to an impact CE generation 11

Text Principal approach: steps and elements – impact mechanisms and effects impulses positive & negative impact mechanisms primary effects secondary effects direct effects induced effects (type 1) income RE (or CE) investment, industry of demand production O&M services, house- for of employ- fuel supply, ... holds consumer consumer ment expenditures, from RE goods goods upstream RE (or trade, industry CE) industry indirect effects demand for costs in industry employ- investment industry production ment goods price impulse/ cost impulse energy private demand for employ- prices for con- consumer ment households sumption goods induced effects (type 2) 12

Text How it should (not) work effects  /  Impact (GDP, jobs) effects ? effects  Based on the effects, two main types of impact studies can be distinguished 13

Text Content  Background information on the project  Principal approach  Types of impact assessment studies  Deciding on approaches  Gross impact studies  Net impact studies  Application of gross approach 14

Text Type of impact assessment studies: policy makers ‘ perception:  relative labour intensive RE  negative effect of power generation vs CE high energy prices  shift to domestic production  job losses in CE (value added) industry  “ co- benefit” of RE  “ net benefit” of RE (part of the whole picture) (whole picture) impact assessment studies Economy-wide jobs RE-industry jobs 00 • effects: positive & negative, • effects: positive, in/direct in/direct and induced • impact: gross 15 • impact: net

Text Type of impact assessment studies (gross) Sectoral impact – impact on RE industry : assessment 1. of jobs in RE industry = gross impact study  provides an idea about relevance and structure (technologies) of this industry (RE),  the following questions can be answered:  Which part of total employment in a country is related to RE use? Relevance of domestic RE use vs. RE technology exports for employment? Relevance of various RE technologies? Relevance of indirect employment in industries supplying the RE industry  looks at positive effects of RE deployment 16

Text Type of impact assessment studies (net) 2. economy-wide impact : assessment of changes in economy wide jobs (all economic sectors) by RE deployment = net impact study  provides an idea about the economy wide impact of RE deployment on jobs (change of jobs e.g. in consumer goods industry)  takes into account (should) effects at all levels: technology system, micro-level (actors like private and public households, firms or sectors, trade) and macro- economic level  includes in/direct, induced effects (positive and negative) of RE deployment  reflects a kind of net benefit of RE deployment (for the entire economy) 17