I_O 2014_Oliveira_Cassidy_Coelho.pdf

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EMPLOYMENT EFFECTS OF ELECTRICITY

GENERATION FROM RENEWABLE ENERGY

TECHNOLOGIES IN THE UK

C. Oliveira1,2

, N. Cassidy3

, D. Coelho2,4

1Polytechnic Institute of Coimbra, ISCAC, Portugal2 INESC Coimbra, Portugal

3Maastricht University4Polytechnic Institute of Coimbra, ISEC, Portugal

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OUTLINE MOTIVATION

METHODOLOGIES TO ESTIMATE EMPLOYMENT EFFECTS

THE RENEWABLE ENERGY SECTOR IN THE UK

METHODOLOGY

Data: limitations and assumptions

ILLUSTRATIVE RESULTS

CONCLUSIONS AND FURTHER RESEARCH


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MOTIVATION

20% reduction in GHGemissions20% increase in the share

of renewable energy

Increase in electricitygenerated from RETS

(29GW by 2020 in the UK)

Benefits

Global Warming

Energy Security

Employment ??


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MOTIVATION (UK) UK commitment to reduce GHG emissions by at least 34% compared to

1990 levels and to increase share of RE to 15% by 2020 (UKGovernment, 2013).

European Renewable Energy Council (EREC, 2013) recently ranked the

UK 25thout of 27 member states on its progress in meeting the RE

target for 2020.

In 2010 it was only 3.3% (54TWh) of energy consumption came from

renewables and UK was the only country that did not achieve its first

interim target under the Directive by the end of 2011 (4.04% for 2011

to 2012) (EREC, 2013).

In 2012 contribution of RES to electricity generation stood at 11.3%

(DECC, 2012).

Assessment of employment impact of growth in RES in UK is highly

complex, namely considering future support and investment in this

sector remains uncertain.


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Green Jobs (Different Concepts) Green Job is used to conceptualise the perceived cross over of interests between

the environment and employment.

Without a common definition of what a green job is, quantifying employment

benefits, associated with a transition to a low carbon economy, is especially difficult.

ECORYS (2008) gross employment forecasts for Europe in the year 2020 range

between 2.3 million to 21 million!!!

Entities Definition

UNEP (2008) Work in agricultural, manufacturing,

R&D, administrative, and service

activities that contribute substantiallyto preserving or restoring

environmental quality.

EUROSTAT (2011) Environmental Goods and Service

Sector as aheterogeneous set of

producers of technologies, goods and

services ... that seek to protect the

environment or minimise the use ofnatural resources


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Employment Estimates and Renewable Energy Sector

Difficulty in arriving at employment estimates can be seen when

looking at one sub-group of green jobsthose in RET.

Two methods are commonly used:


IO MethodAnalytical

Survey Data

Direct impact only

Best suited for quantifying job

effects of a precise energy project

or industry

IO Table

Direct, Indirect and Induced effects

Best suited for quantifying job

effects at national or regional level


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Criticisms of Employment Estimates

Different methodologies are used and not clearly defined

making it difficult to compare employment estimates.

Employment benefits are over estimated due to the assumptionthat RES jobs are labour intensive.

A positive employment outcome depends heavily on Climate

Change targets being achieved and a suitable policy

environment.

Hence broad sweeping claims that there will be a positive

employment outcome should not be madethe outcome will

be context specific!!!



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Study Methodology Employment Estimates

Department of Trade and

Industry (DTI, 2004)

Analytical 17,000 to 35,000 jobs per

year up to 2020 if the

goal of 20% RES is met

Renewable Energy

Association (REA, 2012)

Evaluation of business

registers and case studies

2010/2011 the RES sector

supported 110, 000 jobsand by 2020 it could

support 400,000 jobs

Breitschopf et al. (2012) IO 2009 RES-E industry

employed 16,000

persons

Marsh and Miers (2011) IO considering the

amount of jobs that could

have been created if the

subsidies received by RES

were spent elsewhere

For every job created in

RES in the UK, 3.7 jobs

will be lost elsewhere



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How many jobs will be created in the UK from increasing the share

of renewable energy in the generation of electricity?

Total Number of Jobs Type of Job

Are the workers adequately prepared and protected?

Direct impact on the renewable energy

sector due to an increase in final demand for

renewable energy

Indirect impact on other sectors due to an

increase in final demand for renewable energy

Installation the manufacturing and build of

renewable energy technologies

Operational the maintenance and day-to-day

operation of renewable energy technologies

Fuel input Bioenergy requires fossil fuel

energy as an input into its production

Research Question



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Methodology: Application to RES-E in the UK

Match the domestic output of each

relevant activity/ component of RET to

industry in I-O table

Calculate total output of each relevant

activity/ component

Decompose phases into their

activities/components

Divide into life cycle phase

Installation

Operation Fuel (for Bio energy)

For example, installation of offshore wind can be broken down

into the manufacturing of rubber and plastic, transportation etc.

Total expenditure connected to each life cycle phase Cost share of each relevant activity/component as % of life cycle

phase

Calculation slightly different depending on life cycle phase

For example, transport (activity)used in the construction of

offshore wind (life cycle phase) is split between the industry

Land Transport (30%) and water transport (70%)

Calculate the employment effect of

each activity/component

Use corresponding labour coefficient to calculate direct

employment effect

Exploit the Leontief Matrix, using the employment multipliers, to

arrive at indirect employment effect


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Methodology: Application to RES-E in the UKData: limitations and assumptions

Limitations Assumptions

UK most recent IO table is for 2005.

World Bank (2011) acknowledges IOdata from one country can be applied

to another so long as this application

can be justified, i.e. the production

processes (labour and capital inputs)

are similar.

Use the Scottish IO table for the year2009.

UK (including Scotland) use a different

classification system (SIC - Standard

Industrial Classification vs. NACE -

Nomenclature statistique des activits

conomiques dans la Communaut

europenne).

Industries of the Scottish IO table

were changed in line with the NACE

classification system.

Data in columns and rows of had to

be carefully merged to make new IO

table.

Unknown when the increase in

renewable energy will take place to

reach 2020 target.

1st) Employment estimates provided

are based on the assumption that each

individual RET target will be met.

2nd) Employment estimates if electric

capacity of RET combined for the year

2020 was 29GW only.


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Methodology: Application to RES-E in the UKData: Assumptions

Department of Energy and Climate Change has set a minimum target for

renewables to deliver 29GW of electricity capacity in the UK by 2020 (anincrease of 21 GW from 2009).

13 GW 11.9GW

11.6 GW


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Illustrative Results

1st) Results: Total employment by life cycle phase 2020

(when individual targets are met)

37.148

21234

6941

22.142

5431

3103

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

Installation of new

facilities

Operation of

facilities

Fuels

Employedpersons

Indirect

Employment

Direct

Employment

95,999jobs, with 65,323

direct and 30,676 indirect.

Installation of newfacilities accounts for the

majority of jobs - 59,290.

Indirect employment

effect is larger for the

installation compared to

operation

Fuel is only an input for

bioenergy, the number of

associated jobs is relatively

small - 10,044


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Although installed

capacity of onshore wind

and PV is greater than for

offshore wind, the latter

technology is expected tocreate largest number of

direct jobs.

Offshore wind is one of

the most physically

demanding RET to constructas well as operate, especially

the further offshore and

remote the marine

environment is.

1st) Results: Total direct employment by technology 2020


0 5.000 10.000 15.000 20.000

Geothermal electricity

Hydropower large

Hydropower small

Solar thermal electricity

Photovoltaics

Tidal and wave electricity

Wind - Offshore

Wind - Onshore

Biogas (incl. CHP)

Biomass small scale (incl. CHP)

Biomass large scale (incl. CHP)

Biomass co-firing (incl. CHP)

Biowaste (incl. CHP)

Installation of new facilities

Operation of facilities

Fuels


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Overall PV is expected to

create the largest number of

jobs - 27,085.

1st) Results: Total indirect employment by technology 2020


0 2.000 4.000 6.000 8.00010.00012.000

Geothermal electricity

Hydropower large

Hydropower small

Solar thermal electricity

Photovoltaics

Tidal and wave electricity

Wind - Offshore

Wind - Onshore

Biogas (incl. CHP)

Biomass small scale (incl. CHP)

Biomass large scale (incl. CHP)

Biomass co-firing (incl. CHP)

Biowaste (incl. CHP)

Installation of new facilities

Operation of facilities

Fuels


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2nd) Results: Total employment by life cycle phase 2020

(when the overall target of 29GW is met)

59,143 employed

persons, which is

considerably less than the

95,999 originally estimated22.099

13689

4431

13.469

3501

1954

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

Installation of

new facilities

Operation of

facilities

Fuels

Employedpersons

Indirect

Employment

Direct

Employment


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Employment estimates are based on assumption that the 2020 RET individual targets will be met

(best-case scenario) - With UK government failing to keep on top their RE commitments, RE jobscould be considerably less.

Majority of jobs would be in installation of new facilities, and many of these are likely to be only

temporary, as opposed to in operation and maintenance, where the jobs are more permanent.

Labour intensity of renewables tends to decline as experience in installing and operating the

technology increases.

Further effort to revise and collect data that is necessary for producing employment estimates is

encouraged so as to put an end to the disparities currently haunting the literature.

An up-to-date IO table and cost structures of RET would help to improve the accuracy of

estimates which are derived from an IO analysis.

IO tables would be expanded to allow for the inclusion of RES as its own separate industry.

UK and Scottish National Statistics Office ought to consider using the NACE classification

system when constructing the tables to allow for cross country comparisons to be made.


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It is recommended that future research is concentrated also on establishing the net effects.

Recent attempts to provide net employment estimates in the UK are not overly

reliable.

The need for a stable policy environment is therefore crucial not only for ensuring any

employment benefits are optimised but also to enable a full assessment of what the

expected consequences, both positive and negative, will be for employment.

It is important to know what type of skills are needed to perform these roles.

This kind of information has been limitedlargely because of the unpredictability

associated with the transition and also because it is likely that the skill needs will be

different according to local contexts.

Finally, it is increasingly recognised that along with determining the quantitative impact on

employment, the qualitative impact also needs to be addressed to fully appreciate the

consequences of moving to a low carbon economy.

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