Creating Jobs via Renewable Energy Adoption | 07/02/15
by John Brian Shannon
Adding new jobs to the economy is always a good thing
In good times or bad, adding more jobs to the economy always equates to higher GDP, lower debt-to-GDP levels, lower unemployment insurance expenditures and higher revenues for governments from income tax and sales tax.
There are no examples where adding net jobs to an economy has resulted in a net loss to the economy
It’s positive for individuals too. Higher employment levels generally lead to higher incomes, small and large businesses notice increased revenue and there is always the chance that companies may begin to expand their facilities and hire more staff to handle increased sales.
Which is why the case to add more renewable energy is so compelling
Over decades of time, mature industries have figured out ways to increase output with fewer employees.
In the Top 10 on the mature industry list, must certainly be hydro-electric power plants, followed by nuclear power plants and gas-fired power plants. There we have astronomical installation costs and employment numbers — but once construction of the power plant is completed only very low staffing levels remain to operate the power plant.
Which is very unlike the case with renewable energy. Why? Because once a multi-billion dollar hydro-electric dam is built, it’s built. You don’t need to build thousands of them per day.
It’s the same with multi-billion dollar nuclear power plants — all you need after the construction phase ends are a small number of highly trained people to monitor the various systems. And some security people. That’s it.
With solar panels, a factory must produce 1000 per day (or more, in the case of larger factories) every weekday. Suitable markets must be found, factories must be built/leased, production floors must be built, materials sourced, and the panels themselves must be designed and engineered, assembled, packed, shipped and accounted for. Accountants do what they must do, marketing people manage a steady train of media events, trade shows and advertising programs, and on and on it goes — and all of it is a part of the solar industry. That activity creates work for thousands of people, every workday of the year. (And that short description doesn’t begin to cover it)
Then there are the solar panel installers, the sales teams/estimators, and the companies that build the inverter systems, which is a whole other value chain.
The wind power industry can also make high employment/lower power plant cost claims — although wind turbines average about $1 million dollars each — as opposed to solar panels which mostly range from $10 each to $400 each, depending on their size and composition.
Renewable energy is hugely labour-intensive and many thousands of permanent jobs are created — quite the opposite of conventional power generation
It is worth commenting that 2014 renewable energy employment numbers (once they become available) will show a significant improvement over 2013 numbers.
The entire industry is surging forward unequally, but renewable energy growth in some nations is trending upwards like the Millennium Falcon trends upwards.
Below is a breakdown graphic showing the labour intensity of the various types of renewable energy.
We can also look at a breakdown graphic of jobs per MW of electricity produced where we see that coal, nuclear, and oil & gas require very few humans per MW.
There’s no doubt that global energy demand is growing, not only in the developed world, but in the developing world as well.
Each kind of energy (non-renewable and renewable energy) has it’s own pros and cons.
One of them, is that non-renewable energy requires far fewer humans over the lifetime of the power plant.
Renewable energy on the other hand, is a rapidly-growing manufacturing, installation, and marketing industry that requires evermore blue collar and white collar employees.
And now that solar power, wind power, and biomass power have reached — or are within months of matching (per kWh) price parity with non-renewable power plants — the question becomes;
Do we want to employ 1.3 persons full-time per MW, or do we want to employ up to 24 people full-time per MW?
For comparison purposes, the typical coal, gas, or nuclear power plant can supply 1000 MW (or 1 GigaWatt) of electrical generation capacity, while the average wind turbine can supply 1 MW each.
The average 1 MW wind turbine costs about $1 million apiece, so to get 1 GW of electrical generation capacity, you need to install 1000 of them (1000 x $1 million each = $1 billion total) and the installation and connection to the grid of that many turbines might take up to 24 months.
Each 1 GW installation of coal, gas, or nuclear power, costs well over $1 billion and can take up to 15 years to construction completion.
For example, the 2.4 GW nuclear power plant under construction in Vogtle, Georgia was originally planned to cost $14 billion, but due to construction and regulatory delays (and now lawsuits between the principals involved) it may cost significantly more than that and the completion date has been extended by months, or even years.
At this point, the total cost may exceed $17 billion and it may take an extra year to complete — for a total of 2.4 GW of installed capacity over 11 years of construction and delays, at a total cost of $7.08 billion per GigaWatt. It won’t get any better than that, but it may get much worse.
The 10-year construction plan is already behind schedule by 14-months, and now faces an additional (up to) 18-month delay.
One point about Plant Vogtle (the official name of the plant) is that the two 1200 MW (1.2 GW) reactors are of the latest GE/Toshiba AP-1000 design, noted for their passive safety systems and additional safety redundancies built into the power plant. If you’re going to build a nuclear power plant it might as well be the safest one.
As new capacity is added to global electrical grids, more of it is renewable energy
More utility companies are adding new renewable energy capacity as opposed to adding new non-renewable energy capacity due to faster installation time frames, fewer regulatory delays, the lack of fuel supply concerns going forward, and total installation cost per GigaWatt.
In 2013, of the 207 GW added to the world’s electrical grids — renewable energy accounted for 120 GW of new installations, while 87 GW accounted for non-renewable energy.
Once the 2014 numbers are released to the public, the renewable energy statistic will have improved over 2013’s numbers. And 2016 should easily surpass the 70/30 metric.
It’s easy to visualize this in the chart below.
As renewable energy displaces non-renewable energy additions to the grid — remember that renewable energy gets only 1/4 of the subsidies that fossil fuel energy gets!
Imagine if renewable power generation got the same subsidies as non-renewable energy power generation
In practical terms, it would mean that 100% of all new power generation would be renewable energy.
Also, the renewable energy manufacturing sector would need to accelerate production to meet demand — meaning many hundreds of thousands of permanent jobs would be created immediately after the levelized subsidy was announced.
Between 2017-2019 — and even with the higher subsidies enjoyed by coal, nuclear, and oil & gas — it will cost less to install new renewable energy power plants than to install new non-renewable energy power plants.
Germany is one of the countries leading the transition to renewable energy
Due to German public pressure in the aftermath of the Fukushima-Daiichi incident in March 2011, Germany shut down nearly half of their nuclear power plants and were forced to accelerate their transition timeline to renewable energy.
This unexpected development created additional costs for Germany, but regardless, their Energiewende program is still a stunning renewable energy success story.
Although progress has slowed from the frenetic pace of 2011-2013, Germany is very much a world leader in the transition to renewable energy.
Renewable energies were the number 1 source of power production for the first time ever. [In Germany]
Renewables gained slightly in 2014 and now comprise 27.3 percent of domestic power consumption.
They have now permanently displaced lignite [brown coal] as the top source of power in the electricity mix. — The Energiewende in the Power Sector : State of Affairs 2014 (downloadable PDF)
Here is a nice chart, courtesy of our friends at the Fraunhofer Institute in Germany.
There is no doubt that the world will transition to renewable energy, and even major oil companies like Shell and BP are in agreement that by the year 2100, almost 95% of all energy demand will be met by renewable energy.
In one scenario, Shell says that by 2060 the largest energy provider will be solar power.
How quickly that energy transition will occur, is what the present conversation is all about
Increasingly, the conversation centres around matching renewable energy subsidies with the (4x higher) subsidies enjoyed by coal, nuclear, and oil & gas power generation.
So get ready to breathe fresh air, because change is coming!
- German renewable energy leaves coal behind (JBS News)
- Renewables help cut German CO2 emissions (Deutsche Welle)
- Analysis: Turnaround for the Energiewende (Agora-Energiewende)
- How a New Energy Policy can Save the EU (JohnBrianShannon.com)
- As Nuclear steps aside, Renewable Energy steps up to power Europe (JBS News)
- BP ‘Energy Outlook 2035’ and Royal Dutch Shell ‘New Lens Scenario’ (JBS News)
- INFOGRAPHIC: Advanced Energy Leads California Jobs Growth (AEEE Institute)
Thank you to our friends at IRENA and at Fraunhofer Institute for their valuable graphics!