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by John Brian Shannon | February 8, 2015
The Green Economy – It’s always a good thing to add new jobs to the economy!
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 energy industries have increased output with fewer employees (jobs)
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 energy got the same subsidies as non-renewable energy!
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.
by John Brian Shannon | February 2, 2015
By now, we’re all aware of the threat to the well-being of life on this planet posed by our massive use of fossil fuels and the various ways we might attempt to reduce the rate of CO2 increase in our atmosphere.
The First Option: Economic Incentives to Lower Fossil Fuel Use
Disinvestment in Fossil Fuels (A) or Outright Elimination of Fossil Fuel Subsidies (B)
A) Divestment in fossil fuels is under discussion as one way to lower carbon emissions
The case for divestment generally flows along these lines; By making investment in fossil fuels seem unethical, investors will gradually move away from fossil fuels into other investments, leaving behind a smaller, but hardcore cohort of fossil fuel investors.
Resulting (in theory) in a gradual decline in the total global investment in fossil fuels, thereby lowering consumption and CO2 additions to the atmosphere. So the thinking goes.
It worked well in the case of tobacco, a few decades back. Over time, fewer people wanted their names or fund associated with the tobacco industry — so that the tobacco industry is now a shadow of its former self.
Interestingly, Solaris (a hybridized tobacco plant) is being grown and processed into biofuel to power South African Airways (SAA) jets. They expect all flights to be fully powered by tobacco biofuel within a few years, cutting their CO2 emissions in half. Read more about that here.
b) Another way to curtail carbon emissions is to completely remove fossil fuel subsidies from the equation
In 2014, the total global fossil fuel subsidy amounted to $548 billion dollars according to the IISD (International Institute for Sustainable Development) although it was projected to hit $600 billion before the oil price crash began in September. The global fossil fuel subsidy amount totalled $550 billion dollars in 2013. For 2012, it totalled $525 billion dollars. (These aren’t secret numbers, they’re easily viewed at the IEA and major news sites such as Reuters and Bloomberg)
Yes, removing those subsidies would do much to lower our carbon emissions as many oil and gas wells, pipelines, refineries and port facilities would suddenly become hugely uneconomic.
We don’t recognize them for the white elephants they are, because they are obscured by mountains of cash.
And there are powerful lobby groups dedicated to keeping those massive subsidies in place. Ergo, those subsidies likely aren’t going away, anytime soon.
The Second Option: Reducing our CO2 footprint via a carbon tax scheme
But for all of the talk… not much has happened.
The fossil fuel industry will spin this for decades, trying to get the world to come to contretemps on the *exact dollar amount* of fossil fuel damage to the environment. Long before any agreement is reached we will be as lobsters in a pot due to global warming.
And know that there are powerful lobby groups dedicated to keeping a carbon tax from ever seeing the light of day.
The Third Option: Levelling the Subsidy Playing Field
Continue fossil fuel subsidies at the same level – without any carbon tax.
Quickly ramp-up renewable energy subsidies to match existing fossil fuel subsidies.
Both divestment in fossil fuels and reducing fossil fuel subsidies attempt to lower our total CO2 emissions by (1) reducing fossil fuel industry revenues while (2) a carbon tax attempts to lower our total CO2 use/emissions by increasing spending for the fossil fuel industry
I prefer (3) a revenue-neutral and spending-neutral solution (from the oil company’s perspective) to lower our CO2 use/emissions.
So far, there are no (known) powerful fossil fuel lobby groups dedicated to preventing renewable energy from receiving the same annual subsidy levels as the fossil fuel industry.
Imagine how hypocritical the fossil fuel industry would look if it attempted to block renewable energy subsidies set to the same level as fossil fuel subsidies.
In 2014, renewable energy received 1/4 of the total global subsidy amount enjoyed by fossil fuel
Were governments to decide that renewable energy could receive the same global, annual subsidy as the fossil fuel industry, a number of things would begin to happen;
- Say goodbye to high unemployment.
- Say goodbye to the dirtiest fossil projects.
- Immediate lowering of CO2 emissions.
- Less imported foreign oil.
- Cleaner air in cities.
- Sharp decline in healthcare costs.
- Democratization of energy through all socio-economic groups.
Even discounting the global externality cost of fossil fuel (which some commentators have placed at up to $2 trillion per year) the global, annual $548 billion fossil fuel subsidy promotes an unfair marketplace advantage.
But instead of punishing the fossil fuel industry for supplying us with reliable energy for decades (by taking away ‘their’ subsidies) or by placing on them the burden of a huge carbon tax (one that reflects the true cost of the fossil fuel externality) I suggest that we simply match the renewable energy subsidy to the fossil subsidy… and let both compete on a level playing field in the international marketplace.
Assuming a level playing field; May the best competitor win!
By matching renewable energy subsidies to fossil fuel subsidies, ‘Energy Darwinism’ will reward the better energy solution
My opinion is that renewable energy will win hands down and that we will exceed our clean air goals over time — and stop global warming in its tracks.
Not only that, but we will create hundreds of thousands of clean energy jobs and accrue other benefits during the transition to renewable energy. We will also lower healthcare spending, agricultural damage, and lower damage to steel and concrete infrastructure from acid rain.
In the best-case future: ‘Oil & Gas companies’ will simply become known as ‘Energy companies’
Such Energy Darwinism will reward investors that simply but profoundly migrate from fossil fuel energy stocks, to renewable energy stocks within the same energy company or group of energy companies.
At the advent of scheduled airline transportation nearly a century ago, the smart railway companies bought existing airlines (or created their own airlines) and kept their traditional investors and gained new ones.
Likewise, smart oil and gas companies, should now buy existing renewable energy companies (or create their own renewable energy companies) and keep their traditional investors and gain new ones.
- The Responsible Investor’s Guide to Climate Change (Project Syndicate)
- Full Cost of Coal $500 Billion/Year in U.S., Harvard Study Finds (CleanTechnica)
- The Social Cost of Carbon Six Times Higher Than Estimated – Stanford Study (CleanTechnica)
- Duke Energy Takes Equity Stake in REC Solar, Embraces Distributed Generation (Renewable Energy World)
- Southern Company subsidiary acquires two Georgia solar projects totaling 99 MegaWatts (PRNewswire)
Originally published on DeSmogBlog by Ben Jervey.
The exact worth of massive global fossil fuel subsidies is incredibly hard to figure. There’s no real consistency in the definitions of subsidies, or how they should be calculated. As a result, estimates of global subsidy support for fossil fuels vary widely.
According to a new analysis by the Worldwatch Institute, these estimates range from $523 billion to over $1.9 trillion, depending on what is considered a “subsidy” and how exactly they are tallied.
Worldwatch Institute research fellow Philipp Tagwerker, who authored the brief, explains:
The lack of a clear definition of “subsidy” makes it hard to compare the different methods used to value support for fossil fuels, but the varying approaches nevertheless illustrate global trends. Fossil fuel subsidies declined in 2009, increased in 2010, and then in 2011 reached almost the same level as in 2008. The decrease in subsidies was due almost entirely to fluctuations in fuel prices rather than to policy changes.
In other words, though the estimates vary widely, they all agree that fossil fuel subsidies are back up to the record levels they were at in 2008, before the financial crisis caused a temporary dip. So while world leaders, including President Obama, talk about ending subsidies that benefit one of the world’s richest industries, there hasn’t been any actual reduction.
Why such difficulty calculating the subsidies? For starters, subsidies typically fall into two broadly different categories: production subsidies and consumption subsidies. Production subsidies are what you think of when you hear about special tax rates for oil companies or grants or loan guarantees to “clean coal” projects. Basically, they include anything that lowers the cost of energy production — through tax advantages, loan assistance, grants, or anything else.
Consumption subsidies refer to any financial mechanisms that lower the cost of energy for the end consumers. Think of the artificially low gasoline prices in Venezuela, or even something such as tax breaks for home heating fuel.
According to Tagwerker, production subsidies are most common in wealthier, industrialized countries, while consumption subsidies are more common in developing countries with populations struggling to afford fossil fuels.
The $523 billion number above — standing as the bottom boundary of the range of global fossil fuel subsidies — represents only the consumption subsidies for coal, electricity, oil and, natural gas in 38 developing countries, as estimated by the International Energy Agency (IEA). It doesn’t include any production subsidies at all.
Production subsidies are often quoted at $100 billion a year, a number that comes from a June 2010 report to the G-20 leaders from the Organisation for Economic Co-operation and Development (OECD), the IEA, the World Bank, and the Organization of the Petroleum Exporting Countries (OPEC). But that doesn’t include so-called “support measures” like:
export credit agencies (estimated at $50-100 billion annually)
cost of securing fossil fuel shipping routes (estimated at $20-500 billion/year)
Then there’s the issue of externalities. Tagwerker argues that external costs — like those associated with resource scarcity, environmental degradation, and human health — should be considered in subsidy calculations, as their absence artificially lowers the true cost of fossil fuel energy.
“Without factoring in such considerations, renewable subsidies cost between 1.7¢ and 15¢ per kilowatt-hour (kWh), higher than the estimated 0.1–0.7¢ per kWh for fossil fuels,” writes Tagwerker. “If externalities were included, however, estimates indicate fossil fuels would cost 23.8¢ more per kWh, while renewables would cost around 0.5¢ more per kWh.”
A recent report by the International Monetary Fund (IMF) took a unique approach to subsidy calculations, lumping them into pre-tax and post-tax groupings rather than production and consumption.
The IMF then tacked on a modest $25-per-ton carbon tax to capture the external costs of climate pollution. After tallying up all the various subsidies, the IMF came up with a whopping $1.9 trillion every year, or roughly 2.5-percent of the global GDP in 2012.
Finally, Tagwerker considers the entire subsidy through the lens of climate pollution. “From an emissions perspective, 15 percent of global carbon dioxide emissions receive $110 per ton in support, while only 8 percent are subject to a carbon price, effectively nullifying carbon market contributions as a measure to reduce emissions.”
Image Credit: Subsidies via Shutterstock.
About the Author
DeSmog Blog The DeSmogBlog Project began in January 2006 and quickly became the world’s number one source for accurate, fact based information regarding global warming misinformation campaigns. TIME Magazine named DeSmogBlog in its “25 Best Blogs of 2011” list. Our articles and stories are routinely highlighted in the world’s most popular news outlets and blogs: New York Times DotEarth, Huffington Post, Daily Kos, ThinkProgress, and Treehugger, to name a few. DeSmogBlog has won the Canadian Public Relation Society’s Leadership in Communication award, and was voted Canada’s “Best Group Blog” by their peers.