August 31, 2017 Read More →

Electricity-Sector Transition and Its Jobs Effects

Bloomberg New Energy Finance:

This shift in the political weather from trumpeting green jobs to chest-beating about brown jobs leads us onto something that deserves more attention than it has got so far. That is the wider effect on economies around the world of the transition to clean energy and transport.

In power generation, we are moving from centralized power stations burning raw materials extracted from below ground, to distributed units harnessing natural resources, and in transport, we are starting to move from the internal combustion engine based on liquid fuels, to electrified vehicles.

The outlook on employment is closely related to that for GDP and trade. In power generation, coal-firing worldwide ceases to grow according to our forecast, with increases in South Asia more than offset by declines in developed economies. This will mean a shrinkage in mining jobs in Europe and the U.S., and in countries that produce a lot of seaborne coal such as Australia.

In renewables, our projections for year-on-year additions suggest that employment in both wind turbine and solar panel manufacturing globally will continue to grow at least until the late 2030s, as capacity additions jump from a combined 636GW in the 2021-2015 period, to 2.2TW in 2036-2040.

There will also be increases in the number of people involved in constructing wind farms and utility-scale solar projects, again mainly in developing countries. As an indicator, Adani Power’s 648MW Kamuthi PV park in Tamil Nadu employed 8,500 workers for six months in the building phase in 2015-2016 – equivalent to 6.6 man-years per megawatt. The latter figure is roughly double what might be expected in developed economies. Even if productivity in construction improves, the solar (and wind) project build-out globally should keep many hundreds of thousands of hard hats busy through the 2030s.

And then there is small-scale solar system installation. This is a much more labor-intensive business than polysilicon, wafer, cell, module or inverter manufacturing, or indeed the building of big PV parks. Estimates are that 11-13 man-years are required to install 1MW of small-scale solar, although it does depend greatly on whether the systems are household rooftops of 3kW or so, or commercial-scale arrays of many tens of kilowatts. The majority of the new jobs will be in developing countries (since these are forecast to add more than 700GW of the 1.3TW of new small-scale PV installed worldwide between 2017 and 2040).

In the operating phase, there are many fewer jobs per MWh in wind and solar plants than there are in fossil-fuel generation. For instance, the giant 2GW, $4.5 billion onshore wind project in the Oklahoma Panhandle announced this summer by American Electric Power, is slated to create 4,000 jobs during the construction phase but only 80 during operation (a ratio of just 0.04 per MW). By comparison, AEP’s 600MW John W Turk Jr coal-fired power station in Arkansas employs 109 people directly, plus those in the coal mining and transport chain, to produce about half, at most, of the electricity that is due to come from the Oklahoma wind complex.

More: How Economies May Flex to Transition in Energy, Transport

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