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This blog is expressly directed to readers who do not have strong training or backgrounds in science, with the intent of helping them grasp the underpinnings of this important issue. I'm going to present an ongoing series of posts that will develop various aspects of the science of global warming, its causes and possible methods for minimizing its advance and overcoming at least partially its detrimental effects.

Each post will begin with a capsule summary. It will then proceed with captioned sections to amplify and justify the statements and conclusions of the summary. I'll present images and tables where helpful to develop a point, since "a picture is worth a thousand words".

Friday, August 5, 2011

Expanded Employment and Economic Activity from Renewable Energy

Summary.  Several economic analyses of the expanding role of renewable energy in the U. S. are described here.  A meta-analysis by Wei and coworkers finds that over 4 million full time equivalent job-years will accumulate between 2009 and 2030.  Past experience by California, extending from 1976, has already shown that major savings occur by energy efficiency measures that reduce consumption of electricity; redirecting these savings results in significant expansion of jobs related to renewable energy.  Although wind energy is currently only a small component of the overall energy mix, it has the potential, between land-based and offshore wind generation, of providing as much as 20% of America’s electricity by 2030 with attendant job creation.  Solar energy comprises an extended retail market as well as utility-scale generation.  Currently most employment in solar is retail.  Utility-scale generation and employment will grow significantly in coming decades.  The major conclusion drawn from these reports is that renewable energy provides significant and growing opportunities for employment, and for contributing to America’s economic activity.

Introduction.  Among developed, industrialized countries of the world, the United States is the only major emitter of greenhouse gases without a national policy that addresses the problems arising from burning fossil fuels.  In the absence of leadership at the federal level, various regional, and even local, programs have been put in place to lower emissions of greenhouse gases.  These include the Western Climate Initiative, the Midwest Greenhouse Gas Reduction Accord, and the New England and mid-Atlantic Regional Greenhouse Gas Initiative.  They mandate progressive reductions in emissions of greenhouse gases.  They encourage or rely on market-based (cap-and-trade) mechanisms for achieving the reductions.

This post summarizes reports on employment and economic impacts of developing renewable energy technologies without an emphasis on market mechanisms.

Overview of Employment in Green Jobs.  The Bureau of Labor Statistics has recently defined green jobs as
  • Jobs in businesses that produce goods or provide services that benefit the environment or conserve natural resources, or
  • Jobs in which workers’ duties involve making their establishment’s production processes more environmentally friendly or reducing natural resources use. 

In general, energy produced from renewable sources is considered green.  This includes electricity, heat or fuel, which could be derived from sources such as wind, biomass, geothermal heat content, solar, ocean kinetic energy, hydroelectric power, and landfill gas and municipal solid waste.

Green Jobs in the U. S. in 2011. The Environmental and Energy Study Institute issued the following collated data in June 2011 on jobs currently devoted to providing “green” energy, derived from various nonprofit and consulting organizations as sources.

See Wei, Patadia and Kammen below for definitions of direct, indirect and induced jobs.
Source: The Environmental and Energy Study Institute

The table shows that currently most employment originates in the mature sectors of hydropower and ethanol.  This post presents analyses showing that other sectors have vast potential to expand employment in future years.

Meta-Analysis of Job Creation by Renewable Energy.  Wei, Patadia and Kammen published a review estimating projected job growth due to renewable energy sources (Energy Policy, Vol. 38, pp. 919-931, Feb. 2010).  Accounting for ambitious goals in energy efficiency, and assuming a renewable portfolio standard (RPS; the portion of energy production derived from renewable sources) of 30% that is commonly proposed for 2030, they find that over 4 million full time equivalent job-years will accumulate over the interval beginning in 2009.  They report that all renewable energy technologies create more employment per unit of energy than found for coal and natural gas, the current fossil fuel sources for power generation. 

Details.  Wei and coworkers analyzed fifteen primary reports.  They devoted considerable effort to bring the varying definitions and approaches employed in the individual reports into a single unifying framework for analysis, arriving at projected job-years of effort per unit of energy produced averaged over an assumed lifetime of a particular generating technology.  Importantly, job losses from phased out fossil fuel generation were accounted for in their assessment. 

Jobs involved in construction, installation and manufacturing (prior to operation) and maintenance and operation (after placement into service) of renewable generating facilities were spread across the full predicted lifetime of a facility to arrive at lifetime average values for a given technology.  Both direct jobs (those involved in the functions just identified) and indirect jobs (such as preparing input materials and facilities service) were included.

Business-as-usual (BAU) assumes that no mitigation measures are being taken in future projections.  BAU involves an average annual projected increase in generation of electricity through 2030 of 0.74% (U. S. Energy Information Agency).  In their report, optimal job growth involves eliminating this annual increase, and a second model involves halving this rate of increase, in both cases through energy efficiency (EE) measures. In addition, mitigation involves modeling a 20%, a 30% and a 40% renewable portfolio standard.  The authors point out that they do not assume any fiscal or market-based measures, such as cap-and-trade, to achieve their results.

The graphic below shows the results, in cumulative annualized job-years, over the baseline given by BAU, from 2009 to 2030, for the cases of eliminating the  increase in electricity demand (Flat energy demand, gray line), or medium increase in electricity demand (Medium EE, black line). 
  Source: Wei, Patadia and Kammen;

The following graphic shows the cumulative result for job-years over BAU (not annualized; plotted along the y-axis) through 2030 for the three cases of 0% (BAU), 0.37% (medium EE case) and 0.74% (flat energy demand) per year reductions in electricity demand  from energy efficiency (plotted along the x-axis), for the four cases of 0% (BAU), 20%, 30% and 40% of total electricity provided by renewable energy (RPS).

The following graphic shows the cumulative result for job-years over BAU (not annualized; plotted along the y-axis) through 2030 for the three cases of 0% (BAU), 0.37% (medium EE case) and 0.74% (flat energy demand) per year reductions in electricity demand  from energy efficiency (plotted along the x-axis), for the four cases of 0% (BAU), 20%, 30% and 40% of total electricity provided by renewable energy (RPS).

The blue line for BAU shows new job creation due only to improved energy efficiency without any new renewable generation facilities.  In contrast, without any contributions from energy efficiency, the cumulative job-years increase due only to new renewable energy facilities (increasing RPS), is shown by the points lying on the y-axis.  The higher RPS assumptions have higher job-years created because they require installation of new renewable generation facilities.  The effects of EE and RPS are additive, as seen from the fact that the four lines are essentially parallel.

California’s Energy Efficiency Experience.  California has long been a pioneer in fostering energy efficiency and reduction of emission of greenhouse gases.  The state enacted a rigorous plan, the Global Warming Solutions Act (AB 32), to reduce emissions even further by 2050 into place (please see the earlier post on this blog).  In this environment, David Roland-Holst of the University of California, Berkeley issued a report, “Energy Efficiency, Innovation, and Job Creation in California” in October 2008.  It provides a detailed historical analysis of data between 1972 and 2006, garnered from the U.S. Bureau of Economic Analysis and other sources, illustrating the state’s remarkable success during that period in reducing demand for electric power.  The graphic below shows that the state’s aggregate energy intensity was 40% lower by 2006 than the U. S. mean, due to actions starting at about 1974.

Total per capita electricity use in California from 1960-2001.

The report transmits several conclusions.  As a result of savings from energy efficiency, Californians redirected their cash flow toward other goods and services; when the full extent of this transfer and distribution into the economy is considered (economic multiplier effect) about 1.5 million full time equivalent jobs were created, having a payroll of about US$45 billion, even when considering job losses in conventional energy generation businesses.  The analysis showed that this favorable result arose because households saved energy expenditures of US$56 billion from 1972-2006.  For every job lost in fossil fuel-driven generation, however, more than 50 new jobs were created throughout the broad economy.

At the time of writing of the report, detailed policies to implement the new Act had not yet been put in place.  The report’s economic analysis predicts that California will attain 100% of its goal of greenhouse gas emission reduction.  It anticipates that the Gross State Product (of total state-wide goods and services; GSP) will increase by about US$76 billion, increasing household incomes by up to US$48 billion, and generating about 403,000 jobs in efficiency and other fields related to climate action.  In general, AB 32 should promote a shift in work force from conventional energy industries to more job-intensive industries.

Wind Energy.  Land-based wind generation in the U.S. constitutes a small, but growing, proportion of the total electric energy landscape.  According to the U. S. Bureau of Labor Statistics (BLS), in the 10 years from 2000 to 2010, generating capacity has grown from less than 3,000 MW to 35,000 MW (please see Note 1 for definitions), with 10,010 MW put in service in 2010 alone.  35,000 MW of capacity generates enough power to supply about 9.7 million American homes.  As shown in the following graphic, wind power is expanding rapidly as a source of electricity in the U. S.


Nevertheless, in 2009 wind constituted only 1.8% of the total U. S. power generation but was about 50% of overall renewable power generated (not including nuclear energy).  As projected in the graphic, wind power could supply as much as 20% of all electricity generated in the U.S. by 2030. 

Wind farm sites, and sites of manufacturing facilities that make wind turbine components are locations at which employment in wind energy occurs.  In the map below, sites of wind farms in the U.S. are shown.  The great expansion in the rate of installing wind generation capacity may be seen by visually comparing those built up through 2008 (pink o) with those built in 2009 (red D).

The shading from dark to pale green shows exponentially decreasing installed wind generating capacity in the state, from a high of 8,500 MW to a low of 1 MW.
Source: U. S. Bureau of Labor Statistics:

The following graphic illustrates the dispersion across the U. S. of manufacturing facilities involved in fabricating one or another of the components that go into a wind farm project.

In this map of the U. S., the shapes describe the component being made: 4-pointed stars, nacelles and components; triangles, turbines; 5-pointed stars, turbine blades; squares, towers; and circles, other components.  The colors describe dates: RED , new facilities opened in 2009; ORANGE , newly branched into wind in 2009; LIGHT BLUE , new facilities announced in 2009; and GREEN, facilities online before 2009.
Source: U. S. Bureau of Labor Statistics:

According to the American Wind Energy Association as cited by the BLS, about 85,000 workers were employed in the wind industry, including related fields.  This number is a little larger than shown in the table above.  Judging by the expansion of wind energy as foreseen in the earlier graphic showing projected installed wind generating capacity in future years, the number of workers could expand by about 15-fold, to as high as 1,275,000 jobs, by 2030.

Offshore Wind Energy.  As shown in the earlier graphic, offshore wind generating capacity is foreseen to expand greatly in coming years. The National Renewable Energy Laboratory (NREL) has evaluated the potential for offshore wind energy.  A minimum criterion for effective wind generation of electricity is an average wind speed of 7 m/sec (16 mi/hr).   The map below shows average wind speeds over coastal and inland water, indicating that much of the accessible shoreline exceeds the minimum average wind speed.
Source: U. S. Department of Energy, Office of Energy Efficiency and Renewable Energy

The U.S. has no offshore wind generation installed at present, but 13 projects are approved and under development.  Essentially all existing offshore wind farms in the world are in shallow water, up to 30 m (98 ft.).  The west coast of the U. S. is not considered amenable for development because its depth in most locations exceeds 60 m.

The NREL report assesses that the U.S. has the potential shoreline to develop 1,071 GW (see Note 1) of generating capacity in this depth zone.  An analytical model in the report estimates that low-cost offshore wind capacity could add 54 GW to U. S. capacity.  In general, offshore wind could contribute significantly to achieving a contribution of 20% to total electric generation from wind energy by 2030, as shown in the earlier graphic.

Adding 54 GW of offshore wind to U. S. generating capacity by 2030 would create US$200 billion of new activity, including the creation of 43,000 new permanent direct jobs, or 20 direct jobs per MW capacity constructed.  Additional indirect jobs would extend from this activity, contributing further economic activity.

The report     “A National Offshore Wind Strategy: Creating an Offshore Wind Energy Industry in the United States”, issued by the U. S. Department of Energy, Office of Energy Efficiency and Renewable Energy, February 2011,  presents a detailed analysis of offshore wind energy development.  It estimates that by 2020, the cost of generation could be brought down to US$0.10/kWh by envisioning 10 GW of installed capacity, and by 2030, down to US$0.07/kWh envisioning 54 GW installed. 

Solar power covers a range of capacities and technologies.  Photovoltaic (PV) solar generates electricity directly from sunlight using semiconducting photo-active panels; most use silicon as the semiconductor.  Concentrating solar power (CSP), or thermal solar, uses mirrors to concentrate sunlight on to a fluid to heat it; the fluid then transfers heat to convert water to steam, which then runs a conventional turbine generator.

Solar power is a small but rapidly growing component of the renewable energy mix in the U. S.  Much capacity is found in residential and commercial scale installations.  In recent years utility-scale projects have been planned and installed using both PV and CSP technologies (see the previous post).

A census of the solar industry in the U. S. was conducted by the Solar Foundation in 2010.  It is intended to represent as comprehensively as possible all firms engaged in the industry.  As a result much of its data represents firms dealing at the retail level with residential, small business and commercial installations. 

The census found that as of August 2010:
  • There are 93,502 solar workers in the United States (defined as working at least half-time performing duties related to the solar industry), which was about double the number estimated for 2009.  They work across 16,703 employment locations.
  • Solar job growth over the following 12 months was predicted to be 26%, representing nearly 24,000 net new jobs.  This expansion is against a background of employment nationwide in the U. S. that, as of this writing, created only 0.2% job growth from June 2010 to June 2011.
  • Over half of all solar employers expected to increase their number of solar jobs in the following 12 months, while only 2% anticipated reducing solar staff.
  • Employers from all of the manufacturing, installation, wholesale and other subsectors expected significant employment growth over the following 12 months.
Energy Efficiency.  Energy efficiency relates to efforts to obtain more effective results from energy inputs.  These include
  • products, services, or methods that improve energy efficiency;
  • use of equipment, appliances, and vehicles that are energy-efficient;
  • improvements in the energy efficiency of buildings; and
  • improved energy storage and distribution (e.g. Smart Grid technologies, cogeneration—combined heat and power).
Two previous posts on this blog deal with energy efficiency (Energy Efficiency in Public Buildings and A U. S. National Academies Report)

Considering buildings, for example, it is estimated that efficiencies can improve the utilization of energy by up to 25%, and provide sufficient savings to yield full payback of efficiency investments in very short times.  The Environmental and Energy Study Institute has summarized employment groups that contribute to energy efficiency projects, below.
Source: The Environmental and Energy Study Institute
Conclusions.  The reports discussed here do not explicitly consider tax-based or market-driven charges for use of fossil fuels or for greenhouse gas emissions.  The economic benefits and expansion of job opportunities they present result from the beneficial effects of seeking energy efficiency and imposing renewable portfolio standards, for example.  Many of the results here reflect models that predict future benefits of expanding the role of renewable energy in the overall energy mix.
The case history for California, however, shows the benefits of past behavior, beginning in 1976.  According to Wikipedia, California’s GSP is 13.3% of that of the U. S.  If a program similar to the emission reductions required by California described above can validly be extrapolated to the U. S. as a whole, this suggests that nation-wide over 3 million jobs could be created.  U. S. national Gross Domestic Product could increase by US$571 billion.  New economic activity of this magnitude from this single sector of the economy indicates that implementation of renewable energy and energy efficiency policies would have significant positive impacts on the economy.

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Note 1.  A watt is a unit of power, quantifying the rate at which energy is provided or consumed.  It is a small unit. 

A kilowatt (1,000 watts, Kw) is a more manageable unit of power.  10 100-watt light bulbs represent 1 Kw; an electric toaster would be 1-2 Kw.

Generating capacity is the rate at which an installation provides power, such as in millions of watts (megawatts, MW) or billions of watts (gigawatts, GW).

Energy is a measure of total work done, given by power x time and for electricity is watt-hours.  Again this is usually given in terms of kilowatt-hours, KWh.  10 100 W light bulbs burning for 1 hour would use 1 KWh.

© 2011 Henry Auer


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