Job creation during the global energy transition towards 100% renewable power system by 2050
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This is a version of a publication in Please cite the publication as follows: DOI: Copyright of the original publication: This is a parallel published version of an original publication. This version can differ from the original published article. published by Job creation during the global energy transition towards 100% renewable power system by 2050 Ram Manish, Aghahosseini Arman, Breyer Christian Ram, M., Aghahosseini, A., Breyer, C. (2019). Job creation during the global energy transition towards 100% renewable power system by 2050. Technological Forecasting and Social Change. DOI: 10.1016/j.techfore.2019.06.008 Author's accepted manuscript (AAM) Elsevier Technological Forecasting and Social Change 10.1016/j.techfore.2019.06.008 © 2019 Elsevier Inc.
Title: Job creation during the global energy transition towards 100% renewable power system by 2050 Authors: Manish Ram*, Arman Aghahosseini, Christian Breyer LUT University, Yliopistonkatu 34, 53850 Lappeenranta, Finland *Corresponding Author. Full name: Manish Ram Affiliation: LUT University, Yliopistonkatu 34, 53850 Lappeenranta, Finland Tel (Mobile): +358 40 8171944 Fax: +358 5 621 2350 E-mail address: manish.ra[email protected] Second Author: Full name: Arman Aghahosseini Affiliation: LUT University, Ylipistonkatu 34, 53850 Lappeenranta, Finland Tel: +358 294 462 111 Fax: +358 5 621 2350 Email: arman.aghahos[email protected] Third (Last) Author: Full name: Christian Breyer Affiliation: LUT University, Yliopistonkatu 34, 53850 Lappeenranta, Finland Tel: +358 294 462 111 Fax: +358 5 621 2350 Email: [email protected]
Job creation during the global energy transition towards 100% renewable power system by 2050 Manish Ram*, Arman Aghahosseini, Christian Breyer LUT University, Yliopistonkatu 34, 53850 Lappeenranta, Finland *Corresponding Author. E-mail address: [email protected] Abstract Aside from reducing the energy sector’s negative impacts on the environment, renewable power generation technologies are creating new wealth and becoming important job creators for the 21st century. Employment creation over the duration of the global energy transition is an important aspect to explore, which could have policy ramifications around the world. This research focuses on the employment impact of an accelerated uptake of renewable electricity generation that sees the world derive 100% of its electricity from renewable sources by 2050, in order to meet the goals set by the Paris Agreement. An analytical job creation assessment for the global power sector from 2015 to 2050 is estimated and presented on a regional basis. It is found that the global direct jobs associated with the electricity sector increases from about 21 million in 2015 to nearly 35 million in 2050. Solar PV, batteries and wind power are the major job creating technologies during the energy transition from 2015 to 2050. This is the first global study presenting job creation projections for energy storage. The results indicate that a global energy transition will have an overall positive impact on the future stability and growth of economies around the world. Keywords Jobs, Employment, Renewable Energy, Energy Storage, Energy Transition Abbreviations A-CAES Adiabatic Compressed Air Energy Storage BNEF Bloomberg New Energy Finance BPS Best Policies Scenario CAPEX Capital Expenditures CCGT Combined Cycle Gas Turbine CPS Current Policies Scenario CSP Concentrated Solar Thermal Power EU European Union FLH Full Load Hours GDP Gross Domestic Product GHG Greenhouse Gases GW Gigawatt IEA International Energy Agency IMF International Monetary Fund IPCC International Panel on Climate Change ILO International Labour Organization IRENA International Renewable Energy Agency LCOE Levelised Cost of Electricity MW Megawatt
OCGT Open Cycle Gas Turbine OPEX Operational Expenditures PtG Power-to-Gas PtH Power-to-Heat PV Photovoltaics TW Terawatt USD United States Dollar 1. Introduction The risks and impacts posed by devastating socioeconomic consequences of climate inaction have been conspicuously stressed in the International Panel on Climate Change (IPCC) 4th and 5th assessment reports (IPCC, 2007, 2014a) as well as the Stern review (Stern, 2007). In this regard, the Paris Agreement, negotiated at the 21st Conference of the Parties (COP21) in 2015 (UNFCCC, 2015), has set an important foundation on which the global community can build a sustainable future. With electricity generation accounting for around 25% of global greenhouse gas (GHG) emissions, reducing emissions in this sector is a critical component in the transition towards a low carbon development pathway (IPCC, 2014b). A global energy transition is well underway with nearly 160 GW of renewables (without considering large hydropower) been added in 2017, of which 98 GW was solar and 53 GW wind power (Frankfurt School - UNEP & BNEF, 2018; GWEC, 2018). In addition, tumbling technology costs have propelled investments in renewable energy power generation and from a levelised cost of energy (LCOE) outlook, renewables have become a more attractive investment proposition than fossil fuels in many countries around the world (Ram et al., 2017a; Ram et al., 2018). The effects of the new energy system would not be restricted to energy production only, but would have consequences for the whole society (Breyer, etal., 2017a). Energy use is either the cause or the facilitator of economic growth. Moreover, sufficient evidence over the years point to the positive correlation between energy use, economic growth and employment (CDC & ODI, 2016). As the global energy system is a major economic sector with a share of around 8% in global gross domestic product (GDP) (IER, 2010), the prospects for investment and employment in the sector are significant to economies around the world. The physical implications of a shift towards greater shares of renewable electricity such as additional generation capacities, investment needs and reduction in GHG emissions have been explored for a range of scenarios in many countries as well as globally, as enlisted and analysed in Child et al. (2018). However, employment associated with the electricity sector and the impact of an accelerated uptake of renewables on employment creation in the sector, has received relatively lesser attention. A review was performed by Sheikh et al. (2016) to determine the criteria that are elements of the social and political perspectives, which found that renewable energy has the potential to play a significant role in fulfilling the employment criterion. As in other economic and technological shifts, transitioning to a low carbon economy will result in additional jobs being created, jobs being substituted, jobs being eliminated and existing jobs being transformed (UNEP, 2008). Combining different methods, as proposed by Fortes et al. (2015), is a way to advance scenario building by integrating different collective thinking and other socioeconomic parameters. As the energy sector increasingly moves hand in hand with economic development, social priorities and environmental needs, an integration of social processes with technical and economic analyses of energy systems is therefore a necessity. In purview, this research evaluates the hypothesis of sound economic
impacts from transitioning to a sustainable economy by determining the employment effects of achieving 100% renewable power supply by 2050, across the world structured into 9 major regions. The world is categorised into Europe, Eurasia, Middle East and North Africa (MENA), Sub-Saharan Africa, South Asian Association for Regional Cooperation (SAARC), Northeast Asia, Southeast Asia, North America and South America. The transition of power sectors across these regions, as showcased in Breyer et al. (2017b) and Ram et al. (2017a), serves as the basis for estimating jobs created during the transition period from 2015 to 2050. Additionally, job creation potential is estimated on a technology-wise basis as well as on a categorywise basis during the energy transition to provide better insights on the types of jobs created. Moreover, this research is the first to estimate potential job creation by the various storage technologies during the energy transition on a global basis. This is primarily due to the innovative aspects of the LUT Energy System Transition modelling tool (Breyer et al., 2017b; Ram et al., 2017a), which analyses power systems across the world on an hourly basis enabling detailed analyses of storage requirements. Further, this research presents an overview of existing literature in section 2. The detailed methods, various assumptions and other relevant material in estimating job creation during the energy transition are highlighted in section 3. The following section 4 presents the results on a regional basis and displays the jobs created on a technology basis as well as on a category basis. In addition, section 5 discusses the results from a global perspective and draws a few comparisons to other such studies. Finally, section 6 draws conclusions and possible implications of the results. 2. Literature Review In recent years, the job creation potential of renewable energy technologies in the context of the energy transition has received attention from some of the stakeholders including academia, government agencies, private sector and the civil society (Child et al., 2018). The International Renewable Energy Agency (IRENA) has estimated jobs associated with renewable energy to rise to around 16.7 million by 2030 (IRENA, 2013) and their annual review of global employment related to renewable energy shows that 10.3 million people were employed in 2017 (IRENA, 2018). Jacobson et al. (2014) estimated jobs created and jobs lost for a long-term sustainable energy infrastructure that supplies 100% of energy in all sectors (electricity, transportation, heating/cooling, and industry) from wind, water, and solar power (without fossil fuels, biofuels, or nuclear power) for the state of California and found that it will create a net of 220,000 40-year construction plus operation jobs (442,200 new 40-yr construction jobs and 190,600 new 40-yr operation jobs, less 413,000 jobs lost in current California fossiland nuclear-based industries). Further, Jacobson et al. (2017) estimate that their main scenario by 2050 (that is electricity generation with 100% wind, water, and solar power for all energy sectors) would create a net of 24.3 million permanent, full-time jobs across 139 countries of the world. This estimate includes creation of 52 million new ongoing jobs for 100% renewable electricity generation and transmission supplying for highly electrified energy sectors (including power, heat and transport) up to 2050, while 27.7 million jobs are lost in the current fossil fuel, biofuel, and nuclear industries (Jacobson et al., 2017). Various editions of the Energy [R]evolution, published since 2007, project probable employment outcomes across a broad range of scenarios (Greenpeace International, 2015). The latest edition offers a global estimate for energy sector employment to be 46.1 million by 2030 for the Advanced Energy [R]evolution scenario. Nevertheless, there are studies that have estimated the impact of renewable energy development on job creation to be negative, resulting in job losses. Almutairi et al. (2018) show a loss of 4.45 million jobs worldwide up to 2030 in the Renewable and Nuclear Energy (RNE) scenario (based on the predictions of the international energy outlook) compared to the business as usual (BAU) scenario. This study (Almutairi et al., 2018) has made an effort
to estimate both the direct and indirect jobs associated with the different energy scenarios by assessing the overall impacts on the gross domestic product (GDP) of different countries. However, Markandya et al. (2016) found the net employment impacts from the transformation of the European Union energy sector in the period 1995–2009, when the European Union’s energy structure went through a significant shift, away from the more carbon intensive sources, towards gas and renewables to be positive. Moreover, the research estimated the net employment generated from this structural change at 530,000 jobs in the European Union and further analysis showed that the change in the input structure of the European electricity and gas supply sector, motivated significantly by the desire to shift towards a green economy, had a net positive impact on employment (Markandya et al., 2016). Whereas, Böhringer et al. (2013) suggest with a computable general equilibrium analysis of subsidised electricity production from renewable energy sources (RES-E) in Germany that the prospects for employment and welfare gains are quite limited and hinge crucially on the level of the subsidy rate and the financing mechanism. To the contrary, by linking investments in energy sector and jobs created, Garrett-Peltier (2017) finds that on average, 2.65 full-time equivalent (FTE) jobs are created from 1 million USD spending in fossil fuels, while that same amount of spending would create 7.49 or 7.72 FTE jobs in renewables or energy efficiency. It is further concluded that each 1 million USD shifted from brown (includes fossil fuels and nuclear) to green energy will create a net increase of 5 jobs (Garrett-Peltier, 2017). The results of these studies are difficult, if not impossible to compare due to their differing assumptions and modelling approaches. However, one recurring theme seems to be the positive contribution of high shares of renewable energy uptake to the labour market thereby generating ample employment. Employment trends vary significantly across the different energy generation technologies. There are a number of identifiable methods that have been used to quantify employment impacts of the changing energy sector and have been well documented in literature review studies, such as Breitschopf et al. (2011), Cameron and Zwaan (2015) and Meyer and Sommer (2014). However, in general, the various methods applied can be categorised into bottom-up and top-down approaches, or more specifically as using the analytical or input–output (IO) models (World Bank, 2011). Additionally, Llera et al. (2013) and Hondo and Moriizumi (2017), highlight a value-chain approach and a life-cycle approach respectively, for estimating job creation mainly from renewable energy deployment. Furthermore, the various studies consider different types of jobs associated with the energy industry; the common adopted classification is ‘direct’, ‘indirect’ and ‘induced’ jobs. IRENA (2011) elaborates a clear and operational definition of these terms, as well as their interpretation across studies. Lambert and Silva (2012) find that analytical studies using extensive surveys are found to be more appropriate for regional studies, while input–output methods are better suited to national and international studies. In Jacobson et al. (2014; 2017), estimates of baseline jobs per unit energy in their main scenario are based on National Renewable Energy Laboratory’s (NREL) Jobs and Economic Development Impacts (JEDI) models (NREL, 2013). These are economic IO models with several assumptions and uncertainties. In contrast, IRENA (2013) and Greenpeace International (2015) adopt simpler analytical approaches to estimating job impacts that also have a high level of transparency. This entails utilising job intensities or employment factors (EF), defined as the number of jobs derived from a certain energy technology capacity addition or investment. The EF approach utilised for estimates of job creation potential in Greenpeace’s energy scenarios is documented by Rutovitz and Atherton (2009), an improved version is presented in Rutovitz and Harris (2012) and the latest version in Rutovitz et al. (2015). This research is an effort to further refine the methods and conduct a more comprehensive analysis of the net jobs created during an
energy transition, which includes a broad range of technologies and is the first to estimate job creation potential of the complementary storage technologies. The research has also included estimates of decommissioning jobs across the various power generation technologies created during the energy transition up to 2050. 3. Methods and Materials For this research, an analytical approach towards estimating jobs in an energy transition scenario was adopted. Moreover, the methods were based on the approach highlighted in Rutovitz et al. (2015) and further modified and improved for better results as well as applied to a broader range of technologies. 3.1 The Employment Factor approach Jobs generated during the global energy transition from 2015 to 2050 are estimated utilising the EF approach, adopted from Rutovitz et al. (2015). The EF method was utilised amongst the other methods (Breitschopf et al., 2011), due to its simplicity and effectiveness in estimating direct employment associated with energy generation, storage and transmission. One of the main advantages of the EF approach is that, it can be modified for specific contexts, as well as applied over a range of energy scenarios. The Figure 1 gives an overview of the methods utilised to estimate jobs created during the energy transition from 2015 to 2050 across the different regions.
Figure 1: Method for estimation of job creation during the energy transition. Abbreviations: Employment Factor (EF), Capital Expenditure (CAPEX) and Operational Expenditure (OPEX). In the context of this research, the total direct jobs are a sum of jobs in manufacturing, construction and installation, operations and maintenance, fuel supply associated with electricity generation, decommissioning of power plants at the end of their lifetimes and transmission. The category of jobs are as follows, Manufacturing Jobs – encompasses the number of jobs necessary to manufacture a unit of power generation capacity. Manufacturing of equipment and components for a power plant project may require several weeks, months or at most a few years’ worth of work. As such, they represent relatively temporary employment in comparison to the entire plant lifetime. Hence, they are expressed as job-years, or the total number of full-time jobs needed for manufacturing over the plant’s lifetime (IRENA, 2013). Additionally, the manufacturing of equipment and components for power plants may occur outside the country where the power generation capacity is being installed. Many countries rely on importing, especially renewable energy technologies, as the domestic production is insufficient or non-existent yet. On the other hand, countries that export renewable energy equipment and components can generate employment, which is additional to that relating
to their domestic energy capacity addition by producing for export markets (IRENA, 2013). To account for the degree of import dependence, the local manufacturing factor is considered which is further highlighted below. Construction and Installation Jobs – includes all the jobs associated with constructing and installing a unit of power generation capacity. It is assumed that a local workforce will undertake the installation and construction of all energy projects, as is in most cases. Similar to manufacturing, these are expressed as job-years, or the total number of full-time jobs needed for construction and installation over the plant’s lifetime. These jobs are predominantly in the beginning phase of a power plant (that is in the first few years) and last during the period in which the power plants are built until the first operation. In this case, the construction and installation jobs are annualised over the construction period of a power plant, which is the time required for construction and installation of unit power plant capacities (in terms of per MW). The construction times for all technologies in years can be found in the Supplementary Material. Operation and Maintenance Jobs – comprises all the jobs associated with operating and maintaining the operational condition of a power plant over its technical operational lifetime. As power plants are usually designed to run for decades, operation and maintenance jobs last for a relatively longer duration and therefore interpreted as jobs per capacity of power generation. These jobs are considered for the lifetime of the respective power plants and are further annualised to get total number of jobs during the transition period. As and when power plants are decommissioned and new power plants replace the capacity, the O&M jobs continue to exist. A learning factor, which is correlated to the productivity increase in operational expenditures (Opex), is adopted to reflect the decline in O&M jobs as technologies and operational processes further mature. Fuel Jobs – includes all the jobs associated with fuel supply to power plants (nuclear, fossil and bioenergy). These are expressed as jobs per unit of primary energy, factoring the different rates of fuel consumption for power plants corresponding to the fuel utilised based on conversion efficiencies during the transition period. Decommissioning Jobs – consists of all jobs associated with the decommissioning of installed power plants at the end of their operational lifetimes, especially if plants are repowered or if certain elements are recycled or reused. These jobs are comparable to construction and installation jobs and are expressed as job-years, or the total number of full-time jobs needed for decommissioning over the plant’s lifetime. These jobs are further annualised during the transition period to derive the total number of jobs created. Transmission Jobs – includes all the jobs associated with power transmission activities. In context to this research, transmission jobs are expressed in terms of investments made in transmission infrastructure, i.e. jobs per unit investments (in billion euros). As the LUT Energy System Transition modelling tool considers only key transmission infrastructure required, the full extent of jobs associated with transmission infrastructure is not reflected in this research. The jobs from transmission infrastructure will be a lot higher when more accurate transmission data is considered. Jobs Loss: The jobs lost in fossil fuel and nuclear power plants are corresponding to the decommissioned capacities of conventional power plants during the transition period. As renewables are mostly installed beyond 2020, jobs do not arise in conventional power plants and these plants are decommissioned at the end of their technical lifetimes, which creates additional decommissioning jobs.
Figure 4: Jobs created by the various power generation and storage technologies (left) and jobs created based on different categories with the development of electricity demand specific jobs (right) during the energy transition from 2015 to 2050 in Eurasia. The category-wise distribution of jobs for Eurasia during the transition period is as depicted in Figure 4. Local manufacturing, construction and installation of renewable energy technologies create a significant share of jobs enabling the rapid build-up of capacities in the period 2020-2025 (508 thousand jobs), this is also due to the fact that most conventional power plants in this region are quite old and nearing their end of lifetimes that have to be replaced (Farfan and Breyer, 2017). This could serve as a co-benefit of the energy transition for countries across Eurasia. Beyond 2030, there are stable number of jobs created in these sectors up to 2050 with around 407 thousand jobs. Fuel jobs after an initial increase in 2020 (40% of total jobs),decline through the transition period as capacities of conventional power plants are replaced by renewables until 2030 and further decline up to 2050 reaching just about 2% of total jobs. On the contrary, operation and maintenance jobs continue to grow through the transition period and become the major job creating segment by 2050, with 51% of total jobs. As operation and maintenance jobs last through the lifetime of power plants, they offer relatively stable long-term job prospects. As indicated in Figure 4, the electricity demand specific jobs was at 516 jobs/TWhel in 2015 and increases to 859 jobs/TWhel in 2025 with the rapid ramp up in renewable energy installations. Beyond 2025, it declines steadily to 638 jobs/TWhel by 2050. 4.3 MENA MENA is comprised of countries that are emerging economies as well as developed, with around 7% share in global GDP (IMF, 2017). This region is amongst the largest energy producers in the world, with an increasingly high share of demand (Aghahosseini et al., 2016). The total electricity consumption was around 1360 TWh in 2015, which is estimated to rise to 3320 TWh by 2050 (IEA, 2016). This region has immense solar resources, which can be harnessed to meet this growing demand. With record low auctions for solar power across the MENA region, solar PV has emerged as the most attractive source of electricity generation (Dipaola, 2017). Both utility-scale and rooftop PV are seen to develop through the transition period to be the dominant source for power generation by 2050 (MEED, 2017; Ram et al., 2017a). Similarly, solar PV is the prime job creator through the transition period with almost a million jobs by 2050, as indicated in Figure 5. Wind power generation creates a fair share of jobs during the period of 2020 to 2030 (260 thousand jobs in 2030), beyond which the shares are reduced, as PV becomes more cost competitive. Storage technologies in the form of batteries take off from 2030 onwards and lead to a decent share of jobs created up to 2050 (193 thousand jobs in the battery sector). The
total number of direct energy jobs across the MENA region are observed to increase from just around 590 thousand in 2015 to nearly 1.7 million by 2050. Figure 5: Jobs created by the various power generation and storage technologies (left) and jobs created based on different categories with the development of electricity demand specific jobs (right) during the energy transition from 2015 to 2050 in the MENA region. Figure 5, also indicates the distribution of jobs across the different categories during the transition period in the MENA region. With rapid installation of capacities up to 2035, bulk of the jobs are created in the construction and installation of power generation technologies. Manufacturing jobs have a relatively lower share in the initial periods up to 2020 as the share of imports is high. From 2025onwards, as domestic production capabilities build up, a higher share of manufacturing jobs are observed until 2050 with 15% of total jobs. The share of fuel related jobs continues to diminish from 2020 onwards through the transition period reaching just 1% of total jobs by 2050, as conventional power plants are replaced by renewable and storage technologies. Whereas, the share of operation and maintenance jobs grows through the transition period up to 53% of total jobs by 2050. This means more stable jobs for a region suffering from high unemployment amongst the youth and a growing number of economic migrants. A higher share of investments in developing sustainable power infrastructure could be the right catalyst to create long-term jobs in this region (Ianchovichina et al., 2013). The electricity demand specific jobs increases from 435 jobs/TWhel in 2015 to 788 jobs/TWhel in 2025 with the rapid ramp up in renewable energy installations. Beyond 2025, it declines steadily to around 509 jobs/TWhel by 2050, as shown in Figure 5. 4.4 Sub-Saharan Africa Sub-Saharan Africa is a region with a large number of emerging economies, with just around a 3% share in global GDP (IMF, 2017), but is poised to be one of the fastest growing regions in the world. With rapidly growing population, unprecedented economic progress and need for reliable, modern energy access, the total electricity consumption that is around 484 TWh in 2015, is estimated to rise to 2747 TWh by 2050 (IEA, 2016). The renewable energy sector is growing in Sub-Saharan Africa, with 14 countries having set themselves targets and doubling investments to above 5 billion USD, between 2014 and 2015 (BNEF, 2017). Countries such as South Africa, Kenya, Ethiopia and Rwanda have accelerated their renewable energy adoption and are leading the energy transition across Sub-Saharan Africa (BonelliErede, 2017). As this trend is observed to pick up across the region during the transition period with solar PV emerging as the dominant source of power generation by 2050 (Barasa et al., 2018; Ram et al., 2017a). Likewise, solar PV is observed to be the prime job creator through the transition period, with 65% of the total jobs created by
2050, as depicted in Figure 6. A fair share of jobs are created by wind power (283 thousand jobs in 2025) and bioenergy (377 thousand jobs in 2025) initially, which tend to stabilise later on, as solar PV is far more cost competitive beyond 2030. Jobs created by storage technologies mainly driven by batteries, increase in share beyond 2030 and continue to grow up to 2050 (862 thousand jobs in the battery sector). While, jobs associated with fossil fuels, mainly coal and gas power generation, rapidly diminish across the region. Overall, the number of direct energy jobs are seen to grow massively from just under 1.2 million in 2015 to nearly 5.5 million by 2050. Figure 6: Jobs created by the various power generation and storage technologies (left) and jobs created based on different categories with the development of electricity demand specific jobs (right) during the energy transition from 2015 to 2050 in Sub-Saharan Africa. Figure 6, also indicates the distribution of jobs across the different categories during the transition period across Sub-Saharan Africa. With ramp up of installations up to 2035, bulk of the jobs are created in the construction and installation of power generation technologies. Manufacturing jobs have a relatively lower share in the initial periods up to 2020, as the share of imports is high. From 2025 onwards, as domestic production capabilities build up, a higher share of manufacturing jobs are observed until 2050 with 19% of total jobs. The share of fuel related jobs continues to diminish through the transition period from 63% of total jobs in 2015 to just 3% of total jobs by 2050, as conventional power plants are replaced by renewable and storage technologies. Whereas, the share of operation and maintenance jobs grow through the transition period reaching 42% of total jobs by 2050. This could be the boost required for employment prospects in Sub-Saharan Africa, which are presently stagnating due to low productivity attributed to the region’s lack of economic diversification (Brookings, 2017). The electricity demand specific jobs increase from 2399 jobs/TWhel in 2015 to 3235 jobs/TWhel in 2025 with the rapid ramp up in renewable energy installations. Beyond 2025, it declines steadily to around 1990 jobs/TWhel by 2050, as shown in Figure 6. The electricity demand specific jobs are the highest in comparison to all other regions across the world as Sub-Saharan Africa continues to have a high labour intensity through the transition period (the labour intensity factors can be referred to in the Supplementary Material). 4.5 SAARC SAARC consists of some of the most fast-paced growing economies, with around 9% share of global GDP and 21% of the global population (IMF, 2017). With rapidly growing population, unprecedented economic progress and need for reliable modern energy services, the total electricity consumption that is around 1694 TWh in 2015, is estimated to rise to 6979 TWh by 2050 (IEA, 2016; Gulagi et al., 2018). The region lead by India with around 50 GW of solar and wind power capacity has recently witnessed an increasing shift
towards renewable energy (Buckley and Shah, 2018). Driven by policy initiatives and the tremendous drop in costs have made wind and solar PV the most attractive propositions for power generation. In the last 2 quarters of 2017, only renewable energy capacities were added in the Indian power sector (Saurabh, 2018) and Sri Lanka has already made plans to generate 100% of their power from renewable energy sources (ADB & UNDP, 2017). This trend is set to continue with solar PV complemented by batteries to dominate the power share by 2050. Similarly, solar PV (4.18 million jobs) and battery storage (894 thousand jobs) sectors emerge as the major job creators across the region by 2050 as shown in Figure 7. Wind power (504 thousand in 2030), hydropower (297 thousand jobs in 2020) and bioenergy (523 thousand jobs in 2025) create a fair share of the jobs in the initial periods of the transition. Beyond 2030, the shares decrease and stabilise until 2050. The storage sector led by batteries create a fair share of the jobs in 2030 with 23% of total jobs and continue to contribute until 2050 with a steady share. Whereas, the jobs associated primarily with coal and gas power generation diminish rapidly. The total number of direct energy jobs increase rapidly from over 4.2 million in 2015 to just over 7 million by 2030, thereafter stabilising around 5.8 million by 2050. This drop is primarily due to the rapid ramping up of power capacity installations to ensure energy access for the vast number of un-electrified people in this region up to 2030. Beyond that, capacity addition would be at a slower rate to fulfil economic development. Figure 7: Jobs created by the various power generation and storage technologies (left) and jobs created based on different categories with the development of electricity demand specific jobs (right) during the energy transition from 2015 to 2050 in the SAARC region. The category-wise distribution of jobs created in the SAARC region through the transition period is shown in Figure 7. With a rapid ramp up of installations up to 2030, bulk of the jobs are created in the construction and installation of power generation technologies with 40% of total jobs in 2030. While, manufacturing jobs increase in share during 2020 to 2030, with some shares of exports (domestic manufacturing creates 25% and exports creates 2% of total jobs in 2030). The SAARC region is an importer as well as an exporter of power generation technologies (the shares of import and export can be referred to Table A3 in the Appendix). Beyond 2030, as production capabilities in other importing regions build up, a relatively lower share of manufacturing jobs are observed until 2050 (around 18% of total jobs). The share of fuel related jobs continues to diminish through the transition period, as conventional power plants are replaced by renewable and storage technologies (from 49% of total jobs in 2015 to just 1% of total jobs by 2050). Whereas, the share of operation and maintenance jobs continues to grow through the transition period with 48% of total jobs by 2050. The electricity demand specific jobs decrease steadily from 2508 jobs/TWhel in 2015 to 2335 jobs/TWhel in 2030 with the rapid ramp up in renewable energy installations. Beyond 2030, it declines rapidly to around 834 jobs/TWhel by 2050, as shown in Figure 7. The electricity demand specific
jobs have a rapid decline as most countries of SAARC have rapidly growing economies, which are expected to witness better economic conditions beyond 2030. Further improving up to 2050, resulting in a declining labour intensity through the transition period (the labour intensity factors can be referred to in the Supplementary Material). 4.6 Northeast Asia The Northeast Asian region is comprised of the fastest growing economies, with around a 25% share of the global GDP and 22% of the global population (Haysom et al., 2015). With rapid industrialisation, unprecedented economic progress and a soaring appetite for energy, the total electricity consumption that is around 6847 TWh in 2015, is estimated to soar up to 15,078 TWh by 2050 (IEA, 2016; Bogdanov and Breyer, 2016). Renewable energy is high on the agenda for countries across Northeast Asia, with excellent wind and solar resources particularly in Mongolia (Breyer et al., 2015). China has been leading not only in the region, but also globally with a cumulative solar PV capacity of around 130 GW and 163 GW of wind by the end of 2017 (Frankfurt School - UNEP & BNEF, 2018). Additionally, Japan and South Korea have developed plans to increase the share of renewables in their respective power mixes (BNEF, 2017). Renewable energy capacities are observed to increase rapidly in the next couple of decades across the region (Ram et al., 2017a). Likewise, jobs are created from mainly wind (2 million jobs in 2025) and solar PV (3.5 million jobs in 2025) in the early stages of the transition. From 2030 onwards, solar PV is observed to be the main source of power generation and correspondingly creating the most number of jobs (6.7 million jobs by 2050) as indicated in Figure 8. Storage technologies led by batteries are observed to create a fair share of jobs from 2030 onwards and continue unto 2050 with 1.3 million jobs in the battery sector. Whereas, jobs associated with the coal sector are seen to decrease rapidly. The total direct jobs are seen to increase from around 8 million in 2015 to 9.5 million by 2030 and after a decline, number of jobs rises back to around 10 million by 2050. Primarily with the replacements of power plants beginning to increase in the period from 2045 to 2050. Figure 8: Jobs created by the various power generation and storage technologies (left) and jobs created based on different categories with the development of electricity demand specific jobs (right) during the energy transition from 2015 to 2050 in Northeast Asia. The distribution of jobs according to the different categories during the transition period across Northeast Asia is shown in Figure 8. With a ramp up of installations until 2030, bulk of the jobs are created in the construction and installation of power generation technologies (39% of total jobs in 2030). Manufacturing jobs have a higher share in the initial periods up to 2030, beyond which the shares stabilise up to 2050. The Northeast Asian region contributes a major share of the global exports to all other regions (refer to Table
A3 in the Appendix). However, the share of jobs created by exports reduce beyond 2030, as other regions are expected to increase their domestic production capabilities (exports creating just 36 thousand jobs by 2050). The share of fuel related jobs continue to diminish through the transition period from 43% of total jobs in 2015 to just 1% of total jobs by 2050, as conventional power plants are replaced by renewable and storage technologies. Whereas, the share of operation and maintenance jobs grows through the transition period from 13% of total jobs in 2015 to 48% of total jobs in 2050. Additionally, decommissioning jobs that include replacement of end of life power plants begin to create some jobs by 2050 (293 thousand jobs). The electricity demand specific jobs is reduced from 1187 jobs/TWhel in 2015 to 675 jobs/TWhel by 2050, as shown in Figure 8. This is primarily due to the rising economic growth of the region forecasted for the future, resulting in much lower labour intensity by 2050. 4.7 Southeast Asia The Southeast Asian region including Australia, New Zealand and the Pacific Islands is comprised of rapidly growing economies, with around 7% share of global GDP (IMF, 2017). With rapid economic growth in most of these countries, the need for energy is ever increasing and some of the more developed countries have a high rate of consumption to sustain. In this context, the total electricity consumption that is around 1208 TWh in 2015, is estimated to soar up to 4222 TWh by 2050 (IEA, 2016; Gulagi et al., 2017). Renewables have grown rapidly as a power source across Southeast Asia, with their installed capacity at around 15 GW in 2016 (IRENA, 2018). By the end of 2017, cumulative installed capacity for solar PV in Australia was around 6.4 GW with close to 1.8 million rooftop installations (AEC, 2018).Whereas, New Zealand aims to produce 90% of their electricity from renewable sources by 2025 (Electricity Authority, 2016; Ford et al., 2017). With the trend across the region indicating a shift towards renewable energy, it can be observed that solar PV along with battery storage emerge as the primary power source by 2050 (Gulagi et al., 2017; Ram et al., 2017a). Likewise, solar PV and battery storage sectors create the major share of jobs through the transition period as shown in Figure 9. Biomass and hydropower create a higher share in the initial periods up to 2025, but continue to create some jobs through the transition period. Wind power sector creates some jobs during 2020 to 2030 (96 thousand jobs in 2025), beyond which fewer jobs are created as solar PV becomes more cost effective and installations increase in share with 2.1 million jobs by 2050. The storage sector led by batteries create a fair share of the jobs from 2030 onwards and continues through to 2050 with 414 thousand jobs in the battery sector by 2050. This could happen lot earlier as countries such as Australia are already witnessing both utility-scale as well as prosumer scale battery installations (AEC, 2018). Jobs associated with coal and gas power generation are seen to decline rapidly. The total number of direct energy jobs increases significantly from around 1.2 million in 2015 to over 3.3 million in 2030, beyond which there is a decline to under 2.5 million by 2040, after which there is a steady increase up to around 3.2 million by 2050.
Figure 9: Jobs created by the various power generation and storage technologies (left) and jobs created based on different categories with the development of electricity demand specific jobs (right) during the energy transition from 2015 to 2050 in Southeast Asia. A category-wise distribution of jobs in the region through the transition period is shown in Figure 9. With rapid installation of capacities up to 2030, bulk of the jobs are created in the construction and installation of power generation technologies with 42% of total jobs by 2030. Manufacturing jobs have a relatively lower share in the initial periods up to 2020 as the share of imports is relatively high. Beyond 2025 as domestic production capabilities build up, a high share of manufacturing jobs are observed until 2050 (from 21% of total jobs in 2035 to 17% of total jobs by 2050). The share of fuel related jobs continues to diminish from 2020 onwards through the transition period reaching just 2% of total jobs by 2050, as conventional power plants are replaced by renewable and storage technologies. Whereas, the share of operation and maintenance jobs continues to grow through the transition period with 49% of total jobs by 2050. The electricity demand specific jobs increases from 997 jobs/TWhel in 2015 to 1541 jobs/TWhel in 2030 with the rapid ramp up in renewable energy installations. Beyond 2030, it declines steadily to around 748 jobs/TWhel by 2050, as highlighted in Figure 9. 4.8 North America North America is comprised of the major economic centres of the world, the USA, Canada and a rapidly emerging economy in Mexico, with a 19% share of global GDP (IMF, 2017), and is one of the largest energy consumption centres across the world, with total electricity consumption of around 5284 TWh in 2015. This is estimated to rise to 7069 TWh by 2050, mainly driven by the rapid growth of Mexico as well as stable electricity demands from the USA and Canada (IEA, 2016; Aghahosseini et al., 2017). Renewable energy has been on the rise in the recent years across all the 3 countries. By the end of 2017, the USA had installed capacities of 91 GW of wind and 52 GW of solar in its power mix. There has been a steady rise in the share of renewable power generation in Canada and the latest power generation auctions in Mexico yielded some of the lowest bids, with an average in the range of 17 – 18 €/MWh (Bellini, 2017; Rabson, 2017). Mexico has set a target of at least 35% of total electricity generation by 2024 to be from renewable energy sources (REN21, 2017). The trend is set to continue in the USA and Canada too, and a combination of wind, solar PV, hydropower and battery storage are seen as the most economical power generation sources by 2050 (Ram et al., 2017a). Similarly, solar PV (1.62 million jobs in 2025) along with wind (762 thousand jobs in 2025) emerge to be the dominant job creating sectors during the transition period as shown in Figure 10. Additionally, hydropower (180 thousand jobs by 2050) and bioenergy (180 thousand jobs by 2050)
create a stable share of jobs through the transition period. Storage led by batteries begin to create jobs from 2025 onwards with a stable share until 2050 with 330 thousand jobs in the battery sector. Whereas, coal and gas power generation associated jobs are seen to decline rapidly. Overall, jobs are set to increase from around 1.8 million in 2015 to nearly 3.8 million, with the rapid ramp up in installations up to 2025 and then a steady decline towards nearly 2.7 million by 2050. Figure 10: Jobs created by the various power generation and storage technologies (left) and jobs created based on different categories with the development of electricity demand specific jobs (right) during the energy transition from 2015 to 2050 in North America. The category-wise distribution of jobs in North America during the transition period is shown in Figure 10. Manufacturing, construction and installation of renewable energy technologies create a significant share of jobs enabling the rapid ramp up of capacity until 2030, beyond this period there are stable number of jobs created in these sectors up to 2050. Furthermore, manufacturing includes both for local use as well as for exports to the other regions as indicated by Table A3 in the Appendix. The share of manufacturing jobs along with a marginal share of exports initially rise up to 2025 (21% and 1% of total jobs respectively), beyond which they decline. As manufacturing is predominantly to cater to the local power markets across North America with domestic manufacturing having a share of 11% of total jobs by 2050 and only 4 thousand jobs for exports. Fuel jobs continue to decline through the transition period reaching just 2% of total jobs by 2050, as capacities of conventional power plants continue to decline. On the contrary, operation and maintenance jobs continue to grow through the transition period and become the major job creating segment by 2050 with 64% of total jobs. As operation and maintenance jobs last through the lifetime of power plants, they offer relatively stable long-term job prospects. This has the potential to create a positive effect in many parts of the USA that suffer from persistent unemployment (U.S. Bureau of Labor Statistics, 2018). The electricity demand specific jobs initially increase from 339 jobs/TWhel in 2015 to 666 jobs/TWhel in 2025 with the rapid ramp up in renewable energy installations. Beyond 2025, it declines steadily to 374 jobs/TWhel by 2050 as highlighted in Figure 10. 4.9 South America The South American region including Central American countries is comprised of growing economies, with around a 6% share of global GDP (IMF, 2017). With steadily increasing economic growth in most of the countries, the need for energy is rising. The total electricity consumption that is around 1180 TWh in 2015, is estimated to rise up to 2420 TWh by 2050 (IEA, 2016; Barbosa et al., 2017). A distinctive feature of South America’s power generation mix is the predominance of hydropower and bioenergy, due largely to the high shares in Brazil, which generates about 40% of the total regional electricity (IRENA, 2016).
In recent years, South America has witnessed an impressive growth in renewable power generation, whose installed capacities have more than tripled between 2006 and 2015, from 10 GW to 36 GW (IRENA, 2016; REN21, 2017). While in absolute terms most of that growth has been in bioenergy and onshore wind primarily in Brazil, solar PV has also grown significantly in Chile, Peru and Uruguay (BNEF, 2017). This trend is seen to rapidly increase in the near future and continue through the transition period, with solar PV complemented by hydropower, wind and biomass emerging as the main sources of power generation by 2050 (Barbosa et al., 2017; Ram et al., 2017a). Likewise, jobs are predominantly created in the bioenergy (827 thousand jobs by 2020) and hydropower (357 thousand jobs by 2025) sectors during the initial periods of the transition up to 2030 as shown in Figure 11. Beyond which, solar PV (930 thousand jobs by 2050) along with battery storage (202 thousand jobs by 2050) emerge as the major job creators. Storage led by batteries create jobs from 2025 onwards and maintain a stable share (9% of total jobs in 2025) through the transition period until 2050 (12% of total jobs). Whereas, coal, gas and oil power generation associated jobs decline rapidly, almost disappearing by 2025. With the brisk build up in installations, the total number of direct energy jobs rise from just under 1 million to nearly 2.2 million by 2025 and a steady decline thereafter towards 1.6 million by 2050. Figure 11: Jobs created by the various power generation and storage technologies (left) and jobs created based on different categories with the development of electricity demand specific jobs (right) during the energy transition from 2015 to 2050 in South America. A category-wise distribution of jobs in South America through the transition period is shown in Figure 11. With rapid installation of power generation capacities in the initial period of 2020 to 2030, bulk of the jobs are created in the construction and installation of power generation technologies with 40% of total jobs by 2025. Manufacturing jobs have a relatively lower share in the initial periods with a high share of imports. Beyond 2030, the share of manufacturing jobs are observed to stabilise until 2050 (16% of total jobs), with increase in domestic production capabilities. The share of fuel related jobs continues to diminish through the transition period reaching just 3% of total jobs by 2050, as conventional power plants are replaced by renewable and storage technologies. Whereas, the share of operation and maintenance jobs grows through the transition period with 52% of total jobs by 2050. A small share of decommissioning jobs with around 3% of total jobs by 2050, are created through the transition period with the continuous replacement of power plants at the end of their lifetimes. The electricity demand specific jobs rapidly increases from 835 jobs/TWhel in 2015 to 1669 jobs/TWhel in 2020 with the rapid ramp up in renewable energy installations. Beyond 2020, it declines steadily to around 674 jobs/TWhel by 2050, as highlighted in Figure 11. 4.10 Global
With the rapid ramp up of installed capacities, a growing share of renewable power generation technologies are observed to compensate for the phasing out of nuclear power production as well as for the continually reducing number of fossil fuel power plants globally (Breyer et al., 2017b; Ram et al., 2017a). This strong growth in the renewable energy sector leads to an increase of around 70% more direct power sector jobs by 2030, and the overall jobs created are 1.5 times as high in 2050, compared to 2015. Jobs created continue to rise to reach around 34 million direct energy jobs by 2030. Beyond this point, they decline to around the 30 million range and then steadily increase to nearly 35 million by 2050 as shown in Figure 12. This is mainly due to large capacities being replaced and reinvested in, as they would reach end of their lifetimes with decommissioning contributing around 2% of total jobs by 2050. Solar PV (22.2 million jobs by 2050), batteries (4.5 million jobs by 2050) and wind energy (1.4 million jobs by 2050) are the major job creating technologies during the entire transition period from 2015 to 2050. In the case of wind energy, around 7.3 million jobs are created in the period from 2020 to 2030, beyond that, as solar PV becomes more cost effective they drive majority of the installations until 2050 and jobs in the wind sector are stabilised. While, hydropower (1.9 million jobs by 2050) and bioenergy (2.3 million jobs by 2050) create a stable share of jobs through the transition period. Solar PV is observed to replace coal as the major job creating energy resource, with around 64% of total jobs by 2050, as compared to just 10% of total jobs in 2015. Additionally, it is well complemented by battery storage creating around 13% of total jobs by 2050. Whereas, jobs in the coal, gas and nuclear power sectors are observed to decline rapidly as shown in Figure 12. Figure 12: Jobs created by the various power generation and storage technologies (left) and jobs created based on different categories with the development of electricity demand specific jobs (right) during the energy transition from 2015 to 2050 globally. A category-wise classification of jobs in manufacturing, construction and installation, operation and maintenance, fuel supply, decommissioning and transmission created during the energy transition from 2015 to 2050 is shown in Figure 12. Fuel sector jobs are set to decline from 44% of the total jobs in 2015 to just around 2% of the total jobs by 2050, as fossil fuels and nuclear power capacities decline. On the other hand, it can be observed that operation and maintenance jobs have the most significant increase in the share of the total jobs created from 15% in 2015 to 50% by 2050. This indicates that the transition towards a 100% renewable power system enables creation of more stable jobs, which can contribute to stable economic growth of countries mainly in the developing regions of the world and provide a means of tackling youth unemployment (Ali, 2014). In many parts of the world, this could be a catalyst to improve social wellbeing as well as political stability (Kollewe, 2010). Furthermore, Figure 12 also illustrates the development of the electricity demand specific jobs, which remain quite stable through the transition period.
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1.5 times more O&M jobs as GT Gas Storage 0.00 0.12 0.01 0.11 Gov. of UK, 2015 PtG 1.86 2.60 0.28 0.21 Assuming 2 times the value as GT Battery largescale 16.90 10.80 0.40 0.80 0.5 times of prosumer storage Battery prosumer 16.90 21.60 0.80 1.21 Derived from USDOE, 2017 Pumped Hydro Storage 7.00 14.80 0.40 4.44 Assuming 2 times the values for Hydro Dam A-CAES 8.45 10.80 0.40 0.40 Assuming 1/2 the values for Batteries (large-scale) Transmission Employment factor with regard to investments – 5045 jobs/b€ The Brattle Group, 2011 The decommissioning employment factors are derived from (RFF, 2017), (Evonik, 2010) and (Oldham, 2009). Further details can be found in the Supplementary Material. Table A2: Regional employment multipliers, based on labour productivity across the different regions used in the estimation of jobs created during the energy transition from 2015 to 2050. (Abbreviations: EUR – Europe, MENA – Middle East and North Africa, SSA – Sub-Saharan Africa, SAARC – South Asian Association for Regional Cooperation, NEA – Northeast Asia, SEA – Southeast Asia, NA – North America, SA – South America) Regions Regional Employment Multipliers 2015 2020 2025 2030 2035 2040 2045 2050 EUR 1.05 1.08 1.10 1.13 1.17 1.19 1.20 1.22 Eurasia 1.86 1.80 1.75 1.70 1.65 1.65 1.65 1.65 MENA 2.26 1.94 1.66 1.51 1.37 1.32 1.28 1.23 SSA 7.49 6.42 5.51 5.00 4.54 4.38 4.24 4.09 SAARC 5.18 3.99 3.07 2.56 2.13 2.00 1.88 1.76 NEA 2.22 1.89 1.60 1.50 1.41 1.42 1.42 1.43 SEA 2.52 2.20 1.93 1.77 1.63 1.58 1.52 1.47 NA 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 SA 3.14 2.69 2.31 2.10 1.90 1.84 1.78 1.72 The regional employment multipliers, which are based on labour productivity factors are derived from (ILO, 2016) and (IMF, 2017). Further details can be found in the Supplementary Material and a description is provided in the methods section. Table A3: Share of local manufacturing and corresponding share of imports across the different regions used in the estimation of jobs created during the energy transition from 2015 to 2050. (Abbreviations: EUR – Europe, MENA – Middle East and North Africa, SSA – Sub-Saharan Africa, SAARC – South Asian Association for Regional Cooperation, NEA – Northeast Asia, SEA – Southeast Asia, NA – North America, SA – South America) Regions Share of Local Manufacturing [%] Region of Import/ Import Shares [%]
2015 2020 2025 2030 2035 2040 2045 2050 EUR NA SAARC NEA EUR 90 90 90 90 100 100 100 100 - 25 - 75 Eurasia 40 50 60 70 80 90 100 100 25 - 25 50 MENA 30 30 40 50 60 70 80 90 25 - 25 50 SSA 30 30 40 50 60 70 80 90 25 15 10 50 SAARC 70 80 90 100 100 100 100 100 25 15 - 60 NEA 100 100 100 100 100 100 100 100 - - - - SEA 90 90 90 90 100 100 100 100 30 - 30 40 NA 80 90 90 90 100 100 100 100 50 - - 50 SA 50 60 70 80 90 100 100 100 25 50 - 25 The development of the shares of local manufacturing in the different regions during the energy transition period from 2015 to 2050 and the corresponding regions of import, along with the shares of import are based on data gathered from (Rutovitz et al., 2015), (UNIDO, 2013) and (PwC, 2017). Vitae Author 1 Name Manish Ram Institution LUT University, Yliopistonkatu 34, 53850 Lappeenranta, Finland Biography Conducting doctoral research at Solar Economy Group, LUT. Focusing on socioeconomic impacts of energy transitions across the world. Publications at https://www.researchgate.net/profile/Manish_Ram2/contributions Author 2 Name Arman Aghahosseini Institution LUT University, Yliopistonkatu 34, 53850 Lappeenranta, Finland Biography Conducting doctoral research at Solar Economy Group, LUT. Focusing on energy transitions in the MENA region and Americas and exploring complementary technologies to enable the transition. Publications at https://www.researchgate.net/profile/Arman_Aghahosseini/contributions
Author 3 Name Christian Breyer Institution LUT University, Yliopistonkatu 34, 53850 Lappeenranta, Finland Biography Heading the Solar Economy Group at LUT. Many years of academic experience in the energy domain. Focusing on energy transitions towards full sustainability, in global-local perspective. Publications at https://www.scopus.com/authid/detail.uri?authorId=39761029000