Clean Energy Jobs

With over 200 renewable energy projects already planned for the coming years Australia is in the beginning of a clean energy boom. These projects will deliver more than five times the total capacity of the iconic Snowy Mountains Hydro Scheme, which took 25 years to complete. The 20 percent by 2020 Renewable Energy Target, the Carbon Pollution Reduction Scheme and direct multi-billion investments through the Federal Budget will, if passed by Parliament without further weakening, provide a platform for tens of thousands of clean energy jobs across Australia and support a cost and risk effective climate policy strategy.

The Climate Institute commissioned leading energy sector consultants, McLennan Magasanik Associates (MMA), to assess the potential contribution of renewable energy, such as wind, solar and bioenergy power stations, to regional employment in Australia. MMA’s analysis covers all existing commercial renewable energy installations, as well as those which are committed and planned. The assessment covers permanent employment (operation and maintenance) as well as construction jobs and the contribution to other indirect jobs like manufacturing and engineering. Where possible MMA has used information sourced from the owners and operators of the renewable energy facilities. This provides an accurate estimate of job numbers, drawing on the experiences of real companies working on real projects, rather than relying just on economic modelling. This assessment does not consider the tens of thousands of clean energy jobs that would be created by investments in industries such as energy efficiency, small scale distributed renewable energy such as roof top solar and lower carbon traditional energy sources (e.g. gasfired generation or carbon, capture and storage). This is not a final picture of all projects as some projects may not pass appropriate planning processes and others will emerge, e.g for example, this assessment does not consider new proposals that may emerge for large scale solar projects under the $1.6 billion Solar Flagships project announced in the Budget.

CLEAN ENERGY JOBS AND INVESTMENT IN AUSTRALIA

This may allow Australia to join what the International Energy Agency (IEA) has called a global “energy revolution”. The IEA reports that around 30 percent of new power generation capacity installed globally in 2007 was directed towards renewable energy sources such as wind and solar power.1 This industrial revolution has already seen global employment in renewable energy outstrip those directly employed in oil and gas industries. In Germany, renewable jobs outnumber jobs in car manufacturing. This trend will continue.

Briefing >

CLEAN ENERGY JOBS AND INVESTMENT IN REGIONAL AUSTRALIA

This policy brief provides an overview of MMA’s key findings, along with some additional analysis prepared by The Climate Institute. In summary, MMA’s analysis shows: Around 26,200 new jobs will be created if all planned and committed clean energy projects go ahead. This includes almost 2,500 new permanent positions, over 15,000 construction jobs and more than 8,600 indirect jobs in supporting sectors.

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The expanded renewable energy capacity will see over 3,600 people directly employed in the clean energy industry on a permanent basis.

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Over $31 billion will be invested in these new clean energy projects, injecting around $10 billion into local economies in regional Australia.

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Australia currently has over eight gigawatts (GW) of commercial scale renewable energy installed and this contributes around 8-10% of national electricity generation. Each year these sites produce enough electricity to power 3 million average Australian homes (over 23,000 gigawatt hours – GWh - in total). While hydro remains the largest source of renewable energy, there has been significant diversification in recent years, with more wind, biomass and solar coming online. For example, wind capacity increased by 280 percent between June 2006 and 2 June 2007. Currently there are over 1,200 people permanently employed in the operation and maintenance of these existing clean energy facilities. Since the 1980, renewable energy projects have generated over 12,000 construction jobs nationally and currently support an estimated 7,380 indirect jobs. Most of the employment to date has been concentrated in Tasmania, Queensland and NSW, with a smaller share in Victoria, South Australia and Western Australia.

Despite the economic downturn, globally investments in renewable energy grew by 5 percent in 2008, rising to a record US$155 billion.3 Much of this investment has occurred in the wind industry, creating thousands of new jobs. Globally, it is estimated that over 400,000 people are currently employed in the 4 wind industry, with the figure forecast to reach up to 2.2 million by 2020.

> United States: In 2008, the US overtook Germany as the country with the largest installed wind power capacity, creating around 35,000 new jobs and making it one of the few industries to generate new employment last year. In total, the US wind industry currently provides employment to up to 85,000 5 people.

> China: China doubled its total installed wind power capacity in 2008, making it one of the fastest growing markets. China has become one of the leading manufacturing hubs for wind turbines, 6 generating thousands of jobs.

> Europe: It is estimated that the wind industry alone provided direct employment to over 108,000 people in 2007, with over 12,000 new direct jobs created annually since 2002. An additional 42,000 people are 7 also employed indirectly, through wind turbine and component manufacturing.

BIGGER THAN THE SNOWY: CLEAN ENERGY PROSPECTS MMA’s analysis shows that committed and planned clean energy projects are expected to deliver over 12 GW of new renewable energy capacity in coming years. To put this in perspective, the Snowy Mountain Hydro Scheme, which was built between 1949 and 1974, has a total capacity of just 2.2 GW. Figure 1 illustrates the magnitude of new clean energy developments in the pipeline for the coming decade, compared to previous decades.

CLEAN ENERGY JOBS AND INVESTMENT IN AUSTRALIA

Box 1: International Experience – Wind Power

Briefing >

TAKING STOCK: EXISTING CLEAN ENERGYJOBS

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Briefing >

Figure 1: Additional renewable energy installations per decade

Figure 2: Projected growth in renewable energy output, by state (2010-2020)

Western Australia

South Australia

Tasmania

Victoria

ACT

CLEAN ENERGY JOBS AND INVESTMENT IN AUSTRALIA

While new clean energy projects are planned for all states, Western Australia is expected to see the largest growth in renewable energy output, with generation expected to grow by close to 350% by 2020 (see Figure 2). South Australia, Queensland and Victoria are all expected to see renewable energy output grow by more than 200%.

New South Wales

0%

50%

100%

150%

200%

250%

300%

% increase in renewable energy generation (2010-2020)

350%

400%

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Queensland

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MMA’s database of committed and planned clean energy projects identifies over 26,000 new jobs. This includes permanent jobs for operating and maintaining renewable energy facilities, as well as jobs created during the construction phase. Based on experience, an estimate has also been made of the likely contribution to indirect employment. A brief snapshot of MMA’s findings is presented below. Table 1: Clean energy jobs in existing, planned and committed renewable energy projects

Permanent

8

Peak Construction Indirect Total

9

Total

WA

SA

TAS

VIC

NSW/ACT

QLD

3,760 (2,457 new)

379

788

501

764

832

496

1,381

3,798

1,303

3,582

4,089

924

-

-

-

-

-

-

1,760

4,586

1,804

4,346

4,921

1,420

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Permanent employment: An additional 2,457 ongoing operation and maintenance jobs are likely to be generated nationally if all committed and planned projects go ahead. In the short term, around 600 new permanent jobs are expected by 2015. Most of these permanent jobs will be created in regional areas, with the bulk occurring in South Australia, New South Wales and Victoria.

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Construction jobs: It is estimated that over 16,458 construction jobs will be generated if all of the projects in the pipeline proceed. This includes employment for around 3,800 construction workers between 2010 to 2015 and 7,300 jobs in the following 5 years.

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Indirect jobs: The expansion of the clean energy sector is expected to indirectly contribute to an additional 8,650 jobs. This includes jobs in energy utilities (supplying network and retail services), the financial sector, engineering and development services, consultancies, and research and development bodies. Many of these jobs will be concentrated in the capital cities.

Figure 3 shows, some clean energy hot-spots and Table 2 outlines regional job estimates. Figure 3: Location of clean energy projects

CLEAN ENERGY JOBS AND INVESTMENT IN AUSTRALIA

15,088 16 030 (8,650 new) 34,878 (26,195 new)

Briefing >

REGIONAL EMPLOYMENT

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Sub-region

*

Peak new construction jobs

New local expenditure ($ million, mid 2009 dollars)

North Qld

318

530

210

Central Qld

83

-

-

South East Qld

92

394

309

South West Qld

3

-

-

North East NSW

86

210

68

Sydney GMR

44

-

-

Canberra

5

-

-

Queensland

New South Wales/ACT

South East NSW

555

-

982

West NSW

108

1,100

485

North Tas

461

1,181

486

South Tas

26

76

14

Central Vic

184

944

562

North East Vic

87

-

-

Tasmania

Victoria

South East Vic

32

110

77

South West Vic

404

2,528

954

North West Vic

23

-

-

South East SA

497

2,858

1,202

North East SA

-

-

-

Adelaide

15

-

-

Inland SA

275

940

455

South Australia

Western Australia South West WA

1,381

494

6

-

-

North WA

7

-

-

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366

Mid West WA

CLEAN ENERGY JOBS AND INVESTMENT IN AUSTRALIA

Permanent jobs (existing and new)

Briefing >

Table 2: Sub regional clean energy jobs and investment

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Page 5 of 8 *

Note, these figures do not include Northern Territory

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South Australia

Victoria

Western Australia

Queensland

Tasmania

CLEAN ENERGY JOBS AND INVESTMENT IN AUSTRALIA

New South Wales

Briefing >

Figure 4: Constructions Jobs across Australia

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Smart economic stimulus packages and climate change policies can produce double or even triple dividends – immediate job and economic growth in clean energy and climate friendly industries; efficiency driven lower energy costs and lower carbon pollution. This study represents only a fraction of the new jobs that will be created across a range of clean and low carbon industries. For example, recent assessments in Australia suggest that energy efficiency policies could deliver tens of thousands of clean energy jobs: >

Consulting firm Davis Langdon calculate that retrofitting existing commercial building stock to be more energy efficient "would create direct employment for more than 10,000 people engaged in construction each year, which means generating almost 27,000 new jobs across the broader 10 economy."

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KPMG conclude that a multi-billion dollar national household energy efficiency program could "create approximately 40,000 jobs over seven years by boosting the supply and demand for energy efficiency 11 products and measures."

Briefing >

Box 2: Other low carbon job opportunities

INVESTING IN REGIONAL ECONOMIES

Table 3: Estimated clean energy investment from committed and planned projects, by state and 12 technology ($2008 million)

Biomass Geotherma l Hydro Solar / PV Wave Wind Total

Total $1,740

WA

SA

TAS

VIC $200

$57

NSW/AC T $131

QLD

$729

$87

$536

$2,122

-

$2,122

-

-

-

-

$905 $345

$21

-

$482 -

$31 $76

$285 $246

$107 -

$36 $26,914 $32,062

$1,719 $2,469

$6,076 $8,285

$1,884 $2,566

$36 $7,765 $7,965

$7,521 $8,183

$1,949 $2,592

POLICY IMPLICATIONS On the 4th of May the Prime Minister announced stronger potential emission reduction targets and amendments to its emissions trading scheme - the Carbon Pollution Reduction Scheme (CPRS). In addition Australian governments have supported other critical policy moves including:

2. key commitments to multi-billion investments low emission technology deployment and energy efficiency in the Federal Budget, and 3. announced and pending elements of a National Energy Efficiency Strategy to be agreed by COAG mid year. Overall, while the proposed CPRS is far from ideal, the amended package provides an important foundation for Australia to help achieve an effective global climate agreement that is in the national interest. Along with the Renewable Energy Target, and announced Budget and recent energy efficiency improvements, there are strengthening investment signals for clean energy and other low carbon jobs and industries.

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BOOSTI

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> MAY 2009

1. the Council of Australian Government’s (COAG) support for implementing the 20 percent by 2020 Renewable Energy Target

CLEAN ENERGY JOBS AND INVESTMENT IN AUSTRALIA

MMA estimates that the clean energy projects in the pipeline will require an investment of over $31 billion. As shown in Table 2, while much of this investment will occur in South Australia, NSW and Victoria, around $7.6 billion will be shared amongst the other states. MMA suggests that up to 30 percent of this will be spent on local goods and services, injecting around $10 billion into the Australian economy if all projects go ahead. The dramatic expansion of wind power could also generate around $19 million in annual payments to landholders where the turbines are located.

Over the next month Parliament will work through some of these proposals which could unleash tens of thousands of jobs and tens of billions of dollars of investment in energy efficiency, solar, wind, geothermal and carbon capture and storage jobs and industries. The future of Australian clean energy jobs and profits is now in part in the Senate’s hands. It’s time to stop the arguments, it is time to get to work with clean energy powering a low carbon economic recovery and a critical jobs boost for regional Australia.

CLEAN ENERGY JOBS AND INVESTMENT IN AUSTRALIA

1 IEA (2008), ENERGY TECHNOLOGY PERSPECTIVES 2008: FACT SHEET – RENEWABLES, How can a shift to renewables be accelerated? International Energy Agency, Paris. 2 National Electricity Market only, equals around 10% of all new capacity. Energy Supply Association, pers comm.. 3 New Energy Finance (2009), Clean Energy League Tables, available from: www.newenergyfinance.com 4 See Global Wind Energy Council (2008), Global Wind 2008 Report; and Global Wind Energy Outlook 2008. 5 Ibid. 6 Ibid. 7 European Wind Energy Association (2009), Wind at Work: Wind energy and job creation in the EU, available from: www.ewea.org 8 Permanent jobs includes ongoing operation and maintenance and includes jobs in existing renewable energy projects. 9 Indirect jobs are only presented at a national level as many of these jobs will not necessarily be located where the project occurs, e.g. office works in national company head quarters. These numbers also do not include jobs that would be generated in other countries by renewable energy investments in Australia. 10 Davis Langdon (2009), Retrogreening offices in Australia, the Story to create jobs, Research Report. 11 KPMG (2008), A national energy efficiency program to assist low-income households, KPMG, Brotherhood of St Laurence and Ecos Corporation, Melbourne. Australia. 12 Investment numbers cover the expenditure if all proposed projects where to proceed. Under the Renewable Energy Target, not all identified projects will required and model estimates suggest around $20 billion to $25 billion will be spent 13 See Climate Institute (2008), Making the Switch to Clean Energy, Climate Institute Policy Brief.

Briefing >

These investment signals complete a cost and risk effective strategy that the Climate Institute 13 has been advocating for some time. Australia should aim to hit 2020 with a mixed portfolio of industrial scale clean energy solutions in operation. We need to hedge our investments in case one or more of the promising clean energy technologies of solar, geothermal or carbon capture and storage don’t work. The more technologies we have in the tool kit the easier it will be to meet scientifically credible emission reduction targets

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