Transcript Jobs and Economic Development Impacts

Deployment of
Renewables to Support
Regional Economic
Development
Solar Technical Assistance
Working Group
David Keyser
February 24, 2015
NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.
Overview
• Summary of how regional economies work
• Unique aspects of regional economies and
how these affect growth
• Quantifying gross economic impacts from
renewable energy expansion
• Additional resources
• Discussion
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Simplified Diagram of a Regional Economy
Exports (Money Flows In)
Outside Income (Retirement
Income, Investment Income, etc.)
Work (Labor)
Wages, Property
Income
Local Businesses
Local Population
Business Purchases from
Other Local Businesses
Imported
Inputs (Money
Flows Out)
Local Consumer Purchases
Purchases from
Outside of the
Region (Imports)
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Regional Implications
• A larger, more diverse local economy can better
capture revenue
• If returns on investment (i.e., property type
income) accrue locally this will have a greater
local economic impact
• Development outside of a region can still have a
local economic impact via exports or other types
of income received by the local population
• But just because an local economy has resources
does not mean that developers and customers
will use them
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Regional Growth Considerations
• If the goal of a policy is to increase local
industrial activity while supporting renewables,
there are many considerations
• Are there local businesses that can meet
anticipated demand?
• Will local businesses have to hire workers? Is
there a workforce that they can draw from?
o
Commuting and job-driven population change have
implications for public planners, developers, and the
local economy as a whole – may or may not be
desirable depending on community priorities
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Jobs and Economic Development Impacts (JEDI)
• Freely available input-output
tool to estimate gross
employment and economic
impacts that result from an
investment in new power
generation or fuel production
• JEDI default inputs are from
developers and industry
experts, based on existing
projects
• User input can be minimal
with defaults or be very
detailed for more precise
results.
Photo Credit: David Hicks, NREL PIX #18397
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Downloading the JEDI model
• http://www.nrel.gov/analysis/jedi/
www.nrel.gov/analysis/jedi
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•
•
Current JEDI models
o Land based wind
o Natural gas (combined cycle)
o Coal (pulverized coal)
o Marine and hydrokinetic
o Concentrating solar power
o Dry mill corn ethanol
o Lignocellulosic ethanol
o Solar photovoltaic
o Conventional hydropower
o Transmission
o Geothermal
o Biopower
o Petroleum refining
JEDI models under development
o Distributed wind
o Biorefinery – Fast Pyrolysis
Photo from Sally Wright, Renewable Energy Research Lab - Umass, NREL/PIX15160
What Technologies are Available?
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JEDI Model Approach
• Build project development and operation
scenarios
o
o
Scenarios contain project expenditures and other
characteristics
Can be based on default data or a model user can
supply detailed project information
• Feed project scenario into an input-output
model to estimate impacts
o
o
Currently uses the IMPLAN model
User has ability to change I-O data to represent
different geographies or models such as RIMS II
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Input-Output Models
• Snapshot of the relationships between sectors of an
economy at a single point in time
o
Industries, labor, households, capital, investments,
government, imports/exports
• Expenditures in an economy
o
o
Inputs: goods/services from other industries, payments for
labor, capital, taxes, imports
Outputs: goods/services to other industries, households,
and governments, exports
• Captures feedback within a region, i.e. an increase in
demand for electricity might increase demand for
turbines, which will further increase demand for
electricity
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JEDI Results
• Jobs (FTEs)
o
Number of people working the equivalent of 40 hr. weeks, 52
weeks/yr.
• Earnings
o
o
Income from work
Includes wages, salaries, employer provided supplements (retirement,
health)
• Gross output
o
o
o
Measure of total economic activity
At the business level, can think of this as revenue plus expenditures on
inputs (if the business isn’t losing money)
Not the same as GDP
• Value added (select models)
o
o
Can think of this as revenue less expenditures for inputs purchased
from other industries
Industry’s contribution to GDP
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Most localized impacts
Sample job types
o Installer
o Electrician
o Truck driving
o Crane operation
o Management, support
o Siting
Photo credit: Susan Bilo / NREL PIX #21393
Photo credit: Dennis Schroeder / NREL PIX #22182
Photo from Northern Power Systems, NREL/PIX 13853
•
•
Photo Credit: Craig Miller Productions / NREL PIX #
03500
Photo by David Parsons, NREL/PIX 05572
Photo from istock 947687
Photo credit: Jim Tracy / NREL PIX #09275
Photo from Stephanie Lively, Boise State University, NREL/PIX 16147
Photo from Cross Island Farms, NREL/PIX 19923
Project Development & Onsite Labor Impacts
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Photo Credit: Evergreen
Solar / NREL PIX #14722
Photo Credit: SunPower / NREL PIX #13451
Photo Credit: Frank Jeffrey / NREL PIX
#07781
Polysilicon manufacturers
Module and component manufacturers
Equipment sales and financing
Property taxes, banking, accounting
Photo from iStock/8433850
Photo from iStock/4088468
•
•
•
•
Photo Credit: United Solar
Ovonic / NREL PIX # 15779
Photo Credit: Shell Solar Industries / NREL
PIX #13856
Photo Credit: Dennis Schroeder / NREL PIX #22569
Photo from iStock/8384987
NREL/PIX 11074
Photo from iStock/5676592
Local Revenues, Turbine, Module, & Supply Chain Impacts
Photo Credit: John De La Rosa / NREL PIX #26513
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Photo from iStock/4363756
Photo from iStock/8783332
Photo from iStock/9774681
Induced Impacts
Photo from iStock/8913075
Photo from iStock/8007815
Photo from iStock/3275965
Money spent in the local area on goods and services from increased
revenue: sandwich shops, child care, grocery stores, clothing, other
retail, public transit, new cars, restaurants, medical services
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Explaining Variability in Economic Development Impacts
• Size and cost of the project
•
Higher costs often results in
increased impact for both
construction and O&M
• Size and diversity of the
local economy
•
•
Level of analysis
Multiplier effect
• Developer preferences
•
Local share/local purchase
coefficient
• Magnitude and allocation of
project revenues
•
e.g. community wind
Photo Credit: NREL PIX #16116
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Interpreting Results and Model Limitations
• JEDI results are gross, not net
• JEDI does not factor in far-reaching impacts from
development such as changes in utility rates,
greenhouse gas emissions, property values or public
health
• Input-output models cannot estimate impacts from
supply-side changes such as technological
improvements, price changes, or changes in
taxes/subsidies
• JEDI doesn’t evaluate a project’s feasibility or
profitability
• NREL is not responsible for how the model is used,
applied, or how the results are interpreted
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How JEDI Can Inform Economic Development
• Describes the potential scale of impacts, different
ways of implementing policies.
• JEDI Impacts are gross, but research shows that at a
local level the order of magnitude of JEDI impacts for
land-based wind is close to observed net impacts
(Brown et al. 2012).
o
o
It is still important to consider that this isn’t always
necessarily true and JEDI doesn’t quantify whether it is or
isn’t.
This study didn’t estimate impacts in areas outside of
where wind plants were built – possible negative and
positive impacts in other regions.
• I-O analysis is commonly used by economic
developers.
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Additional Resources
Source: Department of Energy WINDExchange
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Resource Center Contacts
• Renewable Northwest
o
David Wolf ([email protected])
• Four Corners
o
Meghan Dutton ([email protected])
• Midwest
o
Lisa Daniels ([email protected])
• Northeast
o
o
Val Story ([email protected])
Deborah Donavan ([email protected])
• Southeast
o
o
Brian O’Hara ([email protected])
Jen Banks ([email protected])
• Web
o
http://apps2.eere.energy.gov/wind/windexchange/regional.asp
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Discussion
References
Brown, J.; Pender, J.; Wiser, R.; Lantz, E.; Hoen,
B. “Ex post analysis of economic impacts from
wind power development in U.S. counties.”
Energy Economics (34). 2012; pp. 1743-1754.
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