Transcript IDC pres at Green Jobs Summit

Day Month Year
Estimating the potential impact of a
greening economy on job creation
Jorge Maia
Head: Research & Information
Industrial Development Corporation
Green Economy Summit
Sandton, 19 May 2010
Introduction to the IDC/DBSA research project
• High expectations around green jobs:
– Rapid growth sector with enormous multi-sectoral potential.
– Determinant of future competitiveness.
– Economic crisis imperative – one of the main solutions.
 Need for greater clarity around job creating potential.
• Existing figures on green jobs:
– High variability from one study to another - mainly sector- or technology-specific, no macro-economic estimates.
– Often weak reliability / uncertainty about the sources.
 Uncertainty = criticism = credibility issues.
• Inform optimal technology mix to meet energy demand, highlighting relative jobs potential:
– Not “green jobs” in isolation, but strong employment emphasis/balance when greening the economy.
– Policy trade-offs (long-term economic growth, emissions reduction, job creation, sustained competitiveness).
– Acknowledge and face the various constraints.
– Prioritise sectoral emphasis, sequencing policies over time.
 Maximise job creation as we green the SA economy.
2
Introduction to the IDC/DBSA research project (cont.)
Moving away from an overwhelming dependency on fossil fuels (especially
coal) for energy generation in SA, towards alternative energy sources:
+ ve impact
- ve impact
• Mining
• Transport (logistics)
• Environmental impact such
as pollution levels (air,
water, soil etc.)
• Economic linkages (GDP,
jobs, investment, etc.)
• Impact on output levels, investment &
jobs in coal mining (expansion at
slower pace, substitution in the L-T)
• (New investment, jobs and output
through alternative energy sectors,
incl. const., manufacturing, O&M.)
• Transportation services activity (rail &
road) from coal mines to power stations
• Transportation of cleantech materials
• Transport of export coal to ports.
• Road usage: reduced congestion &
infrastructural damage.
• Improvement in soil and land quality
• Improved water and air quality
• Increased water availability
• Reduced economic activity in several
sectors (e.g. machinery & equipment,
chemicals etc.), via linkages, due to lower
coal mining production over time
• Regional shifts i.t.o.
investment, GDP, jobs
• Increased economic activity due to
linkages arising from expanding
renewable energy sector & introduction of
cleaner technologies .
• Potential growth of export sector
associated with renewables & cleantech.
Estimating the economy-wide impact
Assessing the impact of introducing alternative/renewable energy sources & cleantech
Adoption of
“greener”
technologies
Demand for
investment related
goods and/or
materials during
construction
phase
New investment
required
Cleaner energy
generation/
technology
application and
operational phase
Increased construction activity, as well
as higher production activity in
existing/new domestic supplying
sectors (GDP, jobs, investment, etc.)
Adverse BoP implications due to
increased import demand for
specialised goods not available in SA,
particularly in the S-T, gradually +ve
Increased economic activity associated
with cleaner energy generation /
technology application, with direct
impact on job creation
Increased economic activity in
associated industries through linkages /
multiplier effects (e.g. business
services, components manufacture)
Export
potential
Export
potential
4
Process of determining employment potential
Technological application/resource management
(energy generation, energy efficiency, emission control, biodiversity)
Construction
Local
potential
Short-term jobs
opportunities
Export
potential
Manufacturing
Local
potential
Export
potential
Medium-term jobs
opportunities
Operation & maintenance
Local
potential
Export
potential
Long-term jobs
opportunities
Case study – wind power generation:
Growth and challenges
Cumulative global wind power generation capacity
• Growth in global wind power generation capacity has
been almost exponential.
400
Gigawatt
300
• Technically, wind power has the largest RE
generation potential after solar.
Cumulative capacity
Forecast GWEC scenario
200
• Some slowdown since late 2008 (with a few
exceptions such as China).
• Significant contribution in more than 70 countries,
both industrialised and emerging/ developing.
• Major challenges include:
100
0
– Not yet competitive, although continuously improving;
– Depend on available wind power, backup capacity
needed;
– Logistics for construction;
Source: Global Wind Energy Council
– Grid connection.
6
Case study – wind power generation:
Potential and challenges
SA’s wind power potential:
• Recorded potential is only moderate at best, though
data is insufficient ;
Average
speed m/s
5.6 – 8.0
4.6 – 5.6
3.6 – 4.6
0 – 3.6
• Potential contribution to power generation in SA may
be significantly higher – improved wind atlas being
developed;
• Potential (average speed) directly affects unit cost;
• Some areas in east and north Africa seem to have
higher wind power potential than South Africa.
Major challenges facing the domestic
wind power industry:
• Transmission infrastructure / grid connection;
• Regulatory framework, progress, support ;
• Wind energy expected to be competitive by 2020.
7
Case study – wind power generation:
Opportunities and strengths
General opportunities & strengths
include:
• Promising REFIT tariff, ‘free’ power source, little water
needed.
• Tested technologies, improving competitiveness.
• Commissioning – short period, generating units
separately completed.
• Strong investor interest – many proposed projects in
pipeline, involving both global & local players.
• Existing manufacturing capacity, demand-driven
expansion potential.
• New components manufacturing potential.
• African markets.
• Support from global institutions (UNDP, GEF, IFC).
8
Case study – wind power generation:
Potential involvement of local industries
Local industries: Potential capacity to contribute
Industry
Product
Capacity
Construction & civil engineering
Foundation laying, tower erection, housing
Sufficient
Manufacturing:
• Steel & metal products
• Glass fibre & composites
• Electrical equipment
• Machinery
Towers, frames, hubs, brakes, other parts
Rotor blades, nacelle housing
Generators, transformers, cables, other parts
Shafts, bearings, gears
Very good
Good
Good
Limited
Electricity distribution
Grid connection
Good
Electricity generation
Operation & maintenance
Good
Logistics
Transporting mega-parts on rough terrain
Challenging
• Local manufacturing capacity (see next slide) can be promoted through engagement with established
global manufacturers.
• Significant opportunity exists in construction and manufacturing activities targeting other African
markets with higher/good wind power potential.
9
Case study – wind power generation:
Manufacturing wind turbines
Composition of typical 5 MW wind turbine in terms of cost share
Part
Purpose
Tower
Rotor blades
Gearbox
Power converter
Transformer
Generator
Main frame
Pitch system
Main shaft
Rotor hub
Nacelle housing
Brake system
Yaw system
Rotor bearings
Screws
Cables
All parts
Provide height
Wind force surface
Increase rotational speed
Convert to alternate current
Increase voltage to grid's
Converts energy to electricity
Supports entire turbine train
Adjusts blade angles
Transfer rotational force
Holds blades
Covers whole drive train
Bring turbine to a halt
Rotates nacelle to face wind
Carry axes
Holds components in place
Link turbine to sub station
Source: EWEA
% share
29.4
24.9
14.5
5.6
4.0
3.9
3.1
3.0
2.1
1.5
1.5
1.5
1.4
1.4
1.2
1.1
100.0
Material usage
Sections of rolled steel, lattice structure or concrete
Moulded glass fibre/carbon & epoxy/pol. composites
Special steel
Various metals and other materials (electronics)
Various metals and other materials (electronics)
Various metals and other materials (electronics)
Steel
Various
Special steel
Cast iron
Glass fibre
Steel and composites
Steel
Special steel
Metal
Copper and plastics
10
Case study – wind power generation:
Estimating the job creation potential in SA
Job creation potential: A range of research results
Country / area
Number of
jobs per MW
Note
Global
3.3
Aggregate 400 000 jobs in a 120 GW industry
USA
3.4
Aggregate 85 000 jobs in a 25 GW industry
European wind industry
2.5
Aggregate 160 000 jobs in a 64 GW industry
Europe (WWF)
0.4
Only operations & maintenance
Literature averages (AGAMA)
• Manufacturing
• Installation
• O&M
• Other
4.8
3.2
0.5
1.0
0.1
Derived from a range of sources
South Africa:
DME / UNDP / GEF
DME
3.1*
3.6 - 7.4*
SA Wind Energy Programme, 2003
Capacity Building in Renewable Energy, 2004
* Jobs per GWh including indirect jobs
11
Case study – wind power generation:
Estimating the job creation potential in SA
Number of jobs
Results:
5,000
4,000
3,000
2,000
1,000
0
Conservative
scenario
Optimistic
scenario
Other
African
projects
Short-term
1 x 100MW
3 x 100MW
0
Medium-term
4 x 150MW
5 x 200MW
3 x 150MW
Medium-term job creation
Long-term
7 x 200MW
9 x 300MW
5 x 150MW
Domestic
Africa
Aggregate
2 100MW
4 000MW
1 200MW
Con
Man
O& M
Number of jobs
Conservative
O& M
Con
Number of jobs
Con
Man
Optimistic
Man
O& M
Conservative
5,000
4,000
3,000
2,000
1,000
0
Domestic
Domestic
Africa
O& M
5,000
4,000
3,000
2,000
1,000
0
New capacity created in terms of wind farms
Short-term job creation
Con
Man
• Manufacturing numbers based on:
Optimistic
– Share of parts in turbine cost (see composition of parts table);
– Competitiveness of their domestic industries (high, medium, low);
– Increasing penetration of local manufacturing (40%, 60%, 80%).
Long-term job creation
Domestic
Africa
O& M
Con
Conservative
Man
O& M
• Jobs estimates using employment intensity/MW of 3.2, 1.0 &
0.7 for manufacturing, construction and O&M, respectively.
Con
Optimistic
Man
• South Africa’s future capacity ceiling will determine
– Depends on IRP, expectations being only 2 000MW – 2 500MW
12
Case study – wind power generation:
Potential jobs estimates
Number of jobs (conservative scenario)
Short-term
Medium-term
Long-term
O&M
70
490
1 470
Construction
120
890
1 890
Manufacturing
92
1 081
3 626
Totals
282
2 461
6 986
Number of jobs (optimistic scenario)
Short-term
Medium-term
Long-term
O&M
210
910
3 010
Construction
360
1 310
3 410
Manufacturing
277
1 635
6 027
Totals
847
3 855
12 447
Concluding remarks
• Substantial, yet preliminary, estimation work undertaken on :
– Energy generation: solar PV; solar CSP; wind; hydro (small & large); wave and tidal;
landfills; pyrolysis; biomass combustion; biofuels; and nuclear.
– Energy efficiency: solar water heaters; light bulbs; insulation; cleaner stoves.
• Estimation work yet to be undertaken on:
– Emissions control.
– Biodiversity.
Need for substantial testing with key role players.
Day Month Year
Thank You
The Industrial Development Corporation
19 Fredman Drive, Sandown
PO Box 784055, Sandton, 2146
South Africa
Telephone (011) 269 3000
Facsimile (011) 269 2116
E-mail [email protected]