Presentation on theme: "Estimating the potential impact of a greening economy on job creation Day Month Year Green Economy Summit Sandton, 19 May 2010 Jorge Maia Head: Research."— Presentation transcript:
Estimating the potential impact of a greening economy on job creation Day Month Year Green Economy Summit Sandton, 19 May 2010 Jorge Maia Head: Research & Information Industrial Development Corporation
Introduction to the IDC/DBSA research project 2 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.
Moving away from an overwhelming dependency on fossil fuels (especially coal) for energy generation in SA, towards alternative energy sources: 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.) Improvement in soil and land quality Reduced economic activity in several sectors (e.g. machinery & equipment, chemicals etc.), via linkages, due to lower coal mining production over time Improved water and air quality Increased water availability 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. Transportation of cleantech materials Transport of export coal to ports. Road usage: reduced congestion & infrastructural damage. Transportation services activity (rail & road) from coal mines to power stations Regional shifts i.t.o. investment, GDP, jobs - ve impact + ve impact Introduction to the IDC/DBSA research project (cont.)
Estimating the economy-wide impact Assessing the impact of introducing alternative/renewable energy sources & cleantech New investment required Demand for investment related goods and/or materials during construction 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 Cleaner energy generation/ technology application and operational phase 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) Adoption of “greener” technologies 4 Export potential Export potential
Process of determining employment potential Technological application/resource management (energy generation, energy efficiency, emission control, biodiversity) Construction Manufacturing Operation & maintenance Short-term jobs opportunities Local potential Export potential Local potential Export potential Local potential Export potential Medium-term jobs opportunities Long-term jobs opportunities 5
Technically, wind power has the largest RE generation potential after solar. Growth in global wind power generation capacity has been almost exponential. 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: –Not yet competitive, although continuously improving; –Depend on available wind power, backup capacity needed; –Logistics for construction; –Grid connection. Case study – wind power generation: Growth and challenges Cumulative global wind power generation capacity 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 ; 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
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 IndustryProductCapacity Construction & civil engineeringFoundation laying, tower erection, housingSufficient 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 Limited Electricity distributionGrid connectionGood Electricity generationOperation & maintenanceGood LogisticsTransporting mega-parts on rough terrainChallenging 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 PartPurpose% shareMaterial usage 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 Sections of rolled steel, lattice structure or concrete Moulded glass fibre /carbon & epoxy/pol. composites Special steel Various metals and other materials (electronics) Steel Various Special steel Cast iron Glass fibre Steel and composites Steel Special steel Metal Copper and plastics Source: EWEA 10
Case study – wind power generation: Estimating the job creation potential in SA Job creation potential: A range of research results Country / areaNumber of jobs per MW Note Global3.3Aggregate jobs in a 120 GW industry USA3.4Aggregate jobs in a 25 GW industry European wind industry2.5Aggregate jobs in a 64 GW industry Europe (WWF)0.4Only operations & maintenance Literature averages (AGAMA) Manufacturing Installation O & M Other Derived from a range of sources South Africa: DME / UNDP / GEF DME 3.1* * SA Wind Energy Programme, 2003 Capacity Building in Renewable Energy, 2004 * Jobs per GWh including indirect jobs 11
New capacity created in terms of wind farms Domestic Other African projects Conservative scenario Optimistic scenario Short-term1 x 100MW3 x 100MW0 Medium-term4 x 150MW5 x 200MW3 x 150MW Long-term7 x 200MW9 x 300MW5 x 150MW Aggregate2 100MW4 000MW1 200MW Jobs estimates using employment intensity/MW of 3.2, 1.0 & 0.7 for manufacturing, construction and O&M, respectively. Manufacturing numbers based on: –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%). South Africa’s future capacity ceiling will determine –Depends on IRP, expectations being only 2 000MW – 2 500MW Results: 12 Case study – wind power generation: Estimating the job creation potential in SA
Number of jobs (conservative scenario) Short-termMedium-termLong-term O & M Construction Manufacturing Totals Number of jobs (optimistic scenario) Short-termMedium-termLong-term O & M Construction Manufacturing Totals Case study – wind power generation: Potential jobs estimates
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.
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