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Impact of renewable energy on jobs and growth

Gesellschaft für Wirtschaftliche Strukturforschung mbHHeinrichstr. 30 ° D – 49080 OsnabrückTel.: + 49 (541) 40933-0 ° Fax: + 49 (541) 40933-11Email: wolter@gws-os.de ° Internet: www.gws-os.de

Ulrike Lehr, Marlene Kratzat, Dietmar Edler, Christian Lutz

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2 Studies up to now, 3rd currently in progress

Commissioned by

German Federal Ministry of the Environment

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What are the effects considered?

Time(2004-2030)

? ?+

Increase RES

Prices

„Substitutio “„Budget “

Exports/Imports

++

+

- Neg. effects

Net

++

++

-Fossil

EE+

- +

++

„Substitution “„ “

++

+

-

++

++

-RES

- +

++

Investment and O&M

Gross employment

Trade

-

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How do we quantify these effects?

Investment in RES

O&M

Investment in fossil fuel facilities

Export of RES facilities

Import of RES facilities

Impact on employment

Impact on economic indicators, balance

Base year 2004: statistical data, survey, base year 2007 survey in progress

Future: Scenarios

Input-Output-Tables

Macro-economic model: PANTA RHEI

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Earlier studies have shown the economic impacts of an increase in RES compared to the current BAU case.

• But how much did the overall support of RES cost

and what were the benefits?

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The overall effect

Economic effects = the difference between a quantity under one set of

framework conditions compared to another set.

Therefore:

Construct reference scenario without any external support of RES.

Has to be speculative!

Base year of the development: 1995

Energy supply = fossil fuels in the “ZERO”-scenario Economic

Indicators, energy demand and the phasing out of

nuclear = BAU

Wind and biomass from 1995 (2 TWh/a) contribute until 1025 reflecting

their life time.

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A ZERO support scenario

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Scenarios

The analysis is based upon the following set of scenarios:

1. a German target oriented scenario (TOS) that comes close to reach

the national target of a 40% (2030) or 80% CO2 reduction by 2050,

respectively (BMU04, Leit06, BMU05)

2. a reference scenario that describes a “frozen” state, where no support

of RES took place and which derives from the prolonged development

up to 1995,

3. international scenarios (reference and dynamic current policy) (IEA-

REF04, EREC-DCP04) and

4. the dominant scenario for the development of exports from Lehr et al.

2008 and BMU 2006.

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Differences between TOS and ZERO

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Data requirements to implement the new sector

„Production of facilities using renewable sources“

Information concerning the structure

• Important inputs

• Information on sub-suppliers

• Production plan

• Imports of inputs

• Exports

Technical details of facilities

• Components and modules

• Engineering data

Production in I-O-T

Survey Technology data/ Economic data

Additional Information from I-O-Tables

• “unimportant” inputs

• Structure of similar productions

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Data: The survey

Summer 2005

Approx. 1,100 interviews

Institut für Sozialforschung und Kommunikation

Telephone interviews

Questions on:

Employment (qualification, M/F, FT/PT)

Turnover (national/international input, end product,

regional aspects)

Origin of inputs (type, region)

Expectations on future development

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- 5,00 10,00 15,00 20,00 25,00 30,00 35,00

Other mining and quarrying

Manufacture of coke, refined petroleum products and nuclear fuel

Manufacture of plastic products

Non-ferrous metals

Products from foundries

Manufacture of chemicals

Manufacture of fabricated metal products

Manufacture of machinery and equipment

Manufacture of electrical machinery and apparatus

Manufacture of radio, television and communication equipment

Manufacture of medical, precision and optical instruments

Manufacture of other transport equipment

Preparation in construction

Wholesale trade and commision trade services

Land transport and transport via pipeline services

Air transport services

Supporting and auxiliary transport services

Financial intermediation services

Real estate services

Research and development services

Sewage and refuse disposal services

in %

of G

PV

current sector wind PV

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Gross Employment in RES Industries, Germany 2004, 2006, 2007

3.400

9.500

56.800

63.900

4.300

9.400

95.400

82.100

4.300

4.500

9.400

96.100

84.300

25.100

1.800

40.200

4.200

50.700

0 10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000 100.000 110.000

Geothermal

hydro

Solar

Biomass

Wind

Source: BMU Vorhaben: "Kurz- und langfristige Auswirkungen des Ausbaus der erneuerbaren Energien auf den deutschen Arbeitsmarkt",

Zwischenbericht März 2008

increase: rd. 55 %

R&D, pub. admin

0

100.000

200.000

300.000

2004 2006 2007

160.500

jobs

235.600 249.300

jobs jobs

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Shares of German firms in the world market (in %)

In % 2004 2010 2020 2030 2010 2020 2030

Cautious development

Cautious optimistic development

Power 20,3 13,08 10,00 6,46 14,9 12,79 9,63

Heat 9,36 8,62 6,93 5,45 9,26 7,83 6,54

Total 17,04 11,95 9,39 6,24 13,47 11,81 8,95

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Gross employment (direct and indirect) 2004 bis 2030

Projection of productivityProjection of the direct/indirect ratioScenarios

2004 2010 2020 2030

Cautious Employees

Production of facilities and biomass 106.392 167.803 217.092 210.971

O&M 37.389 46.867 50.264 55.779

Fuels 13.293 29.432 39.335 66.098

Sum 157.074 244.102 306.691 332.848

Cautious optimistic

Production of facilities and biomass 106.392 186.595 263.943 293.133

O&M 37.389 46.867 50.264 55.779

Fuels 13.293 29.432 39.335 66.098

Sum 157.074 262.893 353.541 415.010

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Net effects I

Budget effect from additional costs of RES: e.g. PV

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Period PP CHP Total Add. Comp. TOS.

1995 – 2000 2.478 557 3.034 3.034

2001 – 2010 9.336 7.513 16.849 8.298

2011 – 2020 15.042 16.078 31.120 9.718

2021 – 2030 9.716 9.942 19.658 9.019

Total 1995 – 2030 36.572 34.090 70.662 30.069

Total investment for ZERO and comparison to TOS

Net effects II

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States16 StatesSince 1998

World Trade Model(53 countriesand regions)

France

...

UK

JapanINFORGE59 SectorsSince 1995

BranchesSince 1996

REGIOSince 2004

PANTA RHEI

Energy undEnvironmentSince 1997

USA

GINFORSSeit 1998

Modeling Environment

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PANTA RHEI – macro-econometric model

Demand(consumption, Exports,

Investment)

Inputdemand

Production Imports

energyprices

Prices fromproduction

addedvalue

&

employment

Productivity

income wages

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Results

2010 2015 2020 2030

GDP billion €95 15,30 18,95 26,36 34,58

Gross production billion €95 38,58 48,32 63,34 80,27

Private consumption billion €95 6,70 9,96 13,36 19,65

Government billion €95 1,45 1,67 2,55 3,54

Investment construction billion €95 0,75 1,02 1,54 1,59

Investment equipment billion €95 5,66 4,47 5,91 7,84

Export billion €95 7,08 10,02 13,26 16,67

Import billion €95 6,59 8,49 10,70 15,33

Public debt billion € -33,39 -64,67 -115,05 -283,98

Average wage € 0,14 0,17 0,19 0,21

Consumer price index 1995=100 0,35 0,37 0,17 -0,20

Labor 1000 0,20 0,12 0,16 0,22

Source: BMU07

Changes of important economic indicators in the TOS – absolute values from ZERO

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Thank you for your attention!

For more:www.gws-os.delehr@gws-os.de