Renewables & energy saving create most jobs

Renewable energy has the potential to create twice as many jobs as nuclear, and three times as many jobs per million pounds invested compared to gas or coal power, while investment in energy efficiency can create five times as many. So says a new UK Energy Research Centre study of Green Job Creation, based on a new review of the literature. 

It’s an update to their earlier 2014 low carbon energy & employment study. That was a bit more cautious about making final pronouncements, since, it said , it was difficult to assess net economy-wide impacts over time. For example, though some sectors might benefit more than others, if there was full employment, new investment was unlikely to create extra jobs net of any losses. A bit sniffily it said  ‘the proper domain for the debate about the long-term role of renewable energy and energy efficiency is the wider framework of energy and environmental policy, not a narrow analysis of green job impacts.’

It certainly can be tricky to do meaningful job creation sums, as I found out way back in 1979, when I produced a study for CAITS, the Centre for Alternative Industrial Technology Systems, entitled ‘Employment Options and Employment’. It was pretty crude, using simple job multipliers and the limited data on renewables available then . It concluded nevertheless that a non-nuclear UK programme based on renewables, energy saving and CHP, would create around 2.5 times more jobs than one based on nuclear. It was challenged at the time as unreliable. However, even though it may have been rather simplified, it seems I got the conclusions nearly right, though UKERC now puts the green job gains higher, in jobs per £ invested terms, depending on the mix, with coal, gas and nuclear coming out the worst deals. 

The updated UKERC study presumably benefits from the fact that the costs of wind and solar are now much better known, and much lower than was expected, whereas the cost of nuclear has risen. So, despite their lower load factors, you get more energy per pound invested in renewables than in nuclear. Translated into jobs/£, UKERC says that means ‘renewables or energy efficiency can generate more jobs per £ invested than fossil fuel generation or nuclear power. Fossil fuel generation creates three jobs on average per £million invested, compared to five jobs/£million for nuclear power and 10 jobs/£million on average for the renewable energy technologies shown in the chart. Energy efficiency demonstrates the highest job multiplier per investment, creating 16 jobs/£million on average’. 

There are still some issues though. The UKERC says that these differences may not be long-lived. Over time, interactions with the rest of the economy may lead to diffused and maybe differing outcomes. The report says ‘There is a debate in the literature around the extent to which policies supporting renewable energy may contribute to longer term economic growth, notwithstanding short-term employment and growth benefits. Jobs created per unit of investment represent only one aspect of a low carbon transition; what matters in the longer-term is whether the investment contributes to an economically efficient transition towards a country’s strategic goals, considering environmental impacts and energy security’.

Location is another issue- not all job gains may be local or even national. The UKERC says ‘much greater standardisation of methods would be desirable in order to compare how many jobs can be created by policies supporting low carbon energy and energy efficiency, both at a project scale and a wider societal level’, with there being ‘a relative paucity of metrics and data measuring quality, skills, and geographic distribution aspects of low carbon energy job creation’.

There is also the more general issue of whether some technologies are just cheaper and more labour intensive than others- and also perhaps need less skill. e.g. installing bulk insulation.  A recipe for low paid jobs? And also perhaps just temporary jobs?  The UKERC note that  ‘direct employment in renewable energy manufacturing, construction or installation has been linked to temporary or short-term work which expires on completion of specific projects or might no longer be needed once renewable energy capacity targets have been met’. 

However, it does add that ‘meeting the UK’s net zero target implies a continuous need for manufacturing and construction jobs over several decades to build the new renewables capacity required to meet likely greater demands for electricity from heat and transport decarbonisation’ and it notes that ‘employment in the operation and maintenance of power generating technologies is typically more permanent, lasting over technology lifetimes’.

Nevertheless, employment analysis is still not a precise science and there do still seem be some differences in view amongst the various studies . For example UKERC notes that ‘a well cited [2010] literature review of direct, indirect and induced employment factors over technology lifetimes in the US and Europe indicates high job creation potential for solar PV at 0.87 job-years/annual GWh, compared to 0.17 and 0.14 job-years/annual GWh for wind and nuclear power respectively, and 0.11 job-years/annual GWh for natural gas and coal generation. The ‘equivalent’ value for energy efficiency is 0.38 job-years/annual GWh saved’.  Is PV solar really the best- and over two times better than energy saving? Once installed, PV needs few supporting jobs, but then again insulation needs even less. 

In the final analysis, it may not be just the quantity of jobs that matter, but also the quality. The UKERC report says ‘it is desirable that a low carbon transition should create quality jobs, which are characterised in the literature in terms of adequate wages and employee rights, full-time employment, safe working conditions, and permanent rather than temporary jobs’. And it rightly draws attention to the need for skill development and training: ‘Green skills supply and demand, including access to and provision of training and apprenticeships, will need to be carefully co-ordinated with policies supporting green job creation’. 

However, some awkward policy issues remain to be resolved. For example, the study concludes that investment in nuclear power creates less jobs than investment in renewables or energy saving, so, if jobs creation is important, why is the UK is backing nuclear so strongly? Is it because investment in nuclear may create more higher paid jobs? The study also shows that biomass creates the highest number of jobs/£ invested (apart from energy saving), and while that may well be true, in jobs/GW terms, during conversion plant construction, it may be even more the case in jobs/MWh terms during subsequent biomass plantation operation- essential we are talking about a lot of labour-intensive energy crop growing and harvesting work. Is that what we want to focus on?  Then again the data suggest that, while energy efficiency in buildings creates the most jobs/£ by far, and biomass is the next highest, hydro also offers a large number of jobs/£- more than wind or solar PV. Geothermal also does quite well.  So which to choose?

In reality, we can’t just chase for the optimal number of green jobs. The choice of technology will be made mostly on the basis of a range of other issues- although, as UKERC says, job quality is also important if we want to move to a socially and environmentally sustainable future, a point I have developed in a recent study. We need good, sustainable jobs as part of a global ‘just transition’.