Will the energy transition create jobs?

   Remember that in France, the law on the « energy transition for a green economic growth », which is being voted by the parliament, wishes to establish a « new French energy model ». Its ambitions are important: fighting against global warming, enhancing France’s energy independence and creating employment (see in this connection Futuribles Vigie Forum published in September 2014, www.futuribles.com ). It supposes that: – a 30% reduction of fossil fuel consumption and 40% of greenhouse gases emissions are feasible for France in 2030 compared with 1990 (an EU target) with their division by a factor of four in 2050. It also aims at increasing the renewables share in final energy consumption (from 23% in 2020 to 32% by 2030) and halving French final energy consumption by 2050. This law is also incentive as it includes measures to promote thermal renovation of buildings (they consume 44% of final energy) which is an important factor in energy conservation with a renovation objective of 500 000 housings per year by 2017. As far as transport (32% of final energy) is concerned, electric vehicles are considered as a priority. Regarding electricity generation, it should be provided by 40% of renewable energy in 2030 (instead of 17% in 2013), the nuclear share falling to 50% in 2025 (instead of 75% presently). In the background, one sees major sectors that are likely to be job providers: energy efficiency, thermal renovation of buildings, transport and renewable energy. Decisions taken in recent years, on the occasion of the « Grenelle de l’environnement » (meetings bringing together the actors of the energy transition, except, it must be noted, research agencies and scientific societies) have prepared the ground by proposing goals that were enshrined in the law in 2014. We can already make a provisional assessment of the employment evolution in the energy sectors, at least since 2006. In a recent and comprehensive report the Agency ADEME (French Agency for Environment and Energy Management, “Energy saving and renewable energy development state of market places and jobs”, Study No. 43 April 2015 www.ademe.fr ), has looked back on the period 2006 to 2013 by focusing on thirty market segments (energy renovations in existing buildings, passenger cars, public transport, facilities for renewable energy, etc.). The agency made several findings. It notes, first of all, a positive development but with seasaw like markets: strong Solarthermische Parabolrinnenkraftwerke Andasol 1 und 2growth for energy improvement techniques and development of renewable energies (REn) over 2006-2009 (+ 13.5% year), weak growth (4.1% per year) between 2009 and 2011 under the impact of the economic crisis, a sharp rebound between 2011 and 2013 (+ 7.1% per year on average). The report notes recent and positive developments in three areas which are energy transition motors: – growth of the installed capacity of REn park (wind and solar in particular) has pushed up electricity sales (including hydropower) – dynamism in rail infrastructures and public transport on separate lane (including tramways) – dynamism for energetically efficient facilities for households. Last observation, but not so positive: investments in photovoltaics solar and wind power have fallen sharply in the two recent years, in contrast with those for renewable heat infrastructures which were rising. Solar with concentration has not yet been developed in France (photo: solar concentration  power station Andasol in Spain). Looking at statistics for direct employment on the 2006-2014 period in the areas of energy efficiency and renewable energy, they are « globally positive » since jobs grew from 200 000 in 2006 to 321 000 in 2014. The increase was marked during a period, it must be remembered, of rampant economic crisis. Growth was strongest in sectors related to the improvement of energy efficiency where jobs have gone from 141,000 to 237,000 over the same period (with a doubling in transport and an increase of nearly 50% in the residential sector). Progress is less clear for renewables where they grew from 36,000 to 47,000 for equipment and installation markets, jobs related to energy sales have also risen sharply but remained low (37 000 in 2014). One observes however, that after a peak in 2010, employment in the REn equipment sector has fallen sharply since then, from 70 000 to 47 000 jobs, the photovoltaic industry suffering a real collapse, dropping from 31 500 jobs to 8500 between 2010 and 2014. The market for heat pumps is also experiencing a sharp drop while the thermal solar did not take off and even regresses; wood industry has been maintained but biofuel production units fell sharply. One can draw a first lesson from this assessment: the area covering techniques for improving energy efficiency is probably the most promising in terms of job creation while having less impact on the French energy equipment trade balance (unlike solar photovoltaics), which meanwhile became negative in 2009 (a deficit of € 2 billion in 2014). These figures should lead to a highly more nuanced discourse on the capacity of job creation by renewable energy techniques. A global assessment of jobs in the energy sectors at large should take into account the nuclear one (about 125 000 direct jobs), which is a net exporter but recently in the middle of a serious industrial crisis. The debate on the energy transition economic impact is not specific to France, it is also taking place in Germany as shown by a recent report upon the French and German energy strategies made public by OPECST, an office of the French parliament, (OPECST, The German energy transition : what lessons for the French energy one?, Report by J-Y. Le Déaut and B. Sido, February 2015, www.assemblee-nationale.fr/opecst  See also, P.Papon,“Can we draw lessons from the German energy transition?” Futuribles,No 406, p.89,mai-juin 2015 www.futuribles.com) .  In the framework of its energy policy, Germany gives a clear priority to renewable energy which is unquestionably respected: renewable energy accounted for nearly 25% of electricity production in 2014 (13% for wind and solar power, the rest from hydropower and biomass), eight nuclear plants were closed in 2011, the target for 2020 (35% renewables) will likely be reached. OPECST stresses that regarding renewable energy development the balance is clearly positive for employment (about 400 000 jobs created in the sector and almost twice as much in the energy efficiency sector in ten years); it is better than in France. However the German photovoltaic industry collapsed almost completely in front of Chinese competition (80% of solar panels are imported from China) and, in 2013, 40,000 jobs were lost (Germany nonetheless retaining the quarter of the wind turbines world market). The assessment in terms of employment of an energy transition policy must be nuanced for the time being. Improving energy efficiency will probably be the fastest growing sector in terms of job creation in the next ten years. An industrial strategy in the REn sector is pending in France, it would aim both at putting equipment on the market and at creating jobs (especially for a « new solar »). We must not also forget that the energy transition must take into account the benefit which represents for the economy (businesses and households) a rather low cost energy, industry must also aim to reduce the REn cost, which also supposes increasing the research effort.




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