Kaplan University School of Professional and Continuing Education Kaplan University School of Professional and Continuing Education

Renewable Energy and the Creation of Permanent Jobs

Little introduction is needed to the debate about the Keystone Oil Pipeline which was postponed via President Obama’s executive order. Nor has the controversial proposed pipeline been lacking in public commentary (over 1 million comments, some of which can be found here). The nexus between the overall health of the world economy, the future of the world's energy supply, and sustained jobs is perhaps one of the most diabolical challenges of the modern era.

It is thus imperative to step back and take a concerted, informed examination of this nexus. The high price of renewable energy and the lack of concrete evidence of the industry’s ability to create jobs are cited as two primary reasons not to put forth stronger government policy during the current economic downturn. Many people argue: “renewables are great, but let’s wait until the prices come down”; or, “the creation of jobs is a myth and frequently exaggerated.” Fervent supporters of conventional energy argue that the Keystone Oil Pipeline is needed to create many jobs and energy today. But what kind of jobs will these be and will they be permanent? Although the pipeline will clearly create a large amount of short-term construction jobs, merely 35 permanent jobs are predicted by the US Government. On the other side of the debate lies the opinion that the renewable energy industry can and does create jobs that are permanent and employ high-skilled laborers; high-skilled positions, in comparison to short-term construction jobs, invariably add more value to the economy. However, this claim is often arbitrarily made without concrete evidence.

Where are the jobs? What constitutes a job in the renewable energy industry? How can these be sustainable after, for example, wind turbines have been completed? What does the renewable energy supply chain look like? An interesting case to begin unpacking these complex questions occurs in Portugal. This country has surprised many, including European policymakers, by implementing a vast amount of renewable energy in a small time period (36% of the country's final energy consumption is powered by renewable energy—one quarter of which is comprised of wind energy). The Portuguese renewable energy economy may serve as a counterargument against the Keystone Pipeline because it offers concrete evidence that these jobs are highly-skilled and permanent. The construction of an oil pipeline offers a small amount of long term jobs because, once constructed, the pipeline is used to simply push conventional energy through. On the other hand, renewable energy technology requires maintenance, monitoring, training, dissemination, and other innovations. Such jobs are permanent and more numerous than conventional energy jobs. The Portuguese example offers a clear picture of the renewable energy industry’s capacity to create and sustain jobs. A reasonable estimate of the amount of jobs created from the renewable energy and energy efficiency industry is 55,000-65,000 (in a country with only ten million people that is nearly 10% of the workforce). Though each country is unique and encounters its own set of problems associated with energy creation and supply, the data from Portugal offers some answers to the debate for or against renewable energy in a sluggish economy. Accurate data has been kept about the renewable energy sector in Portugal,due partly to government policy and also to the utility EDP (Energias de Portugal), which was once government-owned before the 2011 “troika” of bailout loaners (ECB, EC, IMF). Portugal's crowning political and industrial achievement in the renewable energy economy occurred with the development of the “Wind Energy Industrial Cluster”, created in 2005 by a consortium of companies including Enercon, neo energia, Finerge, Generg SGPS, Sonae.

The energy cluster consists of 29 companies surrounding the core Enercon wind turbine factory manifested from the idea to transform an old industrial center, which had fallen into decadence since the 1980s, into a wind energy industrial center whereby all design, production, shipping—in short, all wind turbine construction, was confined to the area. The ramifications of this innovative policy idea are numerous. Portugal’s impetus for changing their energy sources came from the fact that nearly 50% of its debt was tied to conventional energy sources. From the years 2004 through 2009, Portugal installed on average 500 MW of wind power, due in large part to the innovation, design, and manufacturing of wind technology in the industrial cluster. At the same time, renewable energy as a percentage of primary energy grew from 17% to 45% of total energy sources. A Harvard Kennedy School paper estimated that $1 million in spending on energy will create 5 jobs in conventional energies and 17 jobs in renewable energy.

Similarly, another study (by Pollin, Heintz, and Garrett-Peltier 2009: 30) shows that spending a given amount of money on a clean-energy investment agenda generates approximately 3.2 times the number of jobs within the United States as does spending the same amount of money within the fossil fuel sectors. In the U.S. In 2011 the wind industry accounted for 75,000 direct jobs (and this excludes thousands more indirect jobs). Is it still fair to deem renewable energies too costly and without economic benefit in light of the Portuguese experience? With clear and unambiguous data, it becomes clear that renewable energy is among the only growing industries in a sluggish economy in Portugal. Perhaps some other countries may learn from this experience, and begin to understand that less importing of conventional energies must inherently mean a stronger balance of payments for its government.The time is due to clarify our views about conventional energy and job creation. There is no better time to dissect the nexus between the overall health of the world economy, the potential increase in human health resulting from the integration of more renewable energy, and the creation of jobs.

The Keystone pipeline will create jobs but let us understand that the bulk of these jobs will be short-lived. On the other hand, significantly increasing renewable energy in the U.S. will, without question, create permanent jobs which will undoubtedly power our economy forward into the 21st century.