International Energy Agency roadmap for a sustainable recovery forecasts job growth led by retrofitting and electricity

The International Energy Agency, in cooperation with the International Monetary Fund, released a roadmap which would require global investment by governments of USD 1 trillion annually between 2021 and 2023 to create jobs and accelerate the deployment of clean energy technologies and infrastructure.  The World Energy Outlook Special Report: Sustainable Recovery , released on June 18th states:  “Through detailed assessments of more than 30 specific energy policy measures to be carried out over the next three years, this report considers the circumstances of individual countries as well as existing pipelines of energy projects and current market conditions.” The report data and analysis will form the basis for the IEA Clean Energy Transitions Summit on July 9 2020, where decision-makers in government, industry and the investment community will meet to discuss policy options for economic recovery post Covid-19.

From the report: ” Our new IEA energy employment database shows that in 2019, the energy industry – including electricity, oil, gas, coal and biofuels – directly employed around 40 million people globally. Our analysis estimates that 3 million of those jobs have been lost or are at risk due to the impacts of the Covid-19 crisis, with another 3 million jobs lost or under threat in related areas such as vehicles, buildings and industry. “ The recommendations promise to save or create approximately 9 million jobs per year, with the greatest number in building retrofitting for energy efficiency, and in the electricity sector.  The Sustainable Recovery Plan also seeks to avoid the kind of rebound effect which occurred after the 2008/2009 recession, claiming that it would stimulate economic growth while achieving annual energy-related greenhouse gas emissions which “would be 4.5 billion tonnes lower in 2023 than they would be otherwise”,  decreasing air pollution emissions by 5%, and thus reducing global health risks.

Under the heading of “Opportunities in technology innovation”, the report examines four specific technologies: “hydrogen technologies, which have a potentially important role in a wide range of sectors; batteries, which are very important for electrification of road transport and the integration of renewables in power markets; small modular nuclear reactors, which have technology attributes that make them scalable as an important low-carbon option in the power sector; and carbon capture, utilisation and storage (CCUS), which could play a critical role in the energy sector reaching net-zero emissions. We also compare the near-term job creation potential of some of these measures.” The IEA is preparing an Energy Technology Perspectives Special Report on Clean Energy Technology Innovation, which will be released in early July 2020.

Global reports call for renewables to lead a green recovery from Covid-19

Renewable Power Generation Costs in 2019 was released on June 2 by the International Renewable Energy Agency (IRENA), showing that “more than half of the renewable capacity added in 2019 achieved lower power costs than the cheapest new coal plants.” The analysis spans around 17,000 renewable power generation projects from around the world, and includes discussion of job impacts in the industry. A statistical dashboard is searchable by country  , including Canada, and by jobs statistics.

The report emphasizes the importance of renewables in a global economic recovery strategy, stating:

“Renewables offer a way to align short-term policy action with medium- and long-term energy and climate goals.  Renewables must be the backbone of national efforts to restart economies in the wake of the COVID-19 outbreak. With the right policies in place, falling renewable power costs, can shift markets and contribute greatly towards a green recovery.”

On June 10, the Global Trends in Renewable Energy Investment report was released by the U.N. Environment Programme, with a press release  with a similar message:  “As COVID-19 hits the fossil fuel industry, the GTR 2020 shows that renewable energy is more cost-effective than ever – providing an opportunity to prioritize clean energy in economic recovery packages and bring the world closer to meeting the Paris Agreement goals. ….. In 2019, the amount of new renewable power capacity added (excluding large hydro) was the highest ever, at 184 gigawatts, 20GW more than in 2018.” The 80-page Global Trends in Renewable Energy Investment  is an annual report commissioned by the UN Environment Programme in cooperation with Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance, produced in collaboration with Bloomberg NEF, and supported by the German Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety.

The argument for the cost advantage of clean energy is demonstrated with detailed modelling for the United States by researchers at the University of California Berkeley Goldman School of  Public Policy. Their new report,  2035: The Report: Plummeting solar, wind and battery costs can accelerate our clean electricity future  “uses the latest renewable energy and battery cost data to demonstrate the technical and economic feasibility of achieving 90% clean (carbon-free) electricity in the United States by 2035. “The 90% Clean case avoids over $1.2 trillion in health and environmental costs, including 85,000 avoided premature deaths, through 2050”… and “ supports a total of 29 million job-years cumulatively during 2020–2035. ….These jobs include direct, indirect, and induced jobs related to construction, manufacturing, operations and maintenance, and the supply chain. Overall, the 90% Clean case supports over 500,000 more jobs each year compared to the No New Policy case.”

renewables 2020Another report,  Renewables 2020 Global Status Report   was released by REN21 on June 16, with a  36-page summary of Key Findings . The report provides detailed global statistics re capacity and investment trends, and  also discusses the considerable impact of the coronavirus. There is much good news – for example, over 27% of global electricity now comes from renewables, up from 19% in 2010…. The share of solar photovoltaic (PV) and wind power has grown more than five times since 2009” .  But there is also an urgent call to end fossil fuel subsidies and for other policy actions under the heading: “Momentum in renewable power hides a profound lag in the heating, cooling and transport sectors”.  The report states:

“It would be short-sighted to celebrate advances in the power sector without acknowledging the alarmingly low shares and slow uptake of renewables in the heating, cooling and transport sectors. …. Renewable shares in heating and cooling are low (10.1%) and struggle to increase, even as the sector accounts for more than half of total energy demand. Similarly, energy demand in transport – which accounts for a third of total energy demand – is growing the fastest by far, yet renewable shares barely exceed 3.3%. Ongoing dependence on fossil fuels for heating, cooling and transport is related to a lack of policy support for renewables in these sectors. There is still no level playing field. Many countries continue to uphold fossil fuel subsidies, which in 2018 increased 30% from the year before. Global fossil fuel subsidies totalled USD 400 billion, more than double the amount that governments spent on renewable power. ….. The massive support for fossil fuels hinders the already difficult task of reducing emissions and must be brought to a halt. “ In 2019, a record 200 gigawatts (GW) of renewable power capacity was added, more than three times the level of fossil fuel and nuclear capacity. Over 27% of global electricity now comes from renewables, up from 19% in 2010.– a remarkable rise attributed largely to continued cost declines for these technologies.”

On  June 11, the U.S.  Solar Energy Industry Association released its Solar Market Insight Report for the 2nd Quarter of 2020, forecasting a 31% drop in solar installations in 2020 over 2019, mostly  as result of Covid-19.   The SEIA  press release estimates that 72,000 workers in the U.S. have lost their jobs .  The Executive Summary  discusses the impact of the coronavirus extensively; only the Executive Summary is available for free. The report analysis is done by Wood MacKenzie consultants, and the full report is pricey.

“Staggering” decline of fossil fuels reported by International Energy Agency

The complexity of the global energy landscape has been changed profoundly, according to the  International Energy Association’s flagship publication, the Global Energy Review , released on April 30.  It forecasts a minimum 6% decline in global energy demand for 2020, (9% in the United States and 11% in the European Union),  stating, “The projected 6% decline would be more than seven times the impact of the 2008 financial crisis on global energy demand, reversing the growth of global energy demand over the last five years. The absolute decline in global energy demand in 2020 is without precedent, and relative declines of this order are without precedent for the last 70 years.”   The accompanying press release describes the decline of fossil fuels as  an “historic shock to the entire energy world” and “staggering”, especially for coal, oil and gas. The IEA forecasts that renewables will be the only energy source to grow in 2020.

Here are a few of the many recent news articles which sum up the dire impacts on oil and gas in Canada:

In “For oil and its dependents, it’s code blue” (The Tyee, April 18), Andrew Nikoforuk predicts that the “great price collapse of 2020 will topple companies and transform states”.

Fossils Expect Permanent Losses, Renewables Keep Growing As Pandemic Crashes Global Energy Demand”  in The Energy Mix (May 3);

What rock-bottom natural gas prices mean for Canada’s aspiring LNG industry” in The Narwhal (May 1);

“‘We are in crisis mode’: Newfoundland calls on Ottawa to fund oil and gas exploration” in the Globe and Mail (April 29);

And Canadian Press stories reprinted by the National Observer on May 1 include:  “Precision Drilling down almost 3000 employees due to oil and gas downturn” (May 1);  “Oil and gas drilling forecast revised to 49-year low”; “Teck Resources leaves energy group CAPP citing cost cutting” ; and “Alberta oil and gas company reports include a loss of $1.3 billion for Vermillion Energy” (April 29) .

Fatih Birol, Director of the International Energy Agency has promoted clean energy in several public statements, including  a March 14 commentary: “Put clean energy at the heart of stimulus plans to counter the coronavirus crisis”, which states, “Governments are drawing up stimulus plans in an effort to counter the economic damage from the crisis. These stimulus packages offer an excellent opportunity to ensure that the essential task of building a secure and sustainable energy future doesn’t get lost amid the flurry of immediate priorities ”   The IEA promises a World Energy Outlook special report in June “that will quantify how clean energy policies and investments can create jobs, support economic recoveries and achieve emissions reductions. The report’s findings and recommendations will inform the high-level discussions at the IEA Clean Energy Transitions Summit on 9 July.”

Renewable energy as a vehicle for sustainable economic recovery – creating up to 30 million jobs globally by 2030

Renewable energyThe first-ever Global Renewables Outlook report  by the International Renewable Energy Agency (IRENA) was released in April, following up on their 2019 report, Global Energy Transformation: A Roadmap to 2050 .  At 292 pages, the full report  provides detailed statistics on the sectors within the renewable energy industry, demand forecasts, economy-wide impacts of energy transformation – including job impacts –  and regional analysis for ten broad global regions (Canada is lumped in with the U.S. and Mexico as “North America”). It addresses the pathways of electrification, system flexibility, renewable energy, green hydrogen, and innovation relating to energy and industry decarbonization.  The official  Summary Report (54 pages) is here . Summaries and commentary appear in “Renewables Agency urges $110-Trillion Green Infrastructure Investment to Supercharge Recovery, Boost Resilience” in The Energy Mix and in “Green energy could drive Covid-19 recovery with $100tn boost” (April 20) in The Guardian. A compilation of the regional fact sheets and infographics is here .

Although headlines will focus on the price tag of $1 Trillion for investment, the  “Jobs and Skills” section is also notable.  It considers two scenarios: “Planned Energy (PE)” and “Transforming Energy” (TE) and forecasts job numbers by subsector, as well as broad occupational demands.  Some examples:  in the TE scenario, the report forecasts close to 30 million renewable energy jobs by 2030 and 42 million by 2050. Regional-level forecasts are also provided:  for example, renewable energy jobs in North America are forecast to represent 23.0% of total energy jobs under the TE scenario by 2030 and 35.3% by 2050.

Coming as it does during the Covid-19 crisis, Global Renewables Outlook  joins the chorus advocating investment in renewables as the vehicle for a sustainable economic recovery:

“With the need for energy decarbonisation unchanged, such investments can safeguard against short-sighted decisions and greater accumulation of stranded assets. COVID-19 does not change the existential path required to decarbonise our societies and meet sustainability goals.  …. Economic recovery packages must serve to accelerate a just transition. … The time has come to invest trillions, not into fossil fuels, but into sustainable energy infrastructure.”

 

 

Criticism of oil and gas stimulus funds in Canada’s Covid Economic Response Plan

Canadians were generally relieved and positive when Prime Minister Trudeau announced the energy-related provisions of the federal Covid-19 Economic Response Plan  on April 17,  with this statement: “Just because we’re in a health crisis, doesn’t mean we can neglect the environmental crisis.”  The economic stimulus included $1.72 billion to clean up orphan or inactive wells in British Columbia, Alberta and Saskatchewan, which the government claims “ will help maintain approximately 5,200 jobs in Alberta alone.” The second initiative is $750 million to create an “Emissions Reduction Fund” to help oil and gas companies meet federal methane-reduction standards.  The announcement is summarized in a CBC report  and an article in the National Observer , which also summarizes some of the generally positive reactions from environmental groups. Press releases by  Stand.earth and Clean Energy Canada reflect that generally-held relief that the government had resisted the extensive lobbying from Canadian Association of Petroleum Producers (CAPP) – as outlined in a memo leaked by  Environmental Defence Canada –  and appeared to have listened to the voices of Canada’s clean energy advocates.

An April 17 press release from Climate Action Network Canada embodies a more cautious reaction:

“While we acknowledge and appreciate what this cash infusion achieves – stimulating the economy through well-paying work, while repairing ecosystems damaged by oil and gas operations – we expect to see the federal government hold companies accountable by making enforcement of existing regulations meant to require those companies to clean up orphaned materials and restore land and waterways a condition of its support to the government of Alberta. We will be watching how fiscal measures available through Export Development Canada (EDC) and Business Development Bank of Canada (BDC) will further support the government’s stated commitment to using COVID-relief public money  to move Canada further along its path to a more sustainable and resilient net-zero economic future.”

Many of these same concerns appear in an Opinion piece by Dianne Saxe, the former Environmental Commissioner of Ontario, “Canada’s murky bail-out deal for oil and gas will cost us all”  (in the National Observer, April 21) . Saxe begins with: “it is shameful that Prime Minister Justin Trudeau is using your tax dollars to bail out the oil and gas exploration and production industry, perhaps the wealthiest and most polluting industry in human history.”  She credits the “one good program” to be the $200 million loan to Alberta’s Orphan Well Association because it is structured as a loan, to be repaid under the oversight of a special committee which will include local and Indigenous representatives. As for the $750 million Emissions Reduction  funding, Saxe criticizes the terms as unclear, and objects to the roles of the Alberta government, the Export Development Corporation and the Business Development Bank of Canada whose previous oil-friendly financial record she documents.

Finally, Saxe objects to the lost opportunity – suggesting other, more impactful ways to spend the economic funds, and stating:

“These multi-billion dollar bailouts …. are one of the most expensive and polluting ways of protecting jobs. As well as their mountain of debt, the oil and gas extraction industry creates a puny 2.7 jobs per million dollars of output, while pumping out 704 tonnes of greenhouse gases for each full-time job.”

This job creation estimate is based on research by Eric Miller, in an unpublished presentation: The Pandemic from an Ecological Economics perspective: Assessing consequences and appraising policy options (March 31 2020). More related resources are here  .