NewEnergyNews: TODAY’S STUDY: THE RETURNS FROM NEW ENERGY SUPPORT/

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The challenge now: To make every day Earth Day.

YESTERDAY

THINGS-TO-THINK-ABOUT WEDNESDAY, August 23:

  • TTTA Wednesday-ORIGINAL REPORTING: The IRA And The New Energy Boom
  • TTTA Wednesday-ORIGINAL REPORTING: The IRA And the EV Revolution
  • THE DAY BEFORE

  • Weekend Video: Coming Ocean Current Collapse Could Up Climate Crisis
  • Weekend Video: Impacts Of The Atlantic Meridional Overturning Current Collapse
  • Weekend Video: More Facts On The AMOC
  • THE DAY BEFORE THE DAY BEFORE

    WEEKEND VIDEOS, July 15-16:

  • Weekend Video: The Truth About China And The Climate Crisis
  • Weekend Video: Florida Insurance At The Climate Crisis Storm’s Eye
  • Weekend Video: The 9-1-1 On Rooftop Solar
  • THE DAY BEFORE THAT

    WEEKEND VIDEOS, July 8-9:

  • Weekend Video: Bill Nye Science Guy On The Climate Crisis
  • Weekend Video: The Changes Causing The Crisis
  • Weekend Video: A “Massive Global Solar Boom” Now
  • THE LAST DAY UP HERE

    WEEKEND VIDEOS, July 1-2:

  • The Global New Energy Boom Accelerates
  • Ukraine Faces The Climate Crisis While Fighting To Survive
  • Texas Heat And Politics Of Denial
  • --------------------------

    --------------------------

    Founding Editor Herman K. Trabish

    --------------------------

    --------------------------

    WEEKEND VIDEOS, June 17-18

  • Fixing The Power System
  • The Energy Storage Solution
  • New Energy Equity With Community Solar
  • Weekend Video: The Way Wind Can Help Win Wars
  • Weekend Video: New Support For Hydropower
  • Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

    -------------------

    -------------------

      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

    -------------------

    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

  • ---------------
  • WEEKEND VIDEOS, August 24-26:
  • Happy One-Year Birthday, Inflation Reduction Act
  • The Virtual Power Plant Boom, Part 1
  • The Virtual Power Plant Boom, Part 2

    Thursday, May 03, 2012

    TODAY’S STUDY: THE RETURNS FROM NEW ENERGY SUPPORT

    Preliminary Analysis of the Jobs and Economic Impacts of Renewable Energy Projects Supported by the §1603 Treasury Grant Program

    Daniel Steinberg and Gian Porro and Marshall Goldberg, April 2012 (National Renewable Energy Laboratory)

    Executive Summary

    Historically, federal incentives for renewable energy development in the United States largely consisted of the investment and production tax credits (ITC and PTC) and the accelerated depreciation benefit for renewable energy property [the Modified Accelerated Cost Recovery System (MACRS) and the bonus depreciation]. Both the ITC and the PTC provide financial incentives for development of renewable energy projects in the form of tax credits that can be used to offset taxes paid on company profits. Given that many renewable energy companies are relatively nascent and small, their tax liability is often less than the value of the tax credits received; therefore, some project developers are unable to immediately recoup the value of these tax credits directly. Typically, these developers have relied on third-party tax equity investors to monetize the value of the main federal incentives for renewable energy project development. However, in the wake of the 2008/2009 financial crisis, the pool of tax equity investors dramatically decreased, limiting the ability of renewable energy project developers to recoup the value of these tax credits. In order to minimize any stagnation in the renewable energy industry as a result of the weakened tax equity market, the United States Congress created the §1603 Treasury grant program under the American Recovery and Reinvestment Act. This program offers renewable energy project developers a one-time cash payment—in lieu of the ITC and PTC and equal in value to the ITC (30% of total eligible costs of a project for most types of energy property)—thereby reducing the need for project developers to secure tax equity partners.

    Although the primary intent of the §1603 program was to minimize the impact of the weakened tax equity market on renewable project development, as part of the Recovery Act, the program also had “the near term goal of creating and retaining jobs” in the renewable energy sector.1 This analysis responds to a request from the Department of Energy Office of Energy Efficiency and Renewable Energy (DOE-EERE) to the National Renewable Energy Laboratory (NREL) to estimate the direct and indirect jobs and economic impacts of projects supported by the §1603 Treasury grant program. The analysis employs the Jobs and Economic Development Impacts (JEDI) models to estimate the gross2 jobs, earnings, and economic output supported by the construction and operation of solar photovoltaic (PV) and large wind (greater than 1 MW) projects funded by the §1603 grant program.

    Through November 10, 2011, the §1603 grant program has provided approximately $9.0 billion in funds to over 23,000 PV and large wind projects, comprising 13.5 GW of electric generating capacity. This represents roughly 50% of total non-hydropower renewable capacity additions in 2009–2011.

    The estimated gross jobs, earnings, and economic output supported by the PV and large wind projects that received §1603 funds are summarized below and in Table ES-1:

    Construction- and installation-related expenditures are estimated to have supported an average of 52,000–75,000 direct and indirect jobs per year over the program’s operational period (2009–20115).

    This represents a total of 150,000– 220,000 job-years. These expenditures are also estimated to have supported $9 billion–$14 billion in total earnings and $26 billion–$44 billion in economic output over this period. This represents an average of $3.2 billion–$4.9 billion per year in total earnings and $9 billion–$15 billion per year in output.

    Indirect jobs, or jobs in the manufacturing and associated supply-chain sectors, account for a significantly larger share of the estimated jobs (43,000–66,000 jobs per year) than those directly supporting the design, development, and construction/installation of systems (9,400 per year).

    The annual operation and maintenance (O&M) of these PV and wind systems are estimated to support between 5,100 and 5,500 direct and indirect jobs per year on an ongoing basis over the 20- to 30-year estimated life of the systems.

    Similar to the construction phase, the number of jobs directly supporting the O&M of the systems is significantly less than the number of jobs supporting manufacturing and associated supply chains (910 and 4,200–4,600 jobs per year, respectively).

    The estimated ranges reported reflect uncertainty in the domestic content of a system and its components—the portion of total project expenditures spent on U.S.-manufactured equipment and materials such as turbines, towers, modules, or inverters. Based on a review of a number of studies specifically addressing domestic content for these types of systems, and recognizing the complexity and changing nature of solar and wind supply chains, a range for domestic content was applied in the analysis. This included a low of 30% to a high of 70% for both solar and wind systems, spanning the ranges observed in the literature. The lower end of the impact estimates noted above reflects the 30% domestic content assumption while the higher end reflects the 70% assumption. While this range reflects the implications of uncertainty in one key input to the economic impact estimates, it should not be construed as fully bounding uncertainty in the ultimate estimates of the economic impacts. 4 Total investment in these projects, which includes capital investments from all private, regional, state, and federal sources (including §1603 funds), is estimated to exceed $30 billion. These PV and large wind projects account for approximately 94% of the total generation capacity of projects funded under the §1603 program and represent 92% of total payments.

    The results presented in this report cannot be attributed to the §1603 grant program alone. Some projects supported by a §1603 award may have progressed without the award, while others may have progressed only as a direct result of the program; therefore, the jobs and economic impact estimates can only be attributed to the total investment in the projects.

    In addition, this effort represents a preliminary analysis of the gross impacts of the PV and large wind projects supported under the §1603 grant program rather than precise forecasts of the national economic and job-related impacts from these projects. Understanding the net employment and economic impacts of these projects would require a more detailed analysis of the types of jobs supported as a result of changes in the utilization of existing power plants and associated fuels, electric utility revenues, and household and business energy expenditures. Similarly, estimating jobs associated with possible alternative spending of federal funds used to support §1603 projects would require additional analysis.

    Lastly, this analysis solely focuses on the jobs, earnings, and economic output supported by projects funded by the §1603 program. For a discussion of the impacts of the §1603 program on installed renewable generation capacity, project financing, and tax-equity markets, see Brown and Sherlock and Bolinger et al…

    Conclusions

    This analysis uses the NREL JEDI-PV and JEDI-Wind models to estimate the gross jobs, earnings, and economic output resulting from the total investment in PV and large wind projects funded by the §1603 cash grant program through November 10, 2011. It is estimated that expenditures on these projects supported between 52,000 and 75,000 direct and indirect jobs annually (a total of 150,000–220,000 FTEs, or job-years, over the period) during the design, development, construction, and installation of the systems. The results equate to 5–7 job-years per million dollars of total investment, or 11–16 jobs-years per megawatt of installed capacity. In addition, it is estimated that these projects supported $3.1 billion–$4.9 billion per year in earnings and $9.1 billion–$15.4 billion per year in economic output.

    During the operational phase, these projects are estimated to continue to support 5,100–5,500 direct and indirect jobs, approximately $0.3 billion in earnings, and $1.7 billion–$1.8 billion in economic output annually for the lifetime of the projects (generally 20–30 years). These operational period jobs represent approximately 0.4 jobs per megawatt of installed capacity.

    The estimates vary with the assumed domestic content of a system, which were bounded between 30% and 70%.

    Consistent with the share of total project investment, wind projects account for the largest share of jobs during both the construction and operational periods, accounting for approximately 85%–90% of the jobs supported in the construction and operation periods. However, the higher installed cost ($/kW) assumed for PV systems drives higher jobs intensity for PV projects on a per-kilowatt basis.

    Indirect manufacturing and supply-chain jobs make up the large majority of the jobs supported by investment in the PV and large wind projects analyzed and account for approximately 80%–85% of the total direct and indirect jobs supported. Jobs directly for the design, construction, and operation are estimated to make up approximately 10%–15% of the total jobs supported.

    In terms of total jobs, earnings, and economic output supported, the largest impact of investment in the PV and wind projects analyzed here is during the construction and installation phase. This is due to the fact that PV and wind facilities are capital-intensive and require a large workforce to install. O&M of the facilities does not require a large workforce, and thus the total jobs, earnings, and economic output supported by these facilities during their regular operation is significantly lower than the total supported during construction.

    Although the number of jobs and associated economic activity is greatly reduced during the operational phase of the projects, these jobs and associated earnings and economic output are expected to last throughout the projects’ lifetimes (estimated to be 20–30 years).

    This analysis estimates the gross jobs and economic impacts of projects funded by §1603; it is not an impact assessment of the §1603 program itself, and as such, the estimated impacts cannot be attributed solely to the §1603 program. The number of jobs and amount of earnings and economic output directly attributable to the §1603 program will likely be lower than the estimates reported here to the extent that some supported projects may have gone forward even in the absence of the §1603 program. Furthermore, the results presented in this report are not intended to be precise forecasts of the national economic and job-related impacts from these projects but rather estimates of overall impacts. These aggregate national results are consistent with prior published job estimates for similar systems. This effort represents only a preliminary analysis of the gross impacts of these projects, and additional analysis would be necessary to examine the net employment and economic impacts of these projects, including more detailed analysis of the types of jobs supported. Lastly, while the results presented offer reasonable insights into the national impacts associated with these investments in these projects, the results are sensitive to changes in the assumptions.

    0 Comments:

    Post a Comment

    << Home