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Assessment of Regional Employment Effects of RES Integration in the Energy Sector of Latvia. Ivars Kudrenickis, Department of Environmental Management, Faculty of Economics and Management, University of Latvia Gaidis Klavs, Institute of Physical Energetics, Latvia. - PowerPoint PPT Presentation
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Assessment of Regional Employment Effects of RES Integration
in the Energy Sector of Latvia .
International Conference “NEW SOCIO-ECONOMIC CHALLENGES OF DEVELOPMENT
IN EUROPE 2008Labour Market Issues”
Riga, University of Latvia, 2-4 October 2008
Ivars Kudrenickis, Department of Environmental Management,
Faculty of Economics and Management, University of Latvia
Gaidis Klavs, Institute of Physical Energetics, Latvia
Plan of presentation
I: Renewable energy in Latvia energy supply
II: Assessment of employment creation effect: the challenges
III: The structure of production chain analysis (PCA) model
IV: Employment assessment by PCA: overall results for Latvia and their regionalisation
Part I: Renewable energy in Latvia energy supply
Primary energy supply in Latvia (2000-2007)
28
29,231,331,4
2929,130,229,5
0
40
80
120
160
200
2000 2001 2002 2003 2004 2005 2006 2007
PJ
0
10
20
30
40
50
60
70
80
90
100%
electricity
biomas
natural gas
oil products
coal & peat
renewables
RES in electricity and DHS supply in Latvia
47,1 46,7
39,2
48,4
36,5
43,9
33,231,9
44,7
52,8
29,3
68,2
45,5 47,746,1
35,1
47,1
37,7
14,813,8
14,6
14,212,511,7
11,312,4
11,411,68,9
84,8
3,11,81,20,7
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
% RES-E share in total supply RES-DH share
Structure of RES-E supply in Latvia (2006)
1 %
2 %
3 %
2 %
95 %
Large HPP Small HPP Wind Biogas+biomas
Part II: Assessment of Employment Creation Effect: the challenges
Background statement
Energy supply systems based on RES compared to fossil energy systems are more labour intensive in delivering the same energy output
Crucial differences among various RES technologies exist: employment in bioenergy projects is significantly different than that of the wind, hydro and solar energy projects.
MITRE PROJECT, 2003
Advanced renewable energy policy in 2020: 16% (262 Mtoe) of primary energy, 27.6% (963 TWh) of electricity supply, 7.8% (22 Mtoe) of transport fuels supply
Implementation of advanced renewable energy policy may reach 2.4 million new workplaces in old EU member states
General principles of workplaces assessment
direct and indirect (induced) workplaces, taking into consideration the complementary
principle, short-term workplaces (e.g., construction of
plant) are generally related to technical life time of the production unit
Possible approach – use of standard factors
To assess the employment effect, the specific number of direct workplaces, related to the construction and operation of the energy production unit, is associated with so called standard factors, like:
1 MW of installed capacity, 100 GWh of annually produced electricity, 1 million units of investments
Job places per 100 GWh annually produced electricity
Fossil technologies 1-6
Wind 15-20
Solar PV 50-54
Solar thermal 25-27
Small hydro 8-9
Biomass, forestry waste 18-19
Biomass, energy plantations 64
Biogas, agriculture waste 58
Source: R.E.H.Sims, “Biomass and Agriculture: Sustainability, Markets and Policies”, OECD Publication, Paris, September 2004, pp.91-103
Weak point of applying standard factors
Applying the country non-specific standard factors does not take into account regional or local conditions.
Evidently, the standard factors depend on the cost structure of a given country and vary from country to country, and might even vary from region to region.
Part III: The structure of production chain analysis (PCA) model
Production chain analysis model
Facilitycost
OMcost
Fuelcost
Technologyvalue chain
O & Mvalue chain
Fuelvalue chain
End-user
All costs RE
energy
30%
70%
80%
20%
Totalandperunit
Estimation of the wages part of the value chain
Wages
Equipment
Income ofthe supplier
Fuel cost at the facility
=
Localization of the employment
Localregional
Nacional
Transnational
Employment
Source:
Tyge Kjær,Roskilde University
Production chain analysis
The Background
Identifying of the wages share in the value chain of a given energy production installation
Three Different Starting Points of PCA Model
(i) potential of RES,
(ii) capacity of energy production unit that will be installed, or
(iii) demand for energy.
Production Chain Assessment MethodologyExample: Biomass CHPs, steam turbines,
Efficiency Electricity
Total
25%
85%
Target for electricity production, GWh/year
Annual operating hours
Total electricity capacity (calculated), MWel
280
5600
50
Specific investments, mill.EUR / 1MW
Technical lifetime, years
Operation & Maintenance costs (% of investments per year)
Biomass fuel cost, EUR/GJ
5.7
20
4
3.1
Wages share of total investments
(comprising Latvian local share)
8%
(20%)
Wages share of O&M costs
(comprising Latvian local share)
50%
(80%)
Wages share of fuel costs
(comprising Latvian local share)
45%
(100%)
Part IV: Employment assessment by PCA: overall results for Latvia and their regionalisation
New capacities assessed
Wind: onland 225 MW
Biomass (Wood) CHP - 100 MWel
Biogas – 36 MWel
Resulting in:
+ 1300 GWh RES-electricity annually
Employment Effect of Renewable Electricity
Production (1)On-
shore Wind
Solid Biomasssmall scale CHP Biogas
CHPSteam turbine
Gasifiers
Total new electricity capacity, MWel
225 50 50 36
Part A. Workplaces assessed without taking into account the complementary principle
Investment related workplaces 14.7 13.3 12.5 9.6
O&M related workplaces 147.4 266.7 364.9 374.4
Biomass fuel supply related workplaces
328.9 274 51.4
Total 162.1 608.9 651.4 435.4
Employment Effect of Renewable Electricity
Production (2)On-
shore Wind
Solid Biomasssmall scale CHP Biogas
CHPSteam turbine
Gasifiers
Total new electricity capacity, MWel
225 50 50 36
Part B. Workplaces assessed taking into account the complementary principle
Investment related workplaces 14.7 13.3 12.5 9.6
O&M related workplaces 147.4 200 273.7 374.4
Biomass fuel supply related workplaces
164.5 137 51.4
Total 162 378 423 435
Employment Effect of Renewable Electricity Production and related tax revenues
New capacities
(MW)
New direct jobs
New indirect
jobs
Tax revenues in state
social budget
(thsd EUR)
Tax revenues –income tax
(thsd EUR)
TOTAL 361 1398 2097 18 677 8218
Wind 225 162 243 2164 952
Solid Biomass (Wood) CHP
100 801 1202 10 704 4710
Biogas CHP 36 453 652 5809 2556
Assumptions for distribution of workplaces among Latvia regions
1. Direct workplaces:wind – according recommendation to establish zones for the
location of wind power plants,solid biomass CHP - close to current consumption of wood fuel
in district heating and industry sector. biogas CHP – comparatively similar, except Latgale (taking
into account unutilised agriculture land)
2. Indirect workplaces:Taking into account dominating role of the Riga in national
economy, it is assumed that 50% of indirect workplaces will be created in regions, but the others in Riga and its surroundings (Riga planning region).
Distribution of Employment Effect among Latvia planning regions
46
17
19
711
Riga
Kurzeme
Vidzeme
Zemgale
Latgale
Thank You !
Gaidis Klāvs: energy@edi.lvIvars Kudreņickis: ivars.kudrenickis@lu.lv
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