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25 April 2017 08:45 (South Africa)
Opinionista Ivo Vegter

Renewable job growth is a misleading statistic

  • Ivo Vegter
    Ivo Vegter

    Ivo Vegter is a columnist and the author of Extreme Environment, a book on environmental exaggeration and how it harms emerging economies. He writes on this and many other matters, from the perspective of individual liberty and free markets. He is seldom wrong.

Supporters of wind and solar power have taken to citing employment numbers as a measure of the industry’s success. This demonstrates either a deliberate aim to deceive, or a poor grasp of economics. Lots of people producing very little is not better than a few people producing very much.

American wind jobs crack 100,000 according to DOE,” says a recent article, as if job creation is the purpose of industry. It quotes the CEO of the American Wind Energy Association: “Wind means opportunity and job security for over 100,000 Americans.”

Solar employs nearly twice as many people in US electricity generation than oil, gas, and coal combined” reads another typical headline. Surprisingly, this claim is flatly contradicted by the data cited in the story itself:

I must admit, my formal arithmetic training dates back several decades, but last I checked, 373,807 was significantly less than the sum of 160,119, 362,118 and 515,518, which is 1,037,755. The corrected headline would read: “Oil, gas and coal combined employ nearly three times as many people in US electricity generation as solar.”

Two years ago, based on an older edition of the same report published by The Solar Foundation, the headlines in the green media were almost the same: “There are now twice as many solar jobs as coal jobs.”

No, there aren’t. Yet such stories marvel about “voracious demand” and “the fastest growth of any energy source”. Sure, they’re growing, but they’re doing so from a very small base.

But even if you suppose that the claims about employment numbers are true, there’s a problem with evaluating the success of renewable energy – or any other industry – by how many jobs it creates. Solar and wind power produce very little actual energy.

Consider this chart, from the US Energy Information Administration:

Solar and wind power don’t even merit their own entry. Or study this rather more interesting chart from 2013:

If solar power accounts for only 0.32% of US energy production, does it matter that it employs hundreds of thousands of people? Wouldn’t those people be more productively employed in a sector like natural gas, which produces more than a quarter of all US energy?

Worldwide, the US Energy Information Administration’s most recent projections have energy consumption from coal, natural gas and liquids each exceeding all renewable sources combined, even by 2040:

But a large part of that renewables trend line actually consists of hydro-electricity. This chart, which separates hydro out, and accounts only for electricity generation, better demonstrates how insignificant solar and wind still are:

So, solar and wind account for less than 2% of the US’s total energy budget. Yet they employ almost 25% of the entire energy-sector workforce. Each worker in the coal, oil or gas sector produces almost 20 times as much energy as each worker in the solar and wind industries.

This means the “opportunity and job security” that industry spin doctors boast about are entirely illusory. Those solar and wind jobs are about as useful to the US economy as South Africa’s army of roadworks flag wavers is to us. Yes, they draw salaries, which no doubt makes them very happy, but they do not produce very much of value for consumers.

Employing lots of people to produce very little is inefficient. The entire purpose of business is to maximise production and minimise the cost of the resources – such as capital, labour and land – required to do so. The idea is to do more with less, not a little with lots. This is really basic, grade-school level economics.

Celebrating job numbers in isolation is either a deliberately deceptive public relations strategy by the renewables industry, or it is a sign of economic illiteracy among journalists and fans of wind and solar power. Or both.

There are other reasons to distrust overly optimistic spin about renewable energy sources. For one, they benefit from significant direct and indirect subsidies. Proponents of renewable energy often claim that fossil fuels get even more in subsidies and tax breaks, but as I’ve shown before, that claim is demonstrably false, not only in percentage terms, but in the US, even in nominal terms.

Another is that solar and wind power are notoriously variable. This matters, because energy grids fall over if supply does not exactly match demand. We want heating when it’s cold and cloudy. We want light when it’s dark. We want to cook food even when the wind doesn’t blow. Even if renewable energy can produce enough energy to meet demand, it cannot do so on the right schedule. Large-scale energy storage technology to cope with variable energy generation simply does not exist at cost-effective prices.

The result is an unreliable power grid, which generates too much power on some days, and too little on others. The canary in the coal mine (if you’ll excuse the pun) is South Australia, whose over-reliance on renewables has twice plunged the state into darkness.

Producing low and unpredictable amounts of power by employing lots and lots of people is not a reason to celebrate the renewables industry. On the contrary: it is a sign of economic inefficiency and waste. But then, neither politicians nor journalists are required to study economics 101. DM

  • Ivo Vegter
    Ivo Vegter

    Ivo Vegter is a columnist and the author of Extreme Environment, a book on environmental exaggeration and how it harms emerging economies. He writes on this and many other matters, from the perspective of individual liberty and free markets. He is seldom wrong.

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