4631.0 - Employment in Renewable Energy Activities, Australia, 2013-14 
Quality Declaration
Quality Declaration ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 13/04/2015 First Issue
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EXPLANATORY NOTES
3 In addition, a significant number of employees of government bodies and non-profit institutions (NPIs) are engaged in activities directly and predominantly motivated by the promotion, administration and production of renewable energy and of renewable energy infrastructure. Within this publication the following additional category of renewable energy activity is thus included:
4 Government and NPIs employees are recorded separately from the other categories of renewable energy, since these employees are typically engaged in activities that cut across various types of renewable energy. For example, an employee of the Clean Energy Regulator who carries out tasks related to the administration of Australia's renewable energy target is principally motivated by the delivery of a market infrastructure to promote all types of renewable energy. Since Australia's renewable energy target promotes a range of renewable energy types, it is not appropriate to assign employees of the Clean Energy Regulator to a specific type of renewable energy. Instead, they are assigned to a separate category 'Government and NPIs'. SCOPE OF RENEWABLE ENERGY ACTIVITIES 5 This section briefly describes the scope of activities included under each category of renewable energy and for government and NPIs. Direct FTE employment in renewable activities relates specifically to the following activities. Solar - Roof-top photovoltaic (PV) 6 Employment in solar roof-top PV activities extends to all activities required to install small scale solar power infrastructure. This includes such activities as site preparation; roof modifications; electrical preparations (e.g. powerboard upgrade and/or meter replacement); installation of racking for solar panels, solar panels and inverter; and testing and certification of installed systems. It also includes related retail activities and project management. Employment in operation and maintenance of roof-top solar PV is in scope, however no estimates have been made of employment in these activities because it is assumed to be insignificant due to the generally low maintenance nature of this infrastructure and the low average age of relevant capital stock in Australia. 7 Note that while these activities are described as relating to 'roof top PV' solar, in fact they relate to all solar PV systems with an installed capacity of less than 40kW. Solar - Hot Water System 8 Employment in solar hot water system activities includes installation of solar hot water systems (HWS), either into new dwellings; or into existing dwellings as a replacement for existing solar HWS or as retrofitted conversion to solar HWS. Direct employment in renewable energy activities relates to those employment activities needed to carry out the installation of the solar HWS, for example, site preparation, system design, system installation, project management and administration. It also includes repair and maintenance activity carried out on solar HWS. Solar - Large scale 9 Employment in large scale solar activities includes employment activities related to all solar power systems with an installed capacity of 40kW or greater. In practice it includes two broad types of solar power infrastructure. The first is a larger version of household roof-top solar PV installations, typically sited on the roof of commercial operations such as shopping centres, hospitality clubs or factories. The owner of this type of infrastructure is usually seeking to defray a significant electricity expense. The second type of large scale solar infrastructure is a dedicated solar farm allowing the electricity producer to supply electricity to the grid for sale to third-party customers. In both cases, employment in renewable energy activities relates to those direct employment activities needed to carry out the installation of the large scale solar, such as site preparation, system design, system installation, project management and administration. In principle, it also includes employment related to the ongoing operation and maintenance of large scale solar power infrastructure. Wind 10 Employment estimates for wind power encompass two broad areas of activity: installing wind power infrastructure such as concrete slabs, towers, turbines, grid connection and access roads; and the ongoing technical operation and maintenance of wind power infrastructure. The former is primarily undertaken by employees of engineering and construction, transport and similar businesses. The latter is typically carried out by employees of the wind power infrastructure operator. Hydro 11 Employment in hydropower activities includes all activities required to carry out hydropower operations, including those related to operating and managing hydropower assets to generate hydroelectricity. In addition to the range of technical activities needed to carry out these operations, hydropower activities include such things as related retail activity; engagement with local and national electricity markets; management of environmental assets and engagement with various hydropower stakeholders. Planning and construction of hydropower capital works are also in scope, and these activities include the construction and/or upgrade of dams for hydropower; upgrade and/or replacement of key technical components such as turbines and transformers; and capital works related to distribution assets such as grid connections, poles, wires and other distribution structures. 12 This category also includes employees involved in designing, developing and installing micro hydro power infrastructure. Biomass 13 Energy from biomass includes bio ethanol; bio diesel; gas from landfill; sewage gas; and crop and livestock waste. Direct employment in biomass energy activities includes the design, construction and maintenance of infrastructure used to create energy from biomass. It also includes employees who operate this infrastructure for the primary purpose of generating renewable energy. 14 Direct employee numbers for biomass do not include those engaged in cultivating biomass feedstock, such as red sorghum, for use in generating bio-energy. It also does not include employees engaged in the crushing of sugar cane - the process from which bagasse (fibrous sugar cane waste) is created as a renewable energy by-product. The primary reason for crushing sugar cane is to support the production of refined sugar; the creation of bagasse is a secondary (though valuable) outcome. A similar reasoning supports the exclusion of employment related to the production and use of black liquor, which is both a by-product and a source of renewable energy in the manufacturing of paper. Geothermal 15 Employment in geothermal power activities relates to activities associated with the development of geothermal energy infrastructure i.e. site preparation, system design, drilling, system installation, related transport activity, project management and administration. Australia's geothermal energy operations remain essentially exploratory exercises with only limited operational capacity developed to date. 16 Academic research into geothermal energy is concentrated into dedicated centres located within Australian universities. Employees engaged in these activities have been assigned to the category 'government and NPIs'. Wave 17 The use of ocean waves, tides or current to generate energy is currently at early production stages within Australia. Renewable energy activities relevant to estimates of direct employment in wave energy include the design, construction and operation and maintenance of wave energy infrastructure. 18 Employment in this area is small and there is very little publicly available data on employment in wave energy activity in Australia. As a result it was decided to omit estimates of annual direct FTE employment in wave energy activities. Government and NPIs 19 The scope of this publication includes activities undertaken by employees of government agencies and NPIs to support the operation of renewable energy systems, for example, administration, legal, policy or advocacy. Therefore, employment in regulatory bodies such as the Clean Energy Regulator is in scope. Some government agencies and NPIs provide support that is critical to the go-ahead of many renewable energy projects and the employees of these units are also considered to be renewable energy employees. Examples of the latter include the Clean Energy Finance Corporation (CEFC) and ARENA. Employees engaged in renewable energy advocacy are also included, for example, employees of various renewable energy peak bodies. DIRECT / INDIRECT EMPLOYMENT IN RENEWABLE ENERGY ACTIVITIES 20 International statistical standards do not define direct and indirect employment, however, the concepts are straightforward for standard industries. For example, direct employment in the mining industry refers to jobs created by the actions of units predominantly engaged in mining activity. 21 The concept becomes less straightforward in the context of non-standard industries, or to specific projects. For example, no 'Tourism' industry exists within standard industry statistics produced by official statisticians. Tourism is defined in terms of the consumer of the product such that, for example, some consumers of accommodation services are engaged in tourism activity and some are not. Thus, it is difficult to determine where 'tourism' employment starts and finishes. In the case of tourism, the direct effect relates solely to the immediate effect of expenditure made by visitors. For example, when a tourist uses a taxi service, the direct employment effect includes the proportion of the driver's employment that is spent driving tourists. The indirect effects on employment would include employees hired by the petrol stations, garages and food outlets needed to provide the taxi driver with petrol, motor servicing and meals while on duty. Renewable energy activity, like tourism, does not constitute a standard industry within industrial classifications. 22 Direct employment in renewable energy activities is employment directly related to the production of renewable energy, and/or by the design, construction and/or maintenance of renewable energy infrastructure. The section above 'Scope of renewable energy activities' describes the specific activity inclusions for each type of renewable energy. For example, an installer of roof-top solar PV will undertake a range of activities to design and install this infrastructure. That is, direct employment relates to such activities as site preparation; roof modifications; electrical preparations (e.g. powerboard upgrade and/or meter replacement); installation of racking, solar panels and inverter; and testing and certification. It includes any subsequent call-out for repairs and maintenance, and also retail activities and project management. Indirect employment comprises all people who work in the production of intermediate inputs related to installing, operating and maintaining renewable energy infrastructure. It arises from such things as general supplies used in the installation process (e.g. wiring, conduit, replacement roof tiles), servicing of transport equipment, meals consumed on the job and so on. If the installer of roof-top solar PV does general electrical work such as replacing powerpoints or light fittings, this is not employment in renewable energy activities (of either a direct or indirect kind). ESTIMATION METHODOLOGY 23 Renewable energy is not readily discernible from the standard product and industry classifications used within official statistical series. For example, within the 2006 edition of the Australian and New Zealand Standard Industrial Classification (ANZSIC) (cat. no. 1292.0), renewable energy is separately identified within Class 2612 Hydro-Electricity Generation, but no other renewable energy activity is separately identified in this way. Units whose predominant activity is to generate electricity from wind, solar, biomass, geothermal or wave energy are not separately identified but are recorded together within ANZSIC Class 2619 Other Electricity Generation. In cases where renewable energy is not the predominant activity of the producing unit, for example, the use of bagasse by sugar manufacturers, standard industry statistics will instead record economic activity against the predominant activity of the unit. The installation of renewable energy infrastructure is an important example of ANZSIC treating activity not as part of a renewable energy industry but instead as construction activity or as professional, scientific and technical services. The cross-cutting nature of renewable energy means that, while renewable energy activity is in scope of the national accounting framework, it is captured in a way that does not support its full and separate identification. 24 National statistical agencies do not typically conduct surveys of renewable energy activity and the ABS has not gathered any information directly from survey respondents in support of this publication. In producing the experimental estimates contained in this publication the ABS has used two broad approaches. Firstly, it has accessed publicly available information such as company annual reports, information provided on company websites, industry association reports and data drawn from the Renewable Energy Certificate (REC) Registry maintained by the Clean Energy Regulator. Secondly, it has made extensive use of the employment factor approach. Employment factor approach 25 The employment factor approach has been used to estimate employment in renewable energy activities by type of renewable energy. It utilises information on installed capacities of renewable energy infrastructure, numbers of installations and employment factors. Employment factors indicate the number of annual direct FTE jobs created per physical unit of choice, for example, numbers of annual FTE employees created per megawatt (MW) of installed capacity of wind power. It is an estimation technique that has been used internationally to estimate employment numbers associated with renewable energy activities. 26 The critical element of this methodology is the employment factor itself and this has been estimated on the basis of specific case studies, industry surveys, feasibility studies and/or technical literature specifications related to renewable energy operations. 27 The employment factors used in this publication make use of an international summary of factors published by IRENA in Renewable Energy and Jobs (2013), augmented by a number of Australian studies. The actual employment factors used within this publication are described in the section immediately below, against the relevant categories of renewable energy. 28 Employment factors vary significantly over time and from country to country and must be interpreted and used with caution. They reflect different employment functions inherent within different countries, leading to significant variation in employment numbers per unit of installed capacity of renewable energy. For example, the lower price of labour in developing countries often results in significantly more FTE employment per MW of installed capacity than is the case for high labour cost developed countries. Employment functions would be expected to change over time, sometimes quite rapidly, as technological improvements are achieved in renewable energy equipment and as the technical expertise of designers, managers and installers grows. ESTIMATION METHODOLOGY, BY TYPE OF RENEWABLE ENERGY Solar - Roof-top PV 29 The employment factor approach was used to estimate annual direct FTE employment associated with roof-top solar PV power. 30 The Clean Energy Regulator reports information on installed capacity of roof-top solar PV infrastructure in Australia. This is the physical variable typically used for the calculation of employment estimates using the employment factor approach. 31 A number of countries have developed estimates of employment related to the installation of roof-top solar PV by using employment factors expressed per MW of installed capacity of solar PV (IRENA, 2013). These data were compared to data yielded by recent Australian case studies which show significantly lower levels of employment per MW of installed capacity than typically reported overseas. There are a number of reasons for these differences. In the first instance, the Australian figures assume that no domestic employment arises from the manufacturing of solar components (panels, inverters, racking etc.) and this assumption does not hold true for some other countries. A second more critical factor is the age of many of the international estimates. Given the dramatic recent decline in the price of roof-top solar PV components, it has become more affordable to install larger systems. With the recent significant growth in the average size of roof top solar PV systems installed, annual employment per MW of installed capacity has also fallen significantly. 32 On the basis of case study investigations the ABS has determined that in using the employment factor approach, the more meaningful physical variable is employment per installation of roof-top solar PV system, rather than per MW of installed capacity of roof-top solar PV. Larger roof-top solar PV systems have more solar panels and more racking and their installation therefore requires somewhat more labour. However, the majority of tasks making up a roof-top solar PV system installation take equally long to complete for a small system as for a large one. For example, time spent on sales activity; project management; processing of renewable energy certificates (RECs); transport to and from the work site; roof preparation; installation of inverter; upgrade of powerboard; replacement of electricity meter and regulatory checks; are either completely or largely independent of the size of the roof-top solar PV system installed. 33 The average size of a roof-top solar PV system installed in Australia increased substantially between 2009-10 and 2013-14. The estimation methodology used by the ABS recognises that roof-top solar PV systems are now larger and therefore take somewhat longer to install. Equally, it is recognised that over this brief time series efficiency gains have been made in the installation of roof-top solar PV systems. 34 The ABS case study findings relate specifically to the labour required at the work site to install roof-top solar PV infrastructure. To this is added employment associated with various 'business process costs' (e.g. sales, planning and administration costs) needed for the installation of roof-top solar PV. Figures sourced from IRENA (2012, p20) provide the basis for scaling up employment factors to include these 'business processes'. Solar - Hot Water System 35 The employment factor approach was used to estimate annual FTE employment associated with the installation and servicing of solar hot water systems. 36 Estimates of the number of solar hot water systems installed, both cumulatively and for individual years, is based on data from SunWiz 2014 published in the Clean Energy Australia Report 2013, a publication produced by the Clean Energy Council. The employment factor is based on case study information and is expressed as hours worked per installation of solar hot water system. Note that installations made to an existing home take longer than an installation to a new dwelling and that the employment factor also considers ongoing servicing of solar hot water systems. Solar - Large scale 37 The employment factor approach was used to estimate annual FTE employment associated with large scale solar power. 38 Limited information is available internationally on employment factors per MW of installed capacity of large scale solar power. This may be explained by the fact that, until recently, large scale solar struggled to compete on cost grounds with other forms of renewable energy, particularly wind. Instead, international data on employment per MW of installed capacity was more likely to pertain to the installation of roof top solar PV and other applications of solar power. As is the case for wind power, most of the data available internationally on employment per MW of installed capacity of solar power appear considerably higher than could be justified in the Australian context. 39 Several large scale solar power operations have recently been either proposed or completed in Australia. Typically the owners have provided extensive information on the scale and nature of these operations, including details on employment, on publicly accessible websites. By using a combination of this publicly available information, assumptions about the relationship between jobs and annual FTE employment, and by incorporating an element of employment related to the planning and development of the solar farm, it has been possible to derive an employment factor expressed as annual FTE employment per MW of installed capacity of large scale solar power. 40 The employment factor used by the ABS for large scale solar power is at the lower end of spectrum of international observations. However, it is comparable to the estimate generated by the European Photovoltaic Industry Association (September, 2012). 41 Large scale solar encompasses a wide range of operations, from 40kW capacity roof-top solar systems to solar farms with upwards of 100 MW capacity. It has been found that, in practice, employment per MW of installed capacity does not vary significantly between roof-top solar PV and large scale solar farms. Wind 42 The employment factor approach has been used to estimate annual direct FTE employment for wind power. 43 A list of relevant businesses engaged in wind power operations was compiled using publicly available information. This list contains data on each wind farm in Australia, including: state/territory; start/finish date of construction activity; and installed capacity of the wind farm. Employment factors were generated for: direct FTE annual employment related to construction activity; and direct FTE annual employment related to ongoing operation and maintenance of the wind farm. The employment factors were determined based on various Australian studies, taking into account information publicly released by a number of companies installing wind power in Australia, and after consideration of published results from around the world. 44 The employment factors used in this publication were selected after confrontation with other available data, in particular, after comparison with information publicly released by a number of Australian companies delivering and operating renewable energy projects. Official company reports and website information on renewable energy projects frequently set out expected and actual employment levels related to these projects, as well as project start and finish dates and installed capacity in MW. These figures were used to derive observed estimates of employment factors for specific projects and to help determine which employment factors were the most appropriate to Australian operations for the period in question. The employment factors used for wind power in this publication are at the lower end of the range of factors published internationally. 45 A high priority was placed on obtaining recent observations because the recent rapid increase in size of wind turbines and blades impacts directly on per-MW employment factors. In addition, Australia's status as a high wage cost country necessarily restricts the comparison to employment factors from similarly high wage cost countries i.e. where greater pressure exists to maintain the minimum workforce necessary to complete the task. Employment factors used in many overseas studies include a significant manufacturing component but for Australia the amount of employment related to manufacturing of renewable energy equipment is relatively much less. This is further justification for use of employment factors that are at the lower end of the spectrum of international data. Finally, employment factors used for wind power in this publication do not consider employment related to decommissioning or refurbishment of renewable energy infrastructure, primarily because most of Australia's renewable energy infrastructure is relatively young and very few wind power operations have ended their productive life. Hydro 46 The estimation process used a list of Australia's active hydropower sites which has been compiled from a range of sources available from publicly accessible websites. 47 In Australia, hydropower operations are typically carried out by large enterprises predominantly engaged in the provision of hydropower. For these businesses, employment data were taken from publicly available company annual reports and from other information publicly available on company web sites. However, there are also firms that predominantly rely on power from a range of sources that include hydropower operations as part of their energy mix. For these businesses, employment data were mainly obtained from information publicly available from company websites. In some cases, however, employment numbers could not be retrieved from company websites and were instead estimated based on the installed hydropower capacity of the firm's operations. 48 For two hydropower operators the ABS has adjusted information taken from publicly available sources. These data adjustments were required to achieve a complete time series of data, and to ensure a better fit with the required conceptual basis of the publication. 49 In the first instance, the 2013 Hydro Tasmania Annual Report (page 77) presents employee numbers by calendar year, up to and including for 2013. The 2014 Hydro Tasmania Annual Report (page 8) presents numbers similarly in respect of 2014. An estimate of Hydro Tasmania employees engaged in wind farm activities has been deducted from this total. This adjusted calendar year series has been converted to a June 30 financial year basis using the average of adjoining calendar year estimates. 50 The second adjustment was applied to employment data released in respect of 2012-13 by Snowy Hydro Limited on its company website. In order to extrapolate beyond this year, an indicator was built to approximate movements in FTE employees of Snowy Hydro. The indicator is 'Employee benefits expense' taken from annual reports of Snowy Hydro, divided by average hourly cash earnings of full-time non-managerial adult employees of the Electricity supply industry, sourced from the ABS publication Employee Earnings and Hours, Australia (cat. no. 6306.0). Biomass 51 Estimates of annual FTE employment in energy derived from Biomass are derived partially from publicly available employment estimates, and partially from using the employment factor approach. 52 Three distinct sets of estimates make up employment in energy derived from Biomass: Bio ethanol; Bio diesel; and Landfill gas. For Bio ethanol and Bio diesel production employment data are obtained substantially from publicly available information. In some cases, employment was estimated based on the installed capacity of the plant, given knowledge of employment numbers for similar sized operations. 53 Employment in landfill gas includes both design/installation of landfill gas infrastructure and ongoing operation and maintenance of this infrastructure. Publicly available information provided estimates of employment in the design and installation of landfill gas infrastructure. A number of landfill gas operators have placed information on public websites on both employment numbers and installed energy capacity. From these observations, an employment factor was derived and used for small landfill energy operations in Australia. Geothermal 54 Employment in Geothermal operations in Australia is primarily concerned with exploration and development activity. Estimates of annual direct FTE employment in energy derived from Geothermal energy were derived from publicly available employment estimates. 55 A register of the limited Geothermal power operations in Australia was created using information contained in Australian Energy Resource Assessment (footnote 1) (Department of Industry, Geoscience Australia and Bureau of Resources and Energy Economics). For these operations, estimates of employment were based on publicly available web-based sources. Government and NPIs 56 Government agencies and NPIs generally have good web-based information of their operations, including employee numbers. This was the principal source used for estimation of annual direct FTE employment in renewable energy activities within government and NPI units. 57 The estimates published here are likely to understate somewhat the true levels of renewable energy employment within government and NPIs. It is likely that a significant number of these entities employ numbers of people engaged in work directly related to renewable energy, for example, local council employees that develop and administer guidelines related to roof top solar systems, or employees of state government agencies that manage environmental aspects of wind farm proposals. This publication includes employment data where publicly available government information identifies an entire agency or an entire program engaged in renewable energy activities. 58 A number of universities, often in partnership with outside entities, undertake research and development related to renewable energy. Employment in these types of activities has been included, for example, employment in developing understanding and design of geothermal operations. However, care has been taken to exclude employees engaged in energy efficiency developments, or in research related to institutional and/or economic aspects of renewable energy. Persons engaged in renewable energy activities under Doctoral or Visiting arrangements are also excluded from these estimates of FTE employment. Care also has been taken not to double-count employees where university departments are working in partnership with industry. 59 A number of government and NPIs employees are engaged in climate change related work, for example, through policy development, advice, training and inter-disciplinary collaboration. Although renewable energy is a central consideration of climate change policy, these employees are not specifically engaged in renewable energy activities and they have been excluded from the estimates contained in this publication. 1 Carson, L., 2014. Australian Energy Resource Assessment - Second Edition. 2 ed. Report . Geoscience Australia, Canberra <back Document Selection These documents will be presented in a new window.
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