Quality Declaration
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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 included:
4 Government and NPI 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 an entity such as 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 full time equivalent (FTE) employment in renewable activities relates specifically to the following activities. Solar - Roof-top photovoltaic 6 Employment in solar roof-top photovoltaic (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 low maintenance generally required for this infrastructure and the low average age of solar panels currently installed in Australia. 7 Note that while these activities are described as relating to 'roof top PV' solar, in fact they include employment activities related to all solar PV systems with the exception of those related to the category of Solar - large scale. 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 manufacturing of solar HWS in Australia, as well as repair and maintenance activity carried out on installed 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. The estimation methodology used in this publication for employment in large scale solar activities requires the creation of a listing of all large scale solar operations in Australia. The data source used to create this listing applies a cut-off point of 40kW and the estimates contained in this publication observe the same cut-off. In practice, large scale solar 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. This type of infrastructure will allow its owner to gain accreditation under the Large-scale Renewable Energy Target (LRET). In both cases, employment in renewable energy activities relates to those direct employment activities needed to carry out the installation of 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. Small scale roof-top wind turbines are also a form of wind power generation. However, employment in small scale wind has not been included in this publication as only a very small number have been installed over the reporting period and it is currently not a widely utilised technology. 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 (including pumped storage hydro-electricity); 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 bagasse (fibrous sugar cane waste); 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 or sugar cane, for use in generating bio-energy. It also does not include employees engaged in pulp and paper manufacturing - a process in which black liquor may be created as a renewable energy by-product. The primary reason for pulping wood chips under a kraft milling process is to support the production of paper products; the creation of black liquor is a secondary (though valuable) outcome. This is also the case for red sorghum and sugar cane as they are primarily grown for other purposes and renewable energy is created as a secondary product. 15 However, the use of bagasse (fibrous sugar cane waste) to generate electricity can and does give rise to direct employment in biomass energy activities. A number of sugar mills in Australia continue to operate beyond the conclusion of the sugar cane crushing season at which point their output is made up exclusively of electricity sold to the grid. At this point in time, the employees in these mills are engaged in activities principally motivated by the production of a renewable energy product. Employment in these mills, in the period outside the sugar cane crushing season, is thus treated in this publication as employment in renewable energy activities. Geothermal 16 At present, Australia's geothermal energy operations remain essentially exploratory exercises with only a small amount of operational capacity developed to date. Employment in geothermal power activities therefore mostly relates to the development of geothermal energy infrastructure i.e. site preparation, system design, drilling, system installation, related transport activity, project management and administration. Activities related to the decommissioning and restoration of non-viable sites are not in scope of this publication. 17 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 18 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. 19 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 non-profit institutions 20 The scope of this publication includes activities undertaken by employees of government agencies and non-profit institutions (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 Australian Renewable Energy Agency (ARENA). Employees engaged in renewable energy advocacy are also included, for example, employees of peak bodies in various renewable energy sectors. DIRECT / INDIRECT EMPLOYMENT IN RENEWABLE ENERGY ACTIVITIES 21 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. 22 The concept becomes less straightforward in the context of non-standard industries, or for 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. 23 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 24 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), 2006 (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 black liquor by some paper 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. 25 National statistical agencies do not typically conduct surveys on renewable energy activities. In producing the experimental estimates contained in this publication the ABS has used three broad approaches. These approaches are as follows:
Employment factor approach 26 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 (i.e. how much renewable energy is produced by renewable energy infrastructure), numbers of installations and employment factors. Employment factors indicate the number of annual direct full time 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 generate employment numbers associated with renewable energy activities. 27 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 technical literature specifications related to renewable energy operations. 28 The employment factors used in this publication make use of an international summary of factors published by the International Renewable Energy Agency (IRENA) in Renewable Energy and Jobs (2016), 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. 29 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 30 The employment factor approach was used to estimate annual direct FTE employment associated with roof-top solar PV power. 31 The Clean Energy Regulator reports information on installed capacity of roof-top solar PV infrastructure in Australia. The number of installations is typically used for the calculation of employment estimates using the employment factor approach. 32 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 growth in the average size of roof top solar PV systems installed, annual employment per MW of installed capacity has also fallen greatly. 33 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 roof-top solar PV system installed, 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. 34 The average size of a roof-top solar PV system installed in Australia increased substantially between 2009-10 and 2016-17. The estimation methodology used by the ABS recognises that roof-top solar PV systems are now larger and therefore take 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. 35 The ABS case study findings focussed specifically on 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. The scaling up of employment factors to include these 'business processes' has been carried out using figures sourced from the International Renewable Energy Agency (IRENA 2012, p20) and from discussions with experts on the operation of the Australian solar power industry. Solar - Hot water system 36 The employment factor approach was used to estimate annual FTE employment associated with the installation and servicing of solar hot water systems. 37 Estimates of the number of solar hot water systems installed, both cumulatively and for individual years, is based on data from the Clean Energy Regulator. The employment factor is based on case study information and on publicly available information and is expressed as hours worked per installation of solar hot water system. The factor used considers employment activities related to the installation of solar hot water systems and to the manufacture of such units within Australia. Note that installations made to an existing home will 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 38 The employment factor approach was used to estimate annual FTE employment associated with large scale solar power. 39 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 for the Australian context. 40 Several large scale solar power operations have recently been either proposed or completed in Australia. Typically the owners have established public websites providing extensive information on the scale and nature of these operations, including details on employment. 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. 41 The employment factor used by the ABS for large scale solar power is at the lower end of the spectrum of international observations. However, it is comparable to the estimate generated by the European Photovoltaic Industry Association (September, 2012). 42 Large scale solar encompasses a wide range of operations, from 40kW capacity roof-top solar systems to solar farms with upwards of 100 MW of capacity. It has been found that, in practice, employment per MW of installed capacity does not vary significantly between large roof-top solar PV and large scale solar farms. Wind 43 The employment factor approach has been used to estimate annual direct FTE employment for wind power. 44 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. 45 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. 46 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 useful comparisons 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 large manufacturing component but for Australia the amount of employment related to manufacturing of renewable energy equipment is 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 47 The estimation process used a list of Australia's active hydropower sites compiled from a range of sources available from public websites. 48 In Australia, hydropower operations are typically carried out by large enterprises predominantly engaged in the provision of hydropower. For these enterprises, employment data were taken from publicly available annual reports and from other information publicly available on related websites. However, there are also enterprises that predominantly rely on power from a range of sources that include hydropower operations as part of their energy mix. For these enterprises, employment data were mainly obtained from information publicly available from their websites. In some cases, however, employment numbers could not be retrieved from websites and were instead supplied directly from the enterprise, or estimated based on the installed hydropower capacity of the operations. 49 For two hydropower operators the ABS has adjusted information taken from publicly available sources. These adjustments are explained below. 50 The Hydro Tasmania 2016 Annual Report presents employee numbers by calendar year, up to 2016. 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. 51 An adjustment was also applied to employment data released in respect of 2012-13 by Snowy Hydro Limited on its company website. In order to extrapolate beyond 2012-13 to2016-17, 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 Average Weekly Earnings, Australia (cat. no. 6302.0).
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