Good practice analysis: Analytical framework and first results

1. Good practice analysis: Analytical framework and first results Klaus Jacob, Holger Bär Environmental Policy Research Centre Rabat, GIZ SE4JOBS Workshop, March 25th 2015

2. Goals • Analysis of good practice countries regarding: • Markets for technologies for renewable energy and energy efficiency • Domestic creation of value • Employment • Strategies and policy instruments • Analysis of causalities • Analysis of transferability

3. Green Jobs and Jobs in a Green Economy • Difficulties to define Green Jobs • Outcome versus process perspective, • environmental technologies versus environmental friendly technologies • Sector based versus economy wide assessments • Lack of data • Evidence for positive gross effects • Result of higher employment intensity • High shares of Green Jobs (e.g. Bangladesh 7%, Mexico 4,5%) • Net effects contested • Opportunity costs of green technologies • Lack of consideration of costs of environmental degradation • Optimistic BAUs • Findings depend on assumptions on source of financing

4. Further reading:

5. Policies for RE and EE Markets • Policies to enable markets and employment: • Supply side instruments: Innovation and investments, • Demand creating instruments, • Policies for infrastructures and market mechanisms • Policy mix and policy integration • Strategies + Strategic process

6. Transfer of Policies – generic model • Policies depend on framework conditions Are these framework conditions present in adopting countries?

7. Example South Africa’s REI4P

8. Selection of good practice countries Criteria: • Emerging economy • Relative market size of RE or EE technologies • Installed capacity of RE technologies and capacity under construction • pace of market growth in these markets & project pipelines • Energy intensity of industry • Or: Employment in RE / EE • However: Lack and often poor quality of data • Or: Strategies in place • Turkey, India, China, Mexico, South Africa, Brazil • Second series of countries to fill specific knowledge needs

9. Installed RE capacity in MW/ million inhabitants

10. Energy intensity in 2011 and change (2000-2011)

11. Selectionof Cases: Employment • China: 350.000 Jobs in wind energy, 1.6 Mio jobs in PV, • Turkey: 81.000 Jobs in wind energy • Brazil: 32.000 Jobs in wind energy, 30.000 in PV, 12.000 in hydropower • India: 110.000 jobs in PV • South Africa: 15.000 jobs in PV, 3600 jobs in wind energy • Lack of data in Energy efficiency and for many countries

12. Analysis of good practice countries • What is the outcome? • E.g. development of RE capacities and employment over time • What are the systemic conditions? • E.g. Natural conditions, political system, financial system, socio-demographic situation • What strategies are in place? • E.g. Goals, horizontal and vertical coordination, participation, work program, capacities, evaluation and monitoring • What policy instruments have been adopted? • Supply, demand and market mechanisms including framework conditions • What is the outlook? • Expected development of markets & local employment

13. Approach to data • Evidence is based on different sources of data: • International data banks on policies, markets & employment; • National policy documents: strategies, laws; • Scientific literature (based on keyword search science direct and meta studies). • Core sources are pre-selected and evaluated by GIZ country experts to ensure completeness • Interviews with GIZ country experts

14. Turkey • Why is Turkey a good practice: • Very significant market for wind and geothermal energy + very high investments in these markets in recent years

15. Why is Turkey a good practice? • Development of installed RE power capacity in Turkey, in MW Energy intensity (industry): 67% of EU 2.5% annual improvement Employment: Wind: 81.200 (EWEA 2012) Solar: 400 (IEA-PVPS) Geothermal: no data

16. Turkey • Why is Turkey a good practice case: • Very significant market for wind and geothermal energy + very high investments in these markets in recent years • Framework conditions • Natural conditions • Fast growing demand for electricity • Strategies • Horizontal coordination including civil society stakeholders • Policy instruments • Feed in tariff + local content premiums for components • Subsidies for EE investments • Outlook: • Very strong growth in electricity demand (7% p.a.) drives RE investments

17. South Africa • Why is SA a good practice case: • Installed capacity relatively small, but enormous amount of capacity under construction under the REI4P system

18. Why is South Africa a Good Pracitice? • Installed wind and PV capacity in South Africa, in MW Employment:Wind: 3600 (SA government 2012) Solar (PV+CSP): 15.400 +1.900 (SA government 2012)

19. South Africa • Why is SA a good practice case: • Installed capacity is small, but enormous amount of capacity under construction under the REI4P system • Framework conditions • Banking and finance system & fast rise in electricity prices • Strategies • IRP as living strategy with extensive public participation • Policy instruments • Auction scheme with local content requirements

20. South Africa: competitiveness of new RE vs. new coal

21. South Africa • Why is SA a good practice case: • Installed capacity is small, but enormous amount of capacity under construction under the REI4P system • Framework conditions • Banking and finance system & fast rise in electricity prices • Strategies • IRP as living strategy with extensive public participation • Policy instruments • Auction scheme with local content requirements • Outlook: • High expected growth in electricity demand (5,4% p.a. till 2030); RE very soon competitive with investments in fossil energies; estimated nearly half a million green jobs by 2025, 80.000 of which in RE, 68.000 in EE

22. Mexico • Why is Mexico a good practice case: • Significant growth and investments in wind & PV • EE improvements (e.g.-2,5% p.a. industrial energy intensity)

23. Installed RE capacity in Mexico Energy efficiency industry: 65% of EU 2,5% annual improvement Employment:Wind: 1500Solar PV: 100

24. Mexico • Why is Mexico a good practice case: • Significant growth and investments in wind & PV • EE improvements (e.g.-2,5% p.a. industrial energy intensity) • Framework conditions • Proximity to USA  RE exports • Strategies • Long-term and short term-planning through the RE & EE Strategies (15 years) and Special programs (4-5 years) • Participation through advisory councils • Policy instruments • Tax deduction up to 100% for RE investment • Energy efficiency subsidies for low income households • Outlook: • Very high growth rate in wind sector anticipated • Greening the economy could lead to net gain of 730.000 jobs

25. Frequentobservations • Co-Evolution ofpolicies, technologiesand private sector • Importanceof • Participation in strategydevelopmentandimplementation • Coordinationwithingovernment • Financing • Human capacities • Provision oflocalcontent • Access togrid

26. MENA countryanalysis • Support schemes • Good Practice South African AuctionScheme? • Energy Transformation • Good Practice Turkeys Regulatory Agency? • Energy Efficiency • Good Practice Mexicos Subsidiesforlow- andmiddleincomehouseholds? • Training • Good Practice South African Energy Training Center? • Other issues? • Localcontent? • Private sectordevelopmentandparticipation?

27. Towards a Toolbox: Support Scheme • South African auctioning scheme for RE capacity • Framework conditions: • Country’s extensive experience with public private partnerships • developers capable to shoulder high entry costs of REI4P • Functioning banking & capital market • Cost-competitiveness of RE with new conventional power

28. Towards a Toolbox: Training • Public-private cooperation in providing training in RE: SA Renewable Energy Training Centre • Framework conditions: • Joint project of government (Dept. For Higher Education, SA National Energy Development Institute), host university (Cape Peninsula University of Technology) and national and int‘l RE businesses • Funding and participation from businesses in designing training programs • Different long- and short-term programs covering wind & PV

29. Analysis ofgoodpractice countries • Outcomes: • Analytical framework including selection of countries and data sources • Draft studies for • Turkey (pilot case) • South Africa • Mexico • Outlook: • India • China • Brazil • Additional data • Thanks for your attention

30. Questions – Issues – Options • Assessment • Natural conditions • Technologies • Markets • Co-benefits • Social • Environmental • Economic • Trade Offs • Goals • Responsibilities • Coordination • Participation • Supply • Finance • Human Resources • Planning and permitting • Demand • Markets • Access to grid • Evaluation and Monitoring

31. Toolbox: Strategies • Description of Strategies: • Goals • Horizontal and vertical coordination • Participation • Work program • Capacities for implementation • Indicators, evaluation and monitoring • Taxonomies? • Policy domain? • Country?

32. Toolbox: Policies • Short summary description of policy instrument including necessary framework conditions • Schematized description • Policy instrument and mechanism • Functions and entry point • Policy domains • Systematic description of framework conditions • Administrative capacities • Economic capacities • Infrastructures • Political framework • Financial requirements • ? • References

33. Toolbox: AssessingEmployment • Methods for assessing employment • Definitions and glossary • Data • Gross effects • Net effects • Modelling (description and applications) • CGE • Partial equilibrium • Econometric • System dynamics • Microsimulation