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Assessment of Regional Employment Effects of RES Integration in the Energy Sector of Latvia

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.

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Assessment of Regional Employment Effects of RES Integration in the Energy Sector of Latvia

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  1. 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 . International Conference “NEW SOCIO-ECONOMIC CHALLENGES OF DEVELOPMENT IN EUROPE 2008 Labour Market Issues”Riga, University of Latvia, 2-4 October 2008

  2. 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

  3. Part I:Renewable energy in Latvia energy supply

  4. Primary energy supply in Latvia (2000-2007)

  5. RES in electricity and DHS supplyin Latvia

  6. Structure of RES-Esupply in Latvia (2006)

  7. Part II:Assessment of Employment Creation Effect: the challenges

  8. 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.

  9. 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

  10. 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

  11. 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

  12. Job places per 100 GWh annually produced electricity Source: R.E.H.Sims, “Biomass and Agriculture: Sustainability, Markets and Policies”, OECD Publication, Paris, September 2004, pp.91-103

  13. 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.

  14. Part III: The structure of production chain analysis (PCA) model

  15. Production chain analysis model Source: Tyge Kjær,Roskilde University

  16. Production chain analysis The Background Identifying of the wages share in the value chain of a given energy production installation

  17. 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.

  18. Production Chain AssessmentMethodology

  19. Part IV: Employment assessment by PCA: overall results for Latvia and their regionalisation

  20. New capacities assessed • Wind: onland 225 MW • Biomass(Wood) CHP - 100 MWel • Biogas – 36 MWel Resulting in: + 1300 GWh RES-electricity annually

  21. Employment Effect of Renewable Electricity Production(1)

  22. Employment Effect of Renewable Electricity Production(2)

  23. Employment Effect of Renewable Electricity Productionand related tax revenues

  24. Assumptions for distribution of workplaces among Latvia regions • 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).

  25. Distribution of Employment Effect among Latvia planning regions

  26. Thank You ! Gaidis Klāvs: energy@edi.lv Ivars Kudreņickis: ivars.kudrenickis@lu.lv

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