More evidence that green jobs are illusory
Aug 22, 2013
Bishop Hill in Energy: grid, Green jobs

Pat Swords writes to tell me of an official report that has been published in Germany this week, featuring findings of research commissioned by the German Ministry of Environment (BMU) and the Federal Environment Agency(UBA). The report confirms that the Green economy is a dud, and produces few, if any jobs (source):

A recent contribution to the IZA-Standpunkte series cautions against overly optimistic expectations with regard to job creation through Germany's renewable energy turnaround. To date, there is no reliable scientific evidence on whether additional jobs can be expected from the transition to a green economy. Both a precise definition of "green jobs" and access to the relevant micro data would be essential for a sound judgment. Moreover, it remains unclear to what extent the green economic transition might also threaten "non-green" jobs. IZA expert Nico Pestel, who authored the study, says that "research on 'green jobs' is still at a very preliminary stage. However, the existing evidence suggests that much of the euphoria expressed by green energy proponents is overblown. I don't think Germany will see a 'green job miracle' any time soon."

Pat continues:

So what has been achieved given the green jobs didn't materialise?

The sad thing is that the commercial price for generating electricity in a conventional power station on the German grid is between 3 and 6 cent per kWh (unit), with an average of 3.5 cent per kWh. However, solar suppliers have to be given an average of 37.5 cent per kWh and wind 9.3 cent per kWh (plus hidden costs on extra grid requirements). As a consequence of this renewable programme, which has now achieved 20% of Germany's electricity being generated by wind and sun, a renewable supplement (EEG Zuschlag) of 5.3 cent has to be added to each kWh of electricity supplied in Germany to cover these additional costs (Note there a limited number of heavy industrial sites, which up to now have an exception from this supplement). Out of this central fund the renewable producers are provided with their extra financial compensation. 

As one can imagine, in the summer months when the sun shines, the bills rocket. One can see how the fund performs on a monthly basis in the graph below, the low point in 2012 corresponding to a deficit of €3,000 million (€3 billion) :

Right-click here to download pictures. To help protect your privacy, Outlook prevented automatic download of this picture from the Internet.


Unfortunately as it was very sunny around this July, solar panels in Germany produced a lot of power, so bills soared and the EEG fund for that month alone was over €1.5 billion in the red. The EEG supplement for next year is being agreed and should be fixed by end of September, but it looks like being 6.4 to 6.7 cent per kWh.

Worse CO2 emissions from the German electricity sector are rising and not decreasing as greater use has to be made of coal plants. In addition no less that 15 conventional power plants in Germany have applied to the Federal grid authorities to shut down. They are no longer interested in operating as the commercial incentive is gone. As priority has to be given to renewables, the commercial reality of conventional power stations operating inefficiently with reduced run times is no longer justifiable.

It is a bit of a mess, so no wonder it is a 'hot topic' for the autumn German Federal elections.

To quote the conclusions of this week's report on green jobs:

The few studies come to the result, that the relevance of the employment in the Green sector despite great euphoria is very small and is only a small segment of the German labour market. As a result it is questionable if the change to a Green Economy in respect of employment can actually be expected to provide growth. To this is remains fully open, if the Green Jobs actually are Green, i.e. lead to an improved environmental quality and to a reduction of emissions.

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