The Green Economy Review: Insight into Green Job Developments Worldwide Volume 2. November, 2010

In this issue:

1. The Green Energy Act Validated

Ontario’s Green Energy Act was validated this month as Californians voted to uphold their clean energy legislation by defeating Prop 23.

As we argued in Sunday’s Star, a broad coalition of farmers, blue collar workers, investors, environmentalists and clergy came together to defeat an expensive campaign run by the oil industry.

California’s decision is something quite remarkable – In the midst of the most partisan, rancorous mid-terms in a generation, renewable energy bridged the poisonous divide across American politics. The take away: the more clean energy takes root, the more people like it.

The decision on Prop 23 confirms that we’re leaders in 21st Century economic strategy, and it’s a validation of Ontario’s leadership position, which has only just begun to show its promise. Read our op-ed here.

2. The Return of Manufacturing

Ontario’s Green Energy Act continues to attract clean energy manufacturers to the province. This month, Spanish solar equipment maker, Siliken, announced plans to open a manufacturing plant in Windsor, Melitron announced intentions to manufacture solar modules in Guelph, and 6N Silicon announced they would be doubling their production of solar-grade silicon at their Vaughan facility.

To get a sense of the momentum created by the Act, read last month’s Review and check out this chronology detailing some of the major developments.

Clean energy manufacturers are also beginning operations in the U.S. This month, the world's largest producer of solar panels, Suntech Power Holdings, opened a manufacturing plant in Goodyear, Arizona. The new module production facility has an initial 30MW of annual capacity and will employ more than 75 operators, engineers and professionals by the end of 2010.

Although incentives continue to be important when attempting to attract renewable energy manufacturers, the case for domestic manufacturing is growing stronger on its own. As wages rise in countries such as China and India and their currencies appreciate relative to the dollar, the comparative advantage of manufacturing in these countries is starting to weaken. Add to this the rising price of fuel and the likelihood that, eventually, a price will be put on carbon, the margin becomes even smaller.

Electric car manufacturer, CODA, estimates that if exchange rates remain unchanged, in 2014 it would cost 22 percent more to build their cars in the U.S. instead of China. But when other factors are also considered, the difference is closer to 4%, not including any greenhouse gas accounting. As a result, they have applied to the U.S. Department of Energy for a loan, in order to relocate some of their manufacturing to American soil.

3. Training for Green Jobs

As the word’s economies continue to embrace green initiatives and clean energy, the likelihood of a skilled labour shortage and the subsequent need to train workers is becoming increasing prevalent. This month, reports out Australia, Vermont, and B.C. all highlighted a shortage of skilled labour as one of the key threats to the green economy.

To address this shortage, a number of countries and U.S. states have recently launched green jobs training initiatives. Among the announcements this month are a $5.7M initiative in Iowa, a number of multi-state initiatives including the Greenforce Initiative and The Sustainability Education and Economy Development (SEED) Center, and programmes in both Scotland and Ireland. The Indian government is also said to be is working on a proposal to start several diploma and technical training courses in renewable energy.

Potential labour shortages have also been flagged in Ontario, where most renewable energy projects will rely on Ontario’s workforce to undertake the construction works, consulting and engineering in order to meet the domestic content requirements under the Green Energy Act.

4. Climate Policies and Development

Climate change policy continues to be important to renewable energy investors, developers and manufacturers in terms of both providing clarity and certainty.

The lack of federal policy in the U.S. and the uncertainty around future policy directions due to the mid-term elections is reported to be hard on green businesses and hampering the growth of renewable energy and clean tech sectors in the U.S. American authorities were cautioned that Asian nations including India, Malaysia, South Korea are all moving forward, threatening the U.S. position as a key player in renewable energy manufaturing.

Australian businesses are also reported to be suffering from a lack of clarity, unsure both as to the direction Australian authorities intend to pursue and as to how various policy tools such as a cap-and-trade system would affect their business.

Meanwhile, jurisdictions including California and Scotland are moving to adopt stricter targets. Of note, Scotland has now upped their renewable energy target from 50% to 80% by 2020, with First Minister, Alex Salmond, reportedly saying he is confident they will get 100% of their electricity from renewable sources by 2025.

5. Financing the Transition

Despite a climate of austerity, the U.K. government announced a number of green measures in their spending review this month, including 1 billion pounds for a green investment bank. The amount is less than businesses were hoping for, however, as in late September, more than 20 prominent companies including Bank of America Merrill Lynch, Microsoft, and British Airways issued a joint statement saying that 4 billion pounds would be needed, at minimum, if the U.K. hoped to meet it’s low-carbon goals.

In addition to public investment, some private money is beginning to flow into the green economy. Ecotricity, Britain’s largest independent green energy company, announced plans to raise up to £10 million ($15.7 million) through a four-year bond, and U.K. investment company Topland is also reported to be expanding into green energy.

As the green economy grows and as the returns become more favourable, some of the larger pension funds are said to be interested in green investments. For example, Reuters reports that Swiss-based Capital Dynamics now offers two renewable energy funds.

6. Other Green Jobs Initiatives

In addition to deploying renewable energy, governments are also investing in and mandating greater energy efficiency, many recently turning their attention to residential buildings. Programs announced this month include a multi-state U.S. DOE-funded benchmarking project for home energy performance, and a federally funded retrofitting program in Virginia. Of note, the retrofit program gives preference to minority contractors and is expected to create up to 600 jobs within a year.

Legislators in the U.K. are pursing a different approach with the so-called “green deal” to encourage homeowners to install better insulation. The green deal will give homes and businesses access to independent surveys, finance and high quality installations by Government-accredited fitters. The energy efficiency measures are voluntary initially, but the Financial Times reports that the bill may give officials the power to legislate a “backstop date” of about 2015 to compel landlords to pay for energy improvements. Landlords are expected to be eligible for “Green Deal” loans to pay for the energy efficiency retrofits. U.K authorities estimate the scheme will create up to 100,000 green jobs over the next 5 years.

Halifax recently announced plans to create green jobs through their Community Solar Project, a $5 million pilot to encourage individual homeowners to install solar panels for heating domestic hot water. The solar panels would be financed through property tax bills, and repaid over the course of 5-10 years. The cost of the loans is expected to be offset by the energy savings resulting from the solar panels.

Green Jobs are expected in California and Mexico after energy warehouser, Rubenicus, announced plans to set up a large enegy storage facility on the Baja Peninsula. Capable of storing up to 1000 MW in a series of sodium sulphide batteries, the facility will create more than 200 direct jobs and 800 indirect jobs for the region.

Green jobs may also be created in the U.S. as the result of two lawmakers move to ban e-waste exports. Called the Responsible Electronics Recycling Act, the goal of the legislation is to stop toxic e-waste from going to countries in Africa and Asia. If passed, the bill will create recycling jobs in the U.S. where companies currently find it difficult to compete with facilities overseas due to different labour and environmental practices.

The Geothermal Energy Association released a report this month, which found that federal stimulus funds, tax incentives, and state renewable standards continue to fuel the growth in geothermal power and job creation. The report also found that geothermal energy is creating more jobs than conventional energy and most of the jobs are permanent, full-time, and often provide a higher wage. As projects underway continue to develop and come online, the industry is expected to add thousands more jobs.

7. Green Economies Around the World

The green economy continues to gain prominence around the world.

China’s dominance is now acknowledged in terms of both installed capacity and domestic renewable energy manufacturing, and they appear to be on track to meet their ambitious target to produce 20 percent of their energy from renewable resources by 2020.

India is also embracing the green economy in a big way with the announcement of a 20-year, $2.3 trillion plan to improve energy efficiency and introduce more renewable sources into their energy mix.

Other countries moving reported to be moving to green their economies and invest in low-carbon technologies and infrastructure include Morocco, Sri Lanka, South Korea, and Bulgaria.

8. Offshore Wind Infrastructure

Offshore wind projects got a boost this month in the U.S. and in the U.K.

In the U.S., Google and a New York financial firm have each pledged $5 billion towards the development of a transmission line “backbone” for future wind farms along the Atlantic Seaboard. 350 miles long, the backbone is encouraging news for investors, developers and environmentalists alike as it will remove one of the hurdles to off-shore development and demonstrates confidence in the continued deployment of renewable energy in the U.S.

In the U.K., the government pledged to go ahead with their plans to upgrade British portsto make them suitable for handling offshore turbines. The pledge was welcomed by renewable energy firms including Siemens, GE and Gamesa, all of whom will be building manufacturing facilities in the area. GE, for example, will invest £100m in a manufacturing plant, creating about 1,900 jobs by 2020. The manufacturing facilities and the deployment of offshore wind in the U.K. are expected to create 70,000 jobs.