by Daniel Cusick, E&E reporter, August 12, 2016
As many as 150,000 workers from the U.S. coal mining and coal-fired power sectors could be retrained for jobs in the fast-growing solar photovoltaics (PV) industry at a relatively low cost to business and governments, according to new research from public policy and engineering experts.
The analysis, published in the journal Energy Economics by scholars at Michigan Technological University and Oregon State University, is among the first to calculate the labor force impacts of one of the most sweeping U.S. energy-sector transitions of the last century. Its relevance is heightened by recent policy positions staked out by the Republican and Democratic presidential nominees.
Joshua Pearce, an associate professor of materials science and electrical and computer engineering at Michigan Tech, said the findings should offer hope for depressed coal communities as well as quantitative evidence that the U.S. energy sector is more dynamic than many of the doom-and-gloom scenarios offered by the coal lobby.
"People owe it to themselves to ignore the politics and look closely at the facts," Pearce said in an email. "Economics will drive the future electrical supply to be made up of far more solar and far less coal. In short, the future of the U.S. domestic coal industry is not bright."
Among the factors dimming coal's future, Pearce and fellow researcher Edward Louie of Oregon State found, are price competition from alternative energy resources, including natural gas, wind and solar power; steep cost declines in renewable energy technologies; and tightening U.S. and global regulations on emissions from coal-fired plants, including emissions of mercury, sulfur dioxide, and carbon dioxide.
"These factors all contribute to a decline in profitability for continuing to operate coal-fired power plants in both the near and long term," the researchers said.
One of the greatest challenges associated with a declining coal industry is that its workers will need to retrain for new jobs outside of the sector.
"Fortunately, there is one energy industry sector growing at an incredible rate — solar photovoltaic technology that converts sunlight directly into electricity," the researchers state.
15 years for solar to absorb coal industry layoffs
Among the upsides, Pearce and Louie found that solar can be deployed in most regions of the United States, so "the need for relocation would be minimized."
Also, PV technology is becoming increasingly attractive to large utilities and independent power producers, which are investing hundreds of millions of dollars in new utility-scale solar plants. The construction and operation of these plants could employ significant numbers of workers.
The U.S. solar industry employed 209,000 workers in 2015, according to data compiled by the Solar Foundation, and is creating jobs at a rate 12 times greater than employment growth in the overall economy. The Bureau of Labor Statistics, meanwhile, projects the number of solar PV installers to surge by 24% between 2012 and 2022.
"It thus appears possible for the growth of solar PV-related employment to absorb the layoffs in the coal industry in the next 15 years," the researchers conclude.
But critics and independent observers have questioned some of the report's conclusions.
Among other things, they note that solar is not an evenly distributed industry across the United States. Its biggest footprint is in a few states — notably California. For miners in Appalachia, the West Coast is a logistical, cultural and socio-economic stretch that many would consider too great or even unattractive. The same holds true for solar firms pondering expansion plans.
"Solar companies are unlikely to pull up stakes and move their businesses to Appalachia — and, on the flipside, people don't simply migrate en masse to wherever jobs happen to be," Michael Reilly, editor of the MIT Technology Review, wrote yesterday in a response to the study.
Other critiques raise questions about the success of worker retraining programs.
Reilly pointed to a 2008 study by the Labor Department suggesting that worker retraining programs have limited success and another study by the Hamilton Project that found worker training must be highly targeted to workers most likely to benefit — namely younger, more educated and more mobile people.
In an email, Pearce addressed such critiques by acknowledging that those with highly specialized coal-mining jobs would have the most difficulty in transitioning to the solar sector and that such workers would "need to invest in significant retraining to match their salaries" in the solar sector.
But, he added, this group "is a relative minority."
As for issues of geography and culture, Pearce argued that "solar technology works everywhere and any state with a high concentration of coal workers can easily 'open up' the solar market by making relatively modest policy changes."
He also said, more pointedly, "Unlike some viewpoints I have read in the media, I don't think that coal workers are too stupid to do anything else. I have read interviews with coal workers themselves that indicate they would be happy to transition if they had the training."
Appalachia faces highest worker-transition costs
Yet for a coal-to-solar sector transition to occur smoothly and with minimal economic hardship, early- and mid-career workers in the coal mining and coal-fired power sectors should begin preparing themselves for the shift, including through education, training, and skill acquisition, the researchers said.
As part of the research, the authors used industry-created metrics to determine "the amount of training needed to equip each coal worker for success in the closest matching PV job," based on the level of education and training required for the new job. Researchers also estimated the variable costs associated with the transition — including education, training, certification, licensing, and salary requirements of workers transitioning to solar jobs from coal-producing states.
While the costs varied by region and state, the analysis found the highest worker transition costs in Appalachia, led by West Virginia and Kentucky, with the lowest transition costs in the Midwest, Plains, and West. Wyoming, the nation's No. 1 coal-producing state, saw retraining costs ranging from $14 million, under a best-case scenario, to $146 million, under a worst-case scenario. By comparison, West Virginia's estimated coal worker retraining costs ranged from $46 million to $475 million.
The state and regional differences are due in part to the number of coal-sector workers employed in each state. For example, West Virginia's estimated coal-mining labor force is more than 22,000 workers, while Wyoming claims just over 7,000 workers. The scenarios also factor in whether retraining costs are absorbed by industry, government, or the workers themselves, and the length of time required to train for a new position in the solar sector. Researchers calculated that some solar jobs could be acquired with just a few months of training, while others could require as much as nine years.
On per-worker basis, costs ranged from a few thousand dollars to more than $100,000, the researchers calculated, depending upon a coal-sector employee's existing skills and what would be needed to acquire a similar or higher-level job in the PV industry. "Thus, the cost of retraining is not trivial for some of the individual coal employees and could be financially burdensome for an individual to pursue themselves," the researchers said.
Yet, even if the federal government paid the full cost of coal worker retraining — ranging from $180 million to $1.87 billion — the spending would account for just 0.0052% to 0.0543% of the U.S. federal budget, according to the researchers.
As it stands, President Obama has committed in his 2017 budget proposal $75 million to retrain coal workers and promote economic diversification in communities hit hard by regulations such as the Clean Power Plan.
Democratic presidential candidate Hillary Clinton, meanwhile, has pledged to spend $30 billion to bolster coal communities and "ensure that to ensure that coal miners and their families get the benefits they've earned and respect they deserve," according to a briefing paper on her campaign website.
Donald Trump, her Republican rival, has promised to aid coal communities by rolling back much of the Obama administration's energy agenda, including the Clean Power Plan and other regulations targeting coal mining and coal-fired power (ClimateWire, Aug. 11, 2016).
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