Coal plants don’t create as many jobs as expected

Cherokee-PlantThe Ochs Center for Metropolitan Studies in Chattanooga, Tenn. recently released a study showing new coal plants provide fewer jobs than what was predicted.

According to the study A Fraction of the Jobs, those who advocate for coal-burning power plants claim that the counties with new coal plants will experience an economic boost through the construction jobs, and permanent jobs provided by the plant.

However, this prediction is based on an economic modeling process, so the Ochs Center—an organization that provides research and data analysis services for local non-profit organizations and local government—wanted to take a closer look at the actual economic impact from the construction of new coal-powered plants.

The study examined six of the 21 large, coal-burning plants launched between 2005 and 2009 in the U.S. Each of the six plants has the ability to create more than 500 MW of energy.

Predicted employment vs. actual employment
Researchers looked at the home county of each plant and analyzed the employment before, during, and after plant construction.

The study found that only a fraction of the jobs promised actually surfaced, concluding that the economic argument for coal plants is weak—especially when compared with potential of job creation through alternative and efficient energy.

The counties included in the study were Milam County, Texas; Oteo County, Nebraska; Marathon County, Wisconsin; Pottawattamie County, Iowa; Berkeley County, South Carolina; and Robertson County, Texas.

While employment did increase in all six counties, the study found:

  • Only one county—Pottawattamie County, Iowa—experienced an increase in construction employment equal to or greater than the predicted employment impact of the coal plant construction project
  • In five of the counties where the predicted employment was analyzed, it was found that the construction of the plants only provided 4,137 jobs, even though 7,370 construction jobs were predicted. Meaning that for every 100 new construction jobs promised, just over half—56 percent—were actually created
  • More than half of the net increase in construction employment occurred in one of the counties—Pottawattamie County
  • In four counties the coal plant construction only delivered net increases of 1,730 jobs out of a predicted increase of 6,370 jobs, which is just over 27 percent
  • One out of five of the construction jobs created in these counties during the plant construction appear to be the result of non-local factors, such as national trends in construction

In each of the counties local jobs retentions rates decreased during construction—which suggests that many of the new jobs were employing workers who were coming from outside of the county

Alternative energy creates jobs
The study discusses the alternative to coal-burning plants, saying that an investment in energy efficient efforts yields new jobs and reduces the need for new generation capacity.

alternativeEnergy-WEBIn support of this claim, Ochs Center references a 2009 Navigant Consulting study for the Connecticut Clean Energy Fund and the Connecticut Energy Efficiency Fund, which suggested that existing energy efficiency efforts in the state yielded 2,675 direct jobs.

The study also projected that for every $1 million dollar investment in energy efficiency, the result would be 9.1 job years–meaning nine full time jobs that run a full year.

In two previous studies the Ochs Center explored the relative job gains that would result from investments in energy efficiency rather than the construction of new coal fired power plants in Georgia and Kentucky.

Energy efficiency creates jobs
The Ochs Center looked at a 2009 analysis of areas in Kentucky that were going to be served by the proposed Smith Plant—a coal powered plant—and found that a $634 million investment in energy efficiency could achieve savings of 944,000 MWh.

According to the analysis, with both energy efficient efforts and investments in renewable energy, the result would be the direct creation of nearly 4,700 job years.

After these results were shown in 2010, the developer of the Smith plant canceled the construction, and said that it would rather pursue energy efficiency and renewable energy initiatives.

The second analysis was from 2010 and outlined the potential energy efficient investments in the area of the proposed Plant Washington in Georgia. The study found that an investment of $1.4 billion could result in annual energy savings of up to 1.5 million MWh, as well as the creation of 9,975 years of employment.

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Coal plants may not be worth it
The study concludes that while the construction of new coal plants is thought to have a positive impact on the economy through the creation of jobs, the actual job growth is only a fraction of what is expected.

According to other research gathered by the Ochs Center, energy efficient methods create new jobs, and in the long run, save in overall energy costs.

The Ochs Center also reiterates that the health effects and environmental impact produced by coal-burning plants are high, so when compared to an investment in energy efficient methods, energy efficiency seems to be a safer choice for health, environmental, and economic reasons.

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