One year of coal CEO pay could retrain every US to work in the solar industry

By Katherine Tweed  August 09, 2016 Cross-posted from GTM

Even in the worse case scenario of a $1.8bn cost for retraining all workers, including employees having to relocate, this would still equate to just five per cent of coal company’s revenue, the paper said, or five per cent of the $38bn the coal industry secured in US financial subsidies between 1994 and 2008.

On Monday, presidential candidate Donald Trump called for policies designed to put coal miners and steelworkers back to work. The decline of the U.S. coal industry is largely out of the president’s hands, since it is influenced by global markets and the advent of cheaper energy alternatives. But retraining people in the struggling coal industry is still very much within the president’s purview.

There is another way for coal workers to make a living, according to a new study from Michigan Technological University and Oregon State University, published in Energy Economics.

It’s in solar.

In states with the most coal jobs, many workers could be retrained for the growing solar PV industry — some at a cost of just a few thousand dollars. For many coal companies, even those filing for bankruptcy, the cost of retraining all employees would be less than a year’s pay for the CEO.

The study noted that the CEO of Consol Energy earned about $14 million in 2012, more than enough to retrain all of the company’s employees for jobs in the PV industry. Arch Coal, which has filed for Chapter 11 bankruptcy, paid its executives and directors more than $29 million in the year leading up to its bankruptcy filing, according to The Wall Street Journal.

While the study touched on executive compensation, the bulk of the research looked at the state-by-state costs and the options for funding private and public retraining programs.

The highest cost would be in West Virginia, which has the largest number of coal workers. The study found the average cost of a retraining program for a coal company would equate to about 5 percent of revenue. Additionally, the study noted that the externalities of the coal industry, such as public health costs, are far higher than any cost incurred to move people to cleaner energy jobs.

In the best-case scenario, the employees whose roles aren’t specific to the coal industry, such as secretaries and electricians, can find jobs in other industries, while the worst-case scenario assumes every employee currently in the coal industry would need to be relocated.

Of course, not every single coal job would have to be recreated in another industry. Many coal-fired power plants will continue to operate for decades in the U.S., and there is still an international market (albeit a shrinking one) for coal.

There are already more solar jobs than coal jobs, and the growth of the solar industry could absorb many coal workers in the next 15 years, according to the researchers.

“The writing on the wall for the coal industry is clear,” wrote Joshua Pearce, a study co-author and associate professor of materials science and engineering at Michigan Technological University, in Harvard Business Review. “Young coal workers, in particular, should consider retraining for a job in solar now.”

The recommendations come with significant caveats, however.

Local governments would have to acknowledge and accept the demise of an industry that they have long supported.

Leading coal states such as West Virginia and Kentucky do not rank in the top 35 solar states, according to GTM Research. Many industry employees would have to relocate unless the local solar market improved substantially.

Training would need to begin sooner rather than later. Some retraining and certification may take as little as three months, but other solar-specific training would require new degrees that could take up to four years to complete. The upside is that many of the jobs in the solar industry offer compensation similar to their counterparts in the coal industry, which has provided some of the best-paying jobs in the regions where they are located.

But solar is not the only other clean energy industry that could provide a safety net for coal workers. Wind markets in states like West Virginia and Wyoming are much more robust than solar.

Bringing clean energy jobs to the rural regions that support thousands of coal workers would take a concerted effort from both state and local governments. For example, some of the resources already available from the federal government can take up to a year to get to miners awaiting retraining, according to Pennsylvania’s PublicSource.

Hillary Clinton has proposed a broad range of measures to bring clean energy jobs, including solar, wind and hydro, to coal country. Any additional efforts at the federal level would need to begin within months, not years.

But given that there are similarities across many energy industries, some coal workers say they would welcome the opportunity to shift to clean energy.

“If they’re going to use energy alternatives, why can’t they bring a solar panel plant here, or train us…to install them in the field? Coal miners are some of the most versatile people here on the planet,” former Emerald coal miner Bob Wilson told PublicSource in a June story about the future of Pennsylvania’s coal miners. “We’ve all run equipment, done welding, fabricating. We’ve built million-dollar belt drives from the ground up. We can do this stuff with a little bit of help.”


And in the UK:

According to a recent paper published in the journal Energy Economics, retraining US coal employees for work in the rapidly expanding photovoltaic industry would cost between $180m and $1.8bn, based on best and worst case scenarios.  Joshua M. Pearce, a professor in engineering at Michigan Technological University and co-author of the paper, said the research offers hope tens of thousands of fossil fuel industry workers could take advantage of a sector that already employs more people than the coal industry and is employing new workers at a rate 12 times faster than the overall economy.  “As coal investors have fled in droves to invest in more profitable companies and industries, coal workers have been left with pink slips and mortgages on houses with few buyers in blighted coal country,” he wrote in Harvard Business Review on Monday. “It is clear that coal is no longer a competitive form of electrical generation. The one energy sector that is growing at an incredible rate is the solar industry – and it is hiring.”

The paper is by no means the first to highlight the potential benefits of retraining fossil fuel workers to work in the growing renewables industry. A new report released last month by the Trades Union Congress (TUC), which represents the majority of the UK’s trade unions, urged for wider upskilling programmes to ensure the UK’s workforce is prepared for the low-carbon transition.

Meanwhile, the Scottish government-funded Transition Training Fund was launched in July to provide hundreds of opportunities for workers in the country’s embattled oil and gas sector to retrain in renewable energy and other sectors.

Working Narec technicians

By Madeleine Cuff 29 July 2016 Government-funded Transition Training Fund offering 340 places for oil and gas workers looking to pursue careers in renewable energy

Scottish workers leaving the increasingly embattled oil and gas sector are being offered the chance to retrain for work in clean energy industries, under a new training scheme funded by the Scottish Government.

The Transition Training Fund (TTF) is funding 340 places on a range of training courses across Scotland, designed to help fossil fuel industry workers enter new sectors, including renewables and low-carbon technologies.

The recent fall in fossil fuel commodity prices has hit the Scottish oil and gas sector hard, with data suggesting more than 65,000 jobs have already been lost in the sector. This week saw the first strike by North Sea oil and gas workers in almost 30 years in protest over pay and conditions.

Meanwhile, Scotland has become a hub of clean energy generation, generating just under half of all the renewable electricity produced in the UK.

Mike Duncan, director of Energy Skills Scotland, part of Skills Development Scotland which administers the TTF, said the new training places would help laid-off workers enter new growth sectors.

 “The Transition Training Fund aims to help retain the wealth of skills and experience developed by our oil and gas industry and to redeploy it in other sectors,” he said in a statement. “This element of the fund allows training providers to help people move into a number of growth areas where there is a demand for skills, and it represents a real opportunity for people affected by redundancy to launch a new career.”

The training will be provided by a mix of higher education colleges and businesses. Under the scheme Danish conglomerate Maersk is offering training in the renewables sector, while Inverness College UHI will train people in developing skills for the electrical, solar, biomass or heat pump sectors.

Lee Atkinson, head of sales and marketing at Maersk Training, said there is high demand for clean energy workers in Scotland. “With new wind projects under development in Scotland, and a shortage of operations and maintenance technicians, it is an opportune time for individuals to transition from the oil and gas sector,” he said in a statement.

%d bloggers like this: