The Job Generation Impacts of Expanding Industrial Cogeneration

Sustainable economic development requires the efficient production and use of energy; combined heat and power (CHP) systems contribute to both of these goals. While a recent executive order set a national goal of 40 GW of new industrial CHP by 2020, the deployment of CHP is challenged by financial, regulatory, and workforce barriers. Discrepancies between private and public interests can be minimized by policies promoting energy-based economic development. In this context, a great deal of rhetoric has addressed the ambiguous goal of growing “green jobs”. Our research provides a systematic evaluation of the job impacts of an investment tax credit (ITC) that would subsidize industrial CHP deployment. We introduce a hybrid analysis approach combining simulations using the National Energy Modeling System (NEMS) with Input-Output modeling. Our results suggest that each GW of installed CHP capacity may be reasonably expected create and maintain 2,000-3,000 full-time equivalent jobs throughout the lifetime of the system. These jobs would include direct jobs in manufacturing, construction, operation and maintenance, as well as other indirect and induced jobs (net of losses in other sectors), both from redirection of industrial energy expenditures and respending of commercial and household energy-bill savings. We discuss implications for industrial policy, affirming the benefits of innovative technology investments and effective policy design. *Corresponding author: Georgia Institute of Technology Dr. Paul Baer D. M. Smith Building Assistant Professor, School of Public Policy Room 107 Email: [email protected] 685 Cherry Street Phone: 404-385-1526 Atlanta, GA 30332 0345