Employment Effects of Electricity Conservation: The Case of British Columbia

Abstract

Electricity conservation has been pursued by utilities largely because of its cost-advantages over new electricity generation and, more recently, due to its contribution to environmental goals. This study assesses the effect of electricity conservation on employment. Seventeen BC Hydro conservation programs are forecast over 20 years in order to estimate their effect on direct employment, electricity Savings and total cost (including administration and incentives). The direct employment estimates are used to drive a provincial input-output model to forecast indirect and induced employment. Conservation is then compared to the employment creation and cost of new electricity generation in order to calculate the net employment created by the electricity conservation programs. Investment in conservation instead of new generation should increase employment in BC over the next 20 years by 11,859 person-years. This is in part explained by the greater labour intensity of conservation investments, but also by the economic growth that ensues when low-cost conservation is pursued instead of higher cost electricity generation. Evidence from several studies supports these findings, suggesting that conservation investments will have similar employment benefits elsewhere.