-      1.08 million renewable energy jobs can be created locally, significantly higher than the 29,000 jobs that will be created in the transition to gas-fired power generation.

-      If the renewable energy market potential is fully realized, the accumulated regional value-added creation by 2050 is projected to account for up to 52.65% of Chungcheongnam-do’s 2022 GRDP.

December 18 (SEOUL) – New report by Solutions for Our Climate (SFOC) and Green Energy Strategy Institute (GESI) finds that renewable energy can significantly boost job creation and provide economic drive for South Korea at both a national and regional level. Specifically examining the representative case of one of the nation’s major coal power plant regions, South Chungcheong Province (or Chungcheongnam-do, hereafter Chungnam) the study provides insights into the socio-economic ramifications of the energy transition.

This report analyzes the employment and value-added impacts of renewable energy and gas-fired power generation at the national and regional levels until 2050. A total of 5 scenarios[1] were analyzed, divided into scenarios of switching to gas-fired power generation (LNG) and switching to renewable energy (RE1~4).

Figure 1. Total Job Creation in South Korea Under Various Scenarios

At the national level, all renewable energy scenarios were found to create more jobs than gas-fired power generation.  At the regional level, the number of jobs created (FTE)[2] under the LNG scenario was 29,399 jobs, while in the RE scenarios, it ranged from 27,429 jobs to 1,085,509 jobs. This indicates that regionally all renewable energy scenarios create more jobs than the LNG scenario, except RE1, which surpasses LNG when either LCR or ESS is included, underscoring their importance in further boosting the positive impact of the green transition.

Figure 2. Total Regional Job Creation in Chungnam Under Various Scenarios

*The graph illustrates accumulated regional job creation in FTE (Full-Time Equivalent) by 2050. LCR stands for Local Content Requirement, while ESS denotes Battery Energy Storage System. The darkest section of the bar represents the minimum level of accumulated employment creation. The combined shades of the bars indicate the maximum employment levels, taking into account the impacts of LCR and ESS.

According to the report, if Chungnam ambitiously transitions to renewable energy at a level that achieves its market potential, it could create up to 1.08 million jobs (FTE) by 2050 based on cumulative values. In addition, the contribution of renewable energy to the value-added creation in the region is expected to reach up to 52% of Chungnam’s 2022 gross regional domestic product (GRDP).

On the other hand, it was found that the cumulative number of jobs created in Chungnam  from gas-fired power generation would reach up to 29,000 jobs, and the value-add contribution will be only 3% based on the 2022 GRDP. This shows that the expansion of renewable energy provides significantly greater value-add for revitalizing local economies and stimulating job creation.

Figure 3. Contribution to Chungnam’s 2022 GRDP by Total Value-added Creation for Each Scenario

In addition to being home to eighteen coal-power plants, South Korea’s Chungnam region also includes various industrial complexes, including steel, cement, and chemicals. When comparing the induced value-added coefficients between key regional industries, renewable energy was seen to provide greater economic benefits than gas-fired power generation and could contribute more to the regional economy than key industries like steel and chemicals during the operation period.

Specifically, the induced value-added coefficients of the renewable energy operating period (O&M) ranged from 0.491 to 0.600, while the induced value-added coefficients of the steel, basic chemicals, and intermediate chemical industries were 0.363, 0.250, and 0.377, respectively.

Given that Chungnam serves as a base for several major battery material companies such as SK On, there is strong strategic potential to maximize renewable energy value-creation by leveraging synergies with the energy storage systems (ESS) market. This is especially notable since global momentum for ESS is expected to grow following the 'COP29 Global Energy Storage and Grids Pledge', which was endorsed by various countries including South Korea in Baku.

Figure 4. Comparison of Induced Value-added Coefficients of Major Industries in Chungnam

* The graph illustrates induced value-added coefficients, calculated by dividing total regional value-added creation by total investment. LNG refers to gas-fired power plants replacing coal in Chungcheongnam-do. RE represents renewable energy expansion. LCR stands for Local Content Requirement, while ESS denotes Battery Energy Storage System. MCI represents Manufacturing, Construction, and Installation, while O&M stands for Operations & Maintenance.

Quotes:

Seoyoon Kim, Researcher at SFOC said:

"The primary challenges Chungnam faces in its energy transition stem from concerns over the local economy, a just transition, and the potential risk of regional decline. However, the transition to renewable energy in Chungnam is an essential step for achieving carbon neutrality. The potential of the renewable energy sector for job creation offers a pathway for reinvigorating the local economy while moving towards carbon neutrality. Research clearly shows that the benefits of renewables, particularly when combined with ESS flexibility options and mandates to use locally produced manufacturing good and services, far outpace those of fossil fuel alternatives, such as fossil gas. Chungnam holds significant potential to maximize economic gains through its renewable energy transition and serve as a successful energy transition model for other regions in South Korea and globally.”

Boram Kim, Senior Researcher at GESI said:

"Selecting an energy source is a significant decision, as its impact can last for generations. With careful planning and strategic investment, expanding renewable energy can offer a more socio-economically beneficial option than gas-fired power generation for both the country and the region, while ensuring that future generations inherit a cleaner environment. To realize these benefits, it is essential to consider expanding renewable energy alongside implementing various flexible options, such as ESS, and building local capacity.”

Footnotes:

[1] LNG: Refers to gas-fired power plants (2,550 MW) replacing coal in Chungnam. · RE1: Represents the expansion of renewable energy to match the power generation of LNG. RE2: Based on Chungcheongnam-do’s 6th regional energy plan.RE3: Derived from the renewable energy market potential in Chungnam. RE4: Corresponds to the expansion of renewable energy to match the power generation of the total coal phase- out (9,100 MW) in the region.

[2] Full-Time Equivalent (FTE) refers to the number of full-time employees working for one year.

ENDS.

Green Energy Strategy Institute (GESI), established in 2009, is an independent think tank dedicated to enhancing South Korea's energy system and promoting the expansion of renewable energy. 

GESI conducts policy research focused on expanding renewable energy, fostering industry growth, enhancing social acceptance, and analyzing renewable energy-based electricity markets. In particular, GESI specializes in energy system modeling analysis (Decarbonization, Sector Coupling) to provide policy recommendations based on quantitative analysis and collaborates closely with various institutions and stakeholders in the renewable energy sector.

Website: https://www.gesi.kr/

Solutions for Our Climate (SFOC) is an independent nonprofit organization that works to accelerate global greenhouse gas emissions reduction and energy transition. SFOC leverages research, litigation, community organizing, and strategic communications to deliver practical climate solutions and build movements for change.   
 
Website: https://forourclimate.org/  

For media inquiries, please reach out to Kate Kalinova, Communications Officer, at kate.kalinova@forourclimate.org.