The Jobs and Economic Development Impact (JEDI) models estimate the number of jobs and economic impacts associated with power generation, fuel production, and other projects.
Economic activity in input-output models is typically assessed in three categories. NREL's JEDI models classify the first category of results—on-site labor and professional services results—as dollars spent on labor from companies engaged in development and on-site construction and operation of power generation and transmission. These results include labor only—no materials. Companies or businesses that fall into this category of results include project developers, environmental and permitting consultants, road builders, concrete-pouring companies, construction companies, tower erection crews, crane operators, and operations and maintenance (O&M) personnel.1
The second category of JEDI results—local revenues and supply chain results—occur in supporting industries. These results are driven by the increase in demand for goods and services from direct on-site project spending. Businesses and companies included in the second category of economic activity include construction material and component suppliers, analysts and attorneys who assess project feasibility and negotiate contract agreements, banks financing the projects, all equipment manufacturers (e.g., blade manufacturers), and manufacturers of replacement and repair parts.
The third category of JEDI results—induced results—are driven by reinvestment and spending of earnings by direct and indirect beneficiaries. Induced results are often associated with increased business at local restaurants, hotels, and retail establishments, but also include child care providers and any other entity affected by increased economic activity and spending occurring at the first two categories.
JEDI model results are displayed in two different time periods: construction and operations. Construction-period results are inherently short term. Construction jobs are defined as full-time equivalents (FTE), or 2,080-hour units of labor (one construction period job equates to one full-time job for 1 year).2 A part-time or temporary job may be considered one job by other models, but would constitute only a fraction of a job according to the JEDI models. For example, if an engineer worked only 3 months on a wind farm project (assuming no overtime), that would be considered one-quarter of a job by the JEDI models. Equipment manufacturing jobs, such as tower manufacturing, are included in construction-period jobs as it is ultimately new construction that drives equipment manufacturing. Operations-period results are long term, for the life of the project, and are reported as annual full-time-equivalent jobs and annual economic activity, which continue to occur throughout the operating life of the facility.
JEDI results are not intended to be a precise forecast; they are an estimate of potential activity resulting from a specific set of projects and scenarios. In addition, JEDI results presuppose that projects are financially viable and can be justified independent of their economic development value. (Please see Limitations of JEDI Models for further discussion.)
Example: A user interested in understanding the economic impacts from a 100-MW solar-powered parabolic trough plant in California to be built in 2008 can quickly and easily find the approximate jobs associated by using the JEDI model. Inputting the size and year of the project into the model (in project description) and accepting the model defaults indicates that the construction of the plant will support over 2,000 local jobs (full-time equivalent for a year) and generate over $330 million in local economic activity during the construction period. Of the total jobs, almost 600 are in the construction sector. Alternately, if the project were built over a two-year period, the total number of jobs supported (2,000) would average 1,000 for each of the years (divide total jobs by number of years). Similarly, the number of construction sector jobs would average 300 per year for each of the years (600 divided by 2).
Once in operation, this project continues to impact the state. Over 100 jobs (full-time equivalent for each year of operation) are supported, with approximately 35 directly employed at the plant. The total annual local economic activity supported by ongoing operations is just over $14 million.
Model Run Summaries and Conclusions
When comparing summary results from JEDI models for different technologies, it is best to compare facilities with equivalent energy production rather than comparing facilities with similar nameplate capacity (e.g., compare jobs to kilowatt-hours, not jobs to installed kilowatts). In either case, capacity factor and energy production should be considered when comparing economic development impacts of different power generation technologies.
Impacts During Construction
I. Project Development and On-site Labor Impacts During Construction:
This category includes money spent on labor (wages and salaries and associated impacts) for people working to develop the project such as environmental technicians and lawyers, and people who construct the project such as road builders and concrete pourers. These impacts encompass jobs that are performed on-site at a given power plant, fuel production facility, or other project, as well as basic project development services and construction management. This category is divided into the following two subcategories that do not include any parts or materials:
- Construction and Interconnection Labor:
These jobs are calculated based on cost and local share information entered in these fields in the JEDI model: Foundation, Erection, Electrical, Management/Supervision, and HV Sub/Interconnection Labor fields.
Examples: crane operators, road contractors, construction managers, electricians, tower erectors, excavation workers, backhoe operators, foundation workers, installation workers
Construction related services:
These jobs are calculated based on cost and local share information entered in the Engineering and Legal Services fields in the JEDI model.
Examples: civil and electrical engineers, attorneys, permitting specialists
II. Local Revenue and Supply Chain Impacts During Construction:
This category includes the materials and equipment necessary for the power plant or fuel production facility (e.g., turbines, modules, and boilers.) as well as the smaller components that make up the balance of system (e.g., wiring, inverters, mountings, and transformers). Impacts in this category are derived from spending on project development and on-site labor (hard hat purchases), equipment costs (turbines, blades, towers, transportation), manufacturing of components required to produce these components, materials (construction, transformer, electrical, HV line extension, HV sub-interconnection materials), and the supply chain of inputs required to produce these materials. This category also includes expenses such as land easements, site certificate/permitting, and miscellaneous labor.
Examples (for a wind power plant): turbine manufacturers, turbine suppliers, gear manufacturers, blade manufacturers, blade suppliers, glass fiber manufacturers, tower manufacturers, tower suppliers, rebar manufacturers, gravel workers, banks, cement producers, accountants, heavy equipment rental companies, bookkeepers, etc.
III. Induced Impacts from Construction:
These impacts refer to jobs and economic impacts that result from spending by workers involved in the first two categories (Project Development and On-site Labor Impacts as well as Local Revenue and Supply Chain Impacts).
Impacts During Operations
I. On-site Labor Impacts During Operations:
These impacts relate only to workers at power plants, fuel production facilities, or other projects; their administrative staff, and managers. Jobs calculation based on cost and local share information provided in the JEDI model cells called: Field Salaries, Administrative, and Management.
Examples: clerical and bookkeeping support, site managers, field technicians, O&M workers, etc.
II. Local Revenue and Supply Chain Impacts During Operations:
These impacts are derived from expenditures related to on-site labor, materials and services needed to operate the power plant, fuel production facility, or other project (vehicles, site maintenance/misc services, fees, permits, licenses, utilities, insurance, fuel, consumables/tools and misc supplies, replacement parts/equipment, spare parts inventory), the supply chain of inputs required to produce these goods and services, and project revenues that flow to the local economy in the form of land lease revenue, property tax revenue, and revenue to equity investors.
Examples (for a wind power plant): turbine, blade and tower component suppliers for replacements, motor vehicle retailers, hardware and tool retailers, tool manufacturers, maintenance providers, metal fabricators, welders, material suppliers, agents at insurance companies, attendants at gas stations (for the vehicles used to operate and maintain the power plants), local government employees, local utilities, bookkeeping and accountants, banks, lawyers, etc.
III. Induced Impacts from Operations:
Refers to activities that result from income (earnings) spent by workers involved in the first two categories (on-site labor and local revenue and supply chain impacts.
IV. Total Impacts
The total impact of the construction and operation of the power plant, as defined by JEDI, is the sum of the above three categories for construction and for operations. State-specific multipliers and personal spending patterns are used to derive the results.
1 Most other input-output models and methodologies calculate the first category of economic activity as "direct impacts" and the second category as "indirect" impacts. Direct impacts refer to changes in jobs, economic activity and earnings associated with the on-site or immediate impacts created by the investment, and would include the equipment installed onsite, the concrete used onsite, etc. Indirect impacts refer to economic impacts associated with linked sectors in the economy that are upstream of the direct impacts, such as suppliers of hardware used to make the equipment installed onsite or the concrete used onsite. However, the economic impacts of the physical items used onsite, normally included in direct impacts, typically occur at some geographic distance from the project itself. Because of JEDI's focus on the local impacts of a project, only the labor associated with the on-site location is counted in the first category. All equipment and supply chain effects are included in the second category. Typically, the sum of the direct plus indirect impacts from other input-output models can be reasonably compared to the sum of on-site plus supply chain impacts as calculated by JEDI models. Induced impacts in JEDI are calculated similarly to induced impacts in other input-output models.
2 Although the JEDI models are based on IMPLAN, which does not explicitly distinguish full- and part-time jobs, JEDI results are converted to FTE using supplementary conversion data provided by IMPLAN.