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Energy Economics Weekly Briefings

You Are What You Measure: Business Growth in Canada’s Clean Energy Sector

Written by: Ellen Hughes-Cromwick

Recently I co-authored an article which appeared in the Journal of Economic Perspectives entitled, “The Value of U.S. Government Data to U.S. Business Decisions.” One of the key points in the article was that firms use low-cost U.S. government data to help them optimize business decisions and to help them discover new, commercially viable markets. Even digital platform companies, with access to the big data from their platform users, rely heavily on U.S. government data in order to benchmark their business plans and determine shifts in demographics, labor market parameters and economic activity trends.  The article provides several examples of this type of data use.

Data are critical to business growth, especially in clean energy sectors of the economy where legacy databases tend to focus on historical activity, and less on forward-looking activity. For example, U.S. data on manufacturing and goods-producing industries are very detailed and robust across production, consumption, employment and other attributes. However, U.S. data are typically less detailed for other sectors of the economy. Fortunately, the U.S. Department of Energy, and now nonprofit organizations working in collaboration with a private sector firm, publish the annual U.S. Energy and Employment Report (USEER). Some of the key takeaways in this report were highlighted in a recent weekly blog here.

This week a think tank called Clean Energy Canada produced an interesting report detailing Canada’s clean energy sector. The report defines a “clean energy economy” in the following way:

“The technologies, services and resources that increase renewable energy supply, enhance energy productivity, improve the infrastructure and systems that transmit, store and use energy while reducing carbon pollution.”

Their study indicates that by 2017, clean energy jobs totaled nearly 300,000, or 1.6% of total employment, which stood at 18.4 million. The strong growth is impressive and is similar to the recent data for U.S. clean energy jobs.  The chart below shows where clean energy jobs stack up as compared to other sectors in the Canadian economy.

 

Of the nearly 300,000 clean energy jobs, 57.5% were in the clean transport sector.  Most of these positions were employees of the public transit industry in Canada. Clean energy supply represented 20.1% of all clean energy jobs, with the majority working in the nuclear and hydro industries. Canada also has a growing industry in batteries and energy storage for renewables, with investments increasing from $5.9 million in 2010 to nearly $200 million in 2015.

The total clean energy economy is an estimated Canadian CA$56.3 billion in 2017 with an average annual growth of 4.8% during the 2010 – 2017 period. In other words, the clean energy economy represents 2.6% of 2017 Canada GDP of CA$2.137 trillion– small but growing at a pace which is more than double that of the overall economy.

To recap, we are what you measure. Data and statistics on clean energy GDP, employment, production, sectoral investment, capital markets activities, and pricing are all critical to support innovation and business activity. Business opportunities can be created when the data uncover the trends which are emerging in growth sectors of the economy. With growth in Canada’s energy storage industry, it is positioning for future expansion of renewables on the grid. This report served to make more transparent the activities now underway in Canada. More data and measurement of clean energy activities are needed.