As I have noted in earlier posts, there is a green skills gap opening up in the UK, and it seems to be an expanding problem, as indicated by a report by the Royal Academy of Engineering (RAEng) and National Engineering Policy Centre, which I mentioned in an earlier post. It's worth looking at in detail. It says that ‘about an additional 200,000 workers are needed by 2030 to meet expansion demand on top of those required to replace the existing ageing workforce.’ However, instead, it noted that there were ‘declines in key parts of the workforce and high rates of hard-to-fill vacancies in critical occupations such as engineering project managers, electrical & mechanical engineers, engineering technicians, welding and engineering construction trades (e.g. crane drivers, steel erectors) alongside a wide range of other occupations key to energy transition’.
At the same time, it said ‘we are seeing stagnation or reduction in the supply of young people into these roles. Apprenticeships in engineering and manufacturing have seen a 34% fall over the last decade. Engineering degrees by UK students have remained fairly static at about 28,000 per year over the same period, and while some disciplines such as mechanical engineering have seen growth, electronic and electrical engineering have seen a decline.’
Clearly something has to be done. And there are some signs of action. As I noted in a recent post, the Labour government has set up initiative, Skills England, which aims to develop a nationwide skills strategy and provide levy funds for businesses to spend on training and future-proofing the workforce, with green skills being key, especially for younger people now entering the jobs market. Research has suggested that only 5% of the ‘Gen Zs’ in the workforce believe they currently have the green skills required to help drive a net-zero transition, but nearly 78% of them believed that if they were offered training they would improve key green skills that would assist with corporate efforts to decarbonise.
There have also been proposals for energy skill passports, to enable cross-sector recognition of energy industry expertise and training, in particular designed to help enable retraining and reskilling of oil and gas workers for clean energy roles. A preliminary test version has created career pathway information for over thirty oil and gas roles and entry routes into the wind industry. Many companies are also setting up support schemes. For example, E.ON’s Chief People Officer, Chris Norby, told last year’s Westminister Employment Forum conference that E.ON had hired 4000 people over the past 3 years, supported with a skills learning infrastructure, with 180 re-skilling apprenticeships including digital technology capabilities
Of course it could be argued that, to an extent, market forces will sort out some this, the labour market responding to demand for people with the necessary green skills. For example renewables firms are increasing salaries due to green skills shortage. The latest Global Energy Talent Index, including the results of research among 12,000 energy professionals across 149 countries, suggest that the growing green skills gap is making workers with renewable energy expertise ever more sought after. 51% of low-carbon energy workers received a pay rise last year. 24% of the workforce stated that the pay rise was above 5%.
However, it could also be argued that government could play a more strategic role, by formally requiring companies to provide the necessary training in order to be eligible for state funding of renewable projects. Indeed, government strategic planning could include skill training as a key factor in any energy funding taxonomy. In the EU context, it could be that European Investment Bank (EIB) could have similar requirements as a condition for investment support, with possibly JASPERS, the EC/EIB funded Joint Assistance to Support Projects in European Regions programme, playing a role. The recent adjustments of the EU State Aid system may also provide an opportunity for skills-related issues to be taken account of in new green energy subsidy arrangements. Terry Cook at the OU has been working in this area and we hope to see a report on it soon. He has noted that skill upgrades are clearly seen as urgent and not just in terms of energy jobs. For example, the new EC Strategic Foresight report has ‘Demand for Future Skills’ as the priority, saying that growing skills disparity could impede the twin green and digital transitions.
There is certainly a lot going on in the EU and elsewhere in this general area, as indicated in a new IPPI overview exploring the links between green jobs and the just transition, and advocating for ‘a holistic approach that not only accelerates the transition to a green economy but also ensures that this transition is inclusive, just, and beneficial for all’. Not an easy thing to do, even given the boom in green energy.
It’s true that renewable energy is creating new jobs, replacing some of those lost as fossil fuel related employment falls. However, it is not a seamless transition and it may take time. And although some of the skills involved with building and operating renewable energy systems are similar to those that some people already have, not all of them are the same. Some of the new green energy technologies need people with specialist skills and, as we have seen, some of these may be in short supply.
The IPPI report tries to address issues like this and is quite comprehensive, offering a series of sensible policy suggestions. But it warns that ‘no one size fits all – there are diverse paths to green job creation’. Even so, it urges policy makers to be bold and back green job creation, since it says the associated policy risks are ‘relatively low’, and the potential outcomes are very attractive: ‘a transition to a greener economy that not only addresses the challenges of climate change and environmental degradation, but also cultivates inclusive, prosperous societies with aligned socio-economic objectives.’ That sounds a worthwhile goal- but not an easy one to achieve fast, given the various vested interests in maintaining the status quo that exists in the economy.
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