The inaugural edition of the IEAs World Energy Employment Report has sought to quantify the global energy employment market for the first time. Pulling together data by technology and value chain segment, the research found that prior to the pandemic energy employed 65 million people worldwide- accounting for 2% of global employment. In positive news, the report estimates that post-pandemic, total energy employment in 2021 was up around 1.3 million from 2019 and could increase by another 6 percentage points by 2022. Further, clean energy accounts for virtually all of the growth in energy employment[i], and the oil and gas sector has not yet recovered from the pandemic, having seen some of the largest declines in employment. As we look ahead, it is believed that energy employment is set to shift rapidly as countries and companies accelerate efforts to decarbonise and meet net zero emissions pledges.
Energy employment by region and economic sector, 2019
“Energy employment spans many economic sectors, with manufacturing and construction of new projects dominating today’s energy workforce”[ii]
Where most regions have already surpassed 50% of their energy workforce working within the clean energy segment, notable exceptions include Russia and the Middle East. It is Asia-Pacific leading the way in terms clean energy employment, currently accounting for more than half of the overall employment total. The IEA pinpoints expanding energy infrastructure and access to lower-cost labour as key drivers behind this- China alone accounts for 30% of the global energy workforce. In addition, the IEA finds that many clean energy segments rival the workforce in conventional energy segments, for example low-carbon power generation (mainly solar and wind) employs 7.8 million, on par with oil supply[iii].
The research noted the large proportion of energy workers, around 45%, in high-skilled occupations, compared to just 25% across the economy. It found that this share was even higher for jobs in research and development an area they predict to grow rapidly to 2030. In all employment scenarios produced by the IEA for the net-zero transition, it predicts growth in clean energy employment which will outweigh declines in fossil fuel jobs. “In the Net Zero Emissions by 2050 Scenario, 14 million new clean energy jobs are created by 2030, while another 16 million workers switch to new roles related to clean energy.”[iv]
To combat a potential shortfall, the IEA recommends strategic planning now to ensure that scaling is not hampered by a shortage of skilled workers. As a recent report by S&P notes, recruitment is already proving a challenge: “89% of solar companies surveyed for the National Solar Jobs Census by the U.S. Interstate Renewable Energy Council, or IREC, reported difficulties finding qualified applicants last year, citing competition, a small applicant pool, and a lack of training, experience and technical skills.”[v] Establishing market strength in these segments will rely upon both industry and government investing in training and skilling workers for the future.
“Countries around the world are responding to the current crisis by seeking to accelerate the growth of homegrown clean energy industries. The regions that make this move will see huge growth in jobs. Seizing this opportunity requires skilled workers. Governments, companies, labour representatives and educators must come together to develop the programmes and accreditations needed to cultivate this workforce and ensure the jobs created are quality jobs that can attract a diverse workforce.”-IEA Executive Director Fatih Birol.[vi]
Interestingly, energy sector wages are typically higher than the economy-wide average, ranging substantially from 10% to 50% across advanced economies alone. However, it is the more established industries such as nuclear, oil and gas which offer the highest wages. Opportunity exists for newer clean energy segments to provide more attractive and secure job roles, for example, some sectors such as solar, do not have the same labour protections and union representation as established fossil fuel industries, especially in emerging market and developing economies.
As a Chatham House article on “Financing an ‘African’ just transition” states: “It is vital that ‘green jobs’ doesn’t just mean short term construction work or high-tech jobs often undertaken by expats, but long-term, secure employment in sectors that contribute to national development.”[vii] Diversity will also be a fundamental area to address- the percentage of women in the energy workforce is also consistently low when compared to economy-wide averages, with less than 15% in senior management positions.
The IEA notes that workers in coal and other fossil fuels have many of the skills needed to fill positions in growing clean energy sectors. Crucially, some fossil fuel companies are retraining workers internally for positions in low-carbon areas to retain talent or to maintain flexibility as needs arise. “However, this is not an option everywhere, and ensuring a just transition for affected workers is a growing focus for policy makers in many regions, especially for coal, which has already seen consistent declines since 2015.”[viii]
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”