A recent PwC report has highlighted a potential skill gap of up to 200,000 jobs in the UK transition to green energy. Further concerns are also raised around diversifying the workforce and the risk of ‘sunset’ jobs.
With rapidly approaching net-zero targets and ever-evolving international climate laws, there has been the perception that jobs linked to fossil fuels and carbon intensive energy production will take a nose-dive. However, a recent report suggests that the switch to clean energy is expected to generate 200,000 net new jobs by 2030, but how smooth will this transition be?
The UK government has set ambitious decarbonisation targets, committing to reduce emissions by 78% by 2035 compared to 1990 levels, and to reach net-zero by 2050, in line with the Paris Agreement. As a result, the energy sector is undergoing a considerable transition, which will have a significant impact on the workforce and jobs.
The recent research, undertaken by PwC, investigates how the decarbonisation of the UK economy will affect the energy labour market, with a focus on what it labels ‘sunset jobs.’ These, it says, are jobs that will become redundant following the transition to a green economy.
The UK energy sector is set to face a period of immense change in the move to scale down carbon intensive energy production. The sector has already been through a prolonged period of disruption since the early 1990s, with the scaling down of coal generation, with only three active coal plants now remaining.
Whilst there were lessons to be learned from scaling down of coal production, and the subsequent job losses it created, predictions suggest that oil and gas workers will be disproportionately affected in the shift to renewables and low carbon energy.
It is expected that many energy workers will be presented with extensive career opportunities as their current roles become ‘green’, with the ability to transfer between oil and gas and low carbon and renewable industries. Alongside the transition of the current energy workforce, there will be growing career opportunities for new entrants coming in to the energy sector.
“With oil and gas activities declining in the UK, we are going to need a more flexible and agile energy workforce, enabling people to seamlessly move between adjacent energy detectors.”
Paul de Leeuw, Director RGU Energy Transition Institute.
An RGU transferability index estimates that 90% of workers in oil and gas have medium to high transferability skills as it evaluated the similarity of work activities, the skills undertaken in comparison to the adjacent energy sector and job availability. However, jobs in offshore facilities management, wells, drilling, subsurface, and catering were considered to have low transferability, making up only 6% of the overall energy workforce.
Touching upon the nuclear workforce, where the UK currently is running at its lowest capacity since 1982, the Nuclear Sector Deal supports the transfer of skills between other sectors, most notably gas, coal, and oil industries.
A 2020 report from National Grid estimates that 400,000 roles will need to be filled in the UK by 2050 to hit net-zero targets and meet increased demand for renewable energy production. Around 260,000 of these roles will be additional to the current energy workforce, whilst the remaining 140,000 will replace those that have left the industry.
However, despite the promising expectation of these roles and the predicted transferability of current jobs, there is still the concern of a skill gap which could hinder the ambition to reach net-zero by 2050. The current energy workforce is estimated at 270,000 with one fifth of these predicted to leave the industry by 2030 (mainly due to the baby-boomer retirement age).
Further analysis of this skill gap and the energy jobs sector shows that immediate progress needs to be made. With employment in the energy sector rising by only 2.3%, expected to increase to 3.8% in the 5-year period, the UK could well be behind the rate needed to reach a net-zero workforce by 2050.
Alongside reskilling the workforce, the report highlights the need to make opportunities available to all segments of the population, including varying ages, gender, and backgrounds. Historically, few roles have been held by women or ethnic minorities and more recently it has been reported that UK energy firms are paying men 20.2% more than their female counterparts.
With the UK government reiterating their commitment to low carbon energy and reaching net-zero by 2050, there needs to be policy underpinned to ensure continued investment in green energy and support to help companies effectively reskill and attract new entrants in to the sector.
