The Energy Transition and Jobs

There is a perception that jobs in the parts of the UK energy sector not linked to renewable, nuclear or low carbon power generation will decline abruptly due to our obligations under international climate law and Net Zero commitments. Such perceptions are influenced by the scars left from the employment losses after the collapse of the mining industry. Whilst this risk is ever present, our analysis provides some positive news. Ambitious targets set to meet net zero by 2050, the subsequent investment into the green economy and the high transferability of skills towards jobs in cleaner energy sub sectors indicate that net employment losses can be avoided.

The UK's race to decarbonise

In a global effort to combat the effects of climate change under the Paris agreement, the UK has set legally binding commitments to decarbonise across the economy. Furthermore, changes to the global energy supply chain brought about by current geopolitical events have sparked efforts to create a resilient energy system. Decarbonisation of the energy sector represents the first wave in the race to decarbonise, prior to electrification of the transport system and other hard to abate parts of the economy. Whilst good progress has been made in the investment of clean energy, such as power generation, there is still a way to go to meet the impending targets.

Targets / ambitions for the UK Energy sector

Net Zero by

2050

Emissions reduction by 2035 compared to 1990 baseline

Sunset jobs: will employment really collapse in the Energy sector?

The UK energy sector has a history of constantly evolving to reflect the requirements of society and resources available. Once again, the industry is facing a period of immense change as it moves to scale down its most carbon intensive energy production and catalyse investment in renewables, including investing in nuclear power generation with renewed impetus.

Green jobs: the demand for a Net Zero energy workforce

The UK faces a continuous rise in the demand for energy, with decarbonisation plans adding an additional hurdle to the scaling up of capacity, highlighting the need for a sizeable workforce to manage the transition. By 2050, the National Grid estimates that 400,000 roles will need to be filled to build the Net Zero Energy Workforce required to meet increased demand for renewable energy production and our net zero targets. 260,000 of these will be additional roles (equivalent to approximately 35% of the UK’s current energy workforce) and the remaining 140,000 will replace those who have left¹. These jobs will need to be filled across all regions of the UK, particularly in the North and South West where significant investments are being made into offshore wind and nuclear power.

¹ National Grid (2020) Building the Net Zero Energy Workforce.

"Upfront investment in training and development will be key to ensure we have a world class UK energy workforce. Government, industry, unions and the workforce all have a critical role to play to set this up for success."

_{Extract from interview with Paul de Leeuw, Director RGU Energy Transition Institute}

The challenge: meeting the demand for skills

The UK currently faces a large green skills gap which has deteriorated during the pandemic (as a number of long-term sick and older 50+ workers have left the workforce). Despite the relevant stock of skills from within the existing energy industry, there are barriers to future supply. The supply of skills will primarily come from the oil and gas industry, however, whilst 400,000 jobs are needed to build the Net Zero Energy Workforce to deliver on decarbonisation targets, only an estimated 270,000 people currently work in the oil and gas industry. Furthermore, a large proportion of these workers are set to retire as the UK faces economy-wide baby boomer retirement, with one fifth of energy workers expected to have exited the workforce by 2030. The remaining workforce will need to be transitioned into the adjacent renewables and nuclear sector, though despite high transferability of skills, additional upskilling to tailor these skills to green roles will still be required.

“The energy industry is evolving and our role in renewables and emerging energies is expanding at pace, which offers great opportunities for young people to be part of our energy transition journey.”

_{Extract from interview with Steve Wisely, Senior VP at Subsea 7}

Energy Policy Leadership

The UK government has reaffirmed its commitment to low carbon energy, and to balancing energy security and a stable and affordable transition via a mix of energy sources, through the Energy Security Strategy. The Strategy should help to provide businesses with a forward view on how much to invest in order to prepare for future skills demand.