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    The challenge of labor demand in the face of a necessary energy transition

    January 23, 2023 - CE Noticias Financieras


      By Irene Stur

      The energy transition means, in its development, the disappearance of thousands of jobs but, at the same time, the generation of many thousands more. The International Energy Agency (IEA) estimated this proportion when it published, at the time, its first radiography of employment in the energy sector, for the last quarter of 2022.

      Having recovered pre-pandemic levels, it is estimated that power generation employs 11.3 million people worldwide and more than 50% of them (6.8 million) work in the renewable sector. Although one might think that wind energy leads in employability, the truth is that it is solar energy that generates the most jobs worldwide, ahead of coal and hydropower.

      The same proportion in the distribution of employment, according to the type of energy, was found in both Europe and South America. Only in Africa, the Middle East and Eurasia are hydrocarbons the most important in the labor market.

      Argentina is betting on hydrogen as a key element for the transition, either green (coming from renewable energies) or blue (from the use of gas). This bet is one of those announced by the province of Santa Cruz.

      According to the IEA report, both the gas and oil sectors showed an upturn in employment, as a result of the incentive towards the transition, as well as in the search for gas liquefaction. The latter leads the generation of jobs in this sub-sector.

      Different studies address the labor demand situation in relation to the energy transition in the sectors involved. Most of them show a positive balance in the destruction-generation equation of conventional employment.

      Training is vital to find -in the transition- another job opportunity.

      The IEA analyzed that the most cost-effective path to achieve net zero CO2 emissions by 2050 (Paris commitment) could lead to an increase of 14 million jobs in the energy sector and this is expected to occur by 2030, hand in hand with clean energy investment. And a decrease in the hydrocarbon sector of some 5 million jobs. The equation yields a strong figure in favor of demand.

      Meanwhile, another study by the World Economic Forum agrees with the IEA on the positive balance in terms of employability that the development of renewable energies will generate, although with more cautious figures. It estimates the generation of some 10.3 million new jobs against a loss of 2.7 million jobs by 2030. Even so, the result in favor is overwhelming.

      Although they still have a lot to give, and there is no argument about that, hydrocarbons and a sector of mining will be suppressing their labor force over time. But they are currently struggling to attract qualified personnel, while in the renewable energy sector the opposite is true.

      The clean energy sector attracts a large pool of qualified talent to work in electrical efficiency, power generation and electric vehicles, for example. Meanwhile, traditional fossil fuel companies have a much narrower pool of potential hires.

      "The renewables sector is hiring five times as many people as the traditional oil and gas sectors," said Ryan Carroll, regional director in Australia and New Zealand for Airswift, a global energy recruitment firm.

      Airswift, in its 2022 Global Energy Talent Index (GETI) report, which surveyed 10,000 energy professionals around the world, shows that "concern about climate change" is behind the decision of 80% of workers to join or leave an energy company.

      Not only do these companies hire more and more scientists, engineers and experts, but they also offer friendlier and more diverse work environments. This is less common in traditional oil and gas or mining companies.

      Another example of this shift can be seen in Australia, the world's leading exporter of iron ore and the second largest exporter of coal. Although they are the best paid in the country, fewer and fewer professionals are graduating for this sector. But those preparing for clean energy development are on the rise.

      By 2030, clean energy will generate some 14 million jobs globally.

      According to the Australian Minister for Natural Resources, Madeleine King, one of the reasons for this to happen is "the opinion that many young Australians have about caring for the planet" and that includes mining, despite the fact that it is known that many professionals and qualified miners will be required to access the "rare earths" necessary for a green energy transition.

      Hence mining, globally, stresses its green credentials. And the need for sustainable extraction, marking elements such as copper and lithium as essential for the transition.

      On the other hand, although the labor balance is positive, the reconversion of the conventional labor force is essential so that no one is left by the wayside.

      This is why training for workers in the "conventional" sector will be essential so that they can find another employment opportunity in the transition.

      "To take advantage of this opportunity requires qualified workers. Therefore, governments, businesses, unions and education must come together to develop the necessary programs and accreditations to cultivate this workforce and ensure that the jobs created are quality jobs," said Fatih Birol, executive director of the IEA.

      And that is the challenge. Transforming today's difficulties into tomorrow's opportunities


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