Employment in clean energy sector on the rise, exceeding declines in fossil fuels jobs, says IEA

Employment in clean energy sector on the rise, exceeding declines in fossil fuel jobs, says IEA

With the current energy crisis sweeping over the world, tighter supplies and higher prices have been in evidence, however, this has also left an impact on global energy employment, primarily in the context of clean energy transition efforts. In its assessment of energy jobs worldwide, the International Energy Agency (IEA) has outlined that employment is rising above pre-Covid levels, driven by clean energy and efforts to strengthen supply chains.

Illustration; Source: International Energy Agency (IEA)

The International Energy Agency’s inaugural edition of the World Energy Employment Report, maps energy sector employment by technology and value chain segment, providing a data-rich foundation for policymakers and industry decision-makers to understand the labour-related impacts of clean energy transitions and shifts in energy supply chains, following Russia’s invasion of Ukraine.

Based on the findings available in this report which offers “the first worldwide benchmark” for employment across energy industries, global employment in the energy sector has risen above its pre-pandemic levels, led by increased hiring in the clean energy sector.

Furthermore, the number of energy jobs worldwide recovered from disruptions due to Covid-19, increasing above its pre-pandemic level of over 65 million people, or around 2 per cent of the total labour force. The IEA says that the growth has been driven by hiring in clean energy sectors while the oil and gas sector saw some of the largest declines in employment at the start of the pandemic and has yet to fully recover.

Moreover, clean energy surpassed the 50 per cent mark with the recent rebound for its share of total energy employment, with nearly two-thirds of workers involved in building new projects and manufacturing clean energy technologies. Meanwhile, the oil and gas sector is also experiencing an upswing in employment, with new projects under development, notably new liquefied natural gas (LNG) infrastructure, as underlined by the IEA.

While the International Energy Agency believes that the energy sector is set to see its fastest employment growth in recent years in 2022, high input costs and inflationary pressures are adding to hiring and supply chain challenges already present in some regions and subsectors, such as solar, wind, oil, and gas. However, the IEA highlights that policy response to the pandemic and Russia’s invasion of Ukraine, including the U.S. Inflation Reduction Act, will continue to “add to new hiring demand and to shifting the status-quo of global energy supply chains.”

The International Energy Agency’s report counts energy jobs spanning the value chain, with around a third of workers in energy fuel supply – coal, oil, gas and bioenergy – a third in the power sector – generation, transmission, distribution and storage – and a third in key energy end uses including vehicle manufacturing and energy efficiency.

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This report shows that more than half of energy employment is in the Asia-Pacific region, reflecting rapidly expanding energy infrastructure in the region and access to lower-cost labour that has enabled the emergence of manufacturing hubs that serve both local and export markets, notably for solar, electric vehicles and batteries. In line with this, China alone accounts for 30 per cent of the global energy workforce.

According to the IEA, all of its scenarios underscore that clean energy employment is set to grow, outweighing declines in fossil fuels jobs. Therefore, 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. As new energy jobs may not always be in the same location nor require the same skills as the jobs they replace, the International Energy Agency points out that this requires policymakers to focus on job training and capacity building to ensure that energy transition “benefits as many people as possible.”

Fatih Birol, IEA Executive Director, remarked: “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.”

The report emphasises that around 45 per cent of the world’s energy workers are in high-skilled occupations, compared with about 25 per cent for the wider economy. Workers in coal and other fossil fuels have many of the skills needed to fill positions in growing clean energy sectors, elaborates the IEA, adding that fossil fuels employ almost 32 million globally.

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The International Energy Agency concludes that there is tremendous growth for energy employment on the horizon, driven primarily by new investments to decarbonise. In recognition of this, 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, the IEA claims that this is not an option everywhere, thus, “ensuring a people-centred and just transition for affected workers must remain a focus for policymakers,” especially in the coal sector where employment has been declining consistently for several years since 2015.