Author: Matthias Taft, CEO, BayWa r.e.
The renewable transition is rapidly accelerating. While we are still off the pace required to meet climate goals, the energy transition has made incredible progress and is set to expand even faster.
According to McKinsey, global installed capacity of solar, onshore and offshore wind projects will quadruple from 2021 to 2030, as the EU and the U.S. race to build the needed clean energy projects for the transition. This will require a huge demand of qualified and experienced talent to install, operate, and service these facilities.
And herein lies the challenge: the renewables sector is already struggling to find enough energy workers with the skills to maintain current progress. With massive scaling and expansion, a looming skills crisis is posing a serious risk to the transition and, in turn, climate goals.
Why is there such a big skills gap in one of the most dynamic and fastest growing industries in the world? And what do we need to do to bridge this gap?
In actual figures, McKinsey predicts that the global renewables industry will need a total of 1.1 million workers to install wind and solar plants and another 1.7 million to operate and maintain them by 2030.
However, there is only a limited talent pool and job seekers are fiercely fought over. As my colleague Sanda Bozic recently told Reuters: the renewables industry is competing with established sectors, which benefit from existing infrastructures, expertise and policies. There is already a shortage of qualified personnel for installation roles, an area which is expected to make up 80% of solar jobs in 2030.
In the same article, Stefan Hobmair underlines BayWa r.e.’s challenges in finding field service personnel for our operations and maintenance activities. This is not least due to demographic shifts, especially in Germany, which as Europe’s biggest solar market is predicted to lack a staggering five million workers by 2030.
The U.S. faces similar challenges. In the wake of the Inflation Reduction Act, S&P Global sees an expected growth of close to one million additional clean energy jobs each year in the next ten years. Yet 89% of solar companies already struggled to staff their positions in 2021.
It has not helped that in the past, governments had mixed messages about renewable energy. This has made it more difficult for companies to plan and forecast, which in turn had an impact on the confidence they can give to the market about potential jobs.
The APAC region, especially Vietnam, is a prime example. From 2018 to 2020, the country increased its solar capacity from 105 MW to 17 GW, at one point increasing it 25-fold, according to the World Economic Forum. When afterwards, however, no new renewable projects were announced by the government, the number of workers in solar fell from 126,300 in 2020 to 31,700 in 2022.
It therefore comes as no surprise that one of the key observations of IRENA’s 2022 Renewable Energy and Jobs report is the call for a comprehensive policy framework that caters to the continued expansion of green jobs, including policies for the required education and skills development.
However, it is not only a challenge to attract qualified employees, but in the face of so much competition it is then crucial to keep them. Career development opportunities, the chance to switch roles, and opportunities for promotions are all essential.
This is something we at BayWa r.e. Global understand at a deep level. Within a supportive environment and international corporate culture, we have been successful with jobseekers who want a career with opportunities, where their voice matters and where they can drive innovation for a sustainable future.
We will definitely have to recruit from other sectors to meet our headcount though, as my colleague Louise Christensen rightfully says. This means employing people with no previous expertise in the renewables sector. However, new skills can be learnt and we very much welcome their fresh views and ideas, while also benefiting from their wider industry experience.
Currently, there are not enough pathways for people to enter the renewables industry. Governments and industry bodies/organisations need to play a more active role when it comes to funding training and development initiatives for green jobs. They must identify skills gaps across the value chain for workers and create respective opportunities for them.
There have been steps in the right direction. As part of the new Green Deal Industrial Plan, the European Commission pledged a number of measures to support skills development.
The educational sector also has a special responsibility to highlight the benefits of jobs in the renewables industry. Academia needs to provide related courses and make students not only aware of its current technologies, but also the latest innovations.
Moreover, young people need to know sooner that renewables are an exciting, viable and worthwhile career path. And here, the renewables industry must look to itself as my colleague Daniel Gaefke highlighted in his 2022 article about APAC’s skills gap and the opportunity it provides for the region.
Policymakers, the educational sector and the energy industry need to work together to promote reskilling and upskilling of the existing workforce. To ensure a fresh and sustainable pipeline of talent, we must make it easier to gain the necessary experience and expertise for green jobs.
Addressing it would mean unlocking a new generation of exciting jobs and careers, and all of the associated socio economic and economic benefits that would come with them. Failure to recognise this would not only mean passing up an incredible opportunity, but also putting the pace of the transition at risk. Something we simply cannot afford to happen.