Opinion Piece

Skill shortages are still threatening APAC’s renewable future

Author: Daniel Gaefke, APAC Director, BayWa r.e.

The International Renewable Energy Agency (IRENA) have released their 2022 Renewable Energy and Jobs Review. On the surface, it looks like there’s a lot to celebrate. The sector employed 700,000 more people last year, two thirds of them in Asia.

This brings the total number of people employed in renewable energy to 12.7 million worldwide. Solar is the fastest-growing sector, employing more than 4.3 million. This is some seriously impressive growth. In fact, it’s almost nearly good enough. This growth will even further accelerate with an expected global renewable energy workforce of 38 Mio by 2030.

Those of us who keep a closer watch on the renewables sector are spotting challenges on the horizon. We’re soon going to hit a ceiling where a lack of skills and training starts putting a hard cap on how fast those employment figures and the industry itself can grow.

APAC reflects a worrying global trend

This is a particularly biting problem in APAC, but we’re not alone. PWC recently pointed out that the UK needs a pipeline of 200,000 skilled employees to keep its energy transition on track. The country’s existing education and employment infrastructure simply cannot provide that many people.

Here in APAC, we’ve been championing a better-skilled workforce for some years. IRENA’s report appears to confirm a number of our predictions. Despite strong employment figures for renewables (189,000 in the Philippines alone), regulatory environments are too volatile. We’re lacking the certainty that businesses will need before they invest in training.

The situation in Vietnam captures this issue perfectly. Past years saw a PV renaissance; the country went from 105MW of total solar capacity in 2018 to 17GW in 2020. High feed-in tariffs incentivized so much new solar production that the national grid had trouble handling it all.

Then… silence. The Vietnamese government has confirmed that no new wind or solar projects will be added to the grid throughout 2022. This massive curtailment has sent the number of people working in solar from 126,300 in 2020 to 31,700 this year.

Vietnam, like a number of APAC countries, risks making the same mistakes as Germany. Early legislative enthusiasm and subsidies gave way to apathy, and jobs have stagnated since 2017. In either country’s case, why would companies invest in training staff when legislation might make them redundant in five years?

Fixing the renewables skills gap

So, what needs to happen if we’re to fix this problem? Last year’s IRENA report put forward two scenarios. Their proposed pathway limits global temperatures to 1.5°C above pre-industrial levels. This would help us avoid the most debilitating effects of climate change. If we pull it off, we’ll create 43 million jobs in renewables over the next three decades.

But IRENA’s proposed pathway is not the current plan. Right now, world governments’ energy plans and targets will only create about 26 million renewables jobs by 2030. You can imagine what this shortage of ~25 million skilled workers will do to our ability to protect our planet.

Markets crave long-term, stabilising solutions. Thailand’s recent bidding round for ~1GW of clean energy is welcome, but it came completely out of the blue after seven years of relative quiet. You can’t plan for opportunities like that and you certainly can’t train for them.

Lawmakers need to start removing the volatility and uncertainty from their renewables markets. If clear, stable regulations replace short-term incentives, people will feel secure enough to dedicate their careers to renewable energy.

A more stable environment needs to be paired with investment in education. Sizeable revisions need to bring renewables into curricula where they’re barely mentioned today. The renewables skills gap can’t be fixed by investment alone, time is a key piece of the puzzle.

However, we also must look at ourselves. The industry as a whole must actively promote the many interesting career paths we can offer in this exciting industry. We must create training programs to enable interested applicants to join the industry at different stages of their career. We should actively create apprentice programs and support training programs in partnership with local universities and vocational schools to accelerate the rate of new joiners and to ensure that good industry standards and practices are part of the curriculums.

It’s said that the best time to plant a tree is five years ago, and the second-best time to plant a tree is today. The APAC renewables market has already lost much time to turbulence. We can’t get that time back, but the second-best time to fix it is right now.


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