RENEWABLE ENERGY JOBS: MAIN FINDINGS
The renewable energy sector employed 12 million people, directly and indirectly, in 2020.1 The number has continued to grow worldwide over the past decade. The solar photovoltaic (PV), bioenergy, hydropower and wind power industries have been the largest employers. Figure 1 shows the evolution of IRENA’s renewable energy employment estimates since 2012.
These employment trends are shaped by a multitude of factors (see Figure 2). Key among them is the rate at which renewable energy equipment is manufactured, installed and put to use (largely a function of costs and overall investments). Costs, especially of solar and wind technologies, continue to decline. With relatively steady annual investments, lower costs have translated into wider deployment. An increase in investments would boost future job creation, even allowing for growing labour productivity. Policy guidance and support remain indispensable for establishing overall renewable energy roadmaps, driving ambition, and encouraging the adoption of transparent and consistent rules for feed-in tari-s, auctions, tax incentives, subsidies, permitting procedures and other regulations.
The geographic footprint of renewable energy employment – the physical location of the jobs – depends on the dynamism of national and regional installation markets; on technological leadership, industrial policy and domestic content requirements; and on the resulting depth and strength of the supply chain in individual countries. As the industry changes and matures, policy instruments must be fine-tuned.
The complex impact of COVID-19
The COVID-19 pandemic loomed over the global economy for most of 2020 and 2021, a-ecting both the volume and structure of energy demand. Employment, including in the energy sector, has been deeply a-ected by repeated lockdowns and other restrictions which put pressure on supply chains and constrained economic activity. Across the global economy, millions of jobs were lost and many others put at risk. According to the International Labour Organization (ILO, 2021), 8.8% of global working hours were lost in 2020, equivalent to 255 million full-time jobs. Available information indicates that women were more aected than men, given that they tend to work in sectors more vulnerable to
economic shocks. This comes on top of a long-standing imbalance in the energy sector, including renewables, i.e. a marked gender inequality. A two-page feature on this topic begins on page 18.
In renewable energy as elsewhere in the economy, the ability of companies and industries to cope with the pandemic and comply with social-distancing requirements in the workplace varies enormously. Companies and government agencies face not only the direct health impacts of the virus, such as sick and quarantined workers or temporary factory shutdowns, but also the economic repercussions of border closures and interruptions in deliveries of raw materials and components.
In many countries a cycle was established in which delays were followed by surges of activity. This reflected the newfound reality in which countries’ varying degrees of success in reducing COVID-19 infections alternated with a resurgence of cases. But some of the late surge was also driven by developers rushing projects to meet permitting deadlines (some of which were extended in response to pandemic delays) or reacting to impending changes in policies, such as expiring tax credits, phaseouts of subsidies or cuts in feed-in tari-s. In a sense, the pandemic further amplified the ups and downs seen in the sector in ordinary years. Due to the mobility constraints inherent in the COVID-19 policy response, transport energy demand was far more a-ected than electricity use. This played to renewables’ advantage, in that the bulk of renewable capacity has been installed in the power sector, whereas renewables’ role in transport fuels remains quite small for the time being. An added wild
card were the extreme swings in the price of oil during parts of the year, triggered by oversupply and a price war among some major producers. Cheaper petroleum fuels had the e-ect of diminishing demand for biofuels.
Renewable energy employment by technology
This section presents estimates for employment in solar PV, liquid biofuels, wind and hydropower. Less information is available for other technologies such as solid biomass and biogas, solar heating and cooling, concentrated solar power (CSP), geothermal energy and ground-based heat pumps, waste-to-energy, and ocean or wave energy. Most of these other technologies also employ fewer people (see Figure 4). Observations on o–grid and mini-grid developments are also o-ered here, as well as glimpses at other energy transition technologies (battery storage and green hydrogen).
EMPLOYMENT FOR A CLIMATESAFE FUTURE: OUTLOOK FOR THE ENERGY TRANSITION
Accelerating the energy transition in line with global climate and development objectives will continue to have significant implications for employment in the energy sector as well as the wider economy. The energy transition can create many new job opportunities along the value chain. Reaping the benefits and overcoming challenges in this regard requires a deep understanding of the interplay of the energy transition with economies and societies. For this reason, IRENA has put forward a comprehensive approach that links the world’s energy systems and economies within one consistent quantitative framework, which allows socio-economic indicators to be compared under dierent scenarios. All other things held equal, this leads to an analysis of the impacts of the energy transition expressed in the indicators of employment, gross domestic product and welfare.
HYDROPOWER: Jobs in hydropower are expected to amount to 3.7 million37 in 2050 under the 1.5°C Scenario. For one, this is because significant hydro potential has already been exploited, implying smaller incremental capacity additions, and thus slower growth than newer technologies. In addition, new hydro installations increasingly have to be aligned with eorts to protect natural habitats and to minimise social impacts and conflicts surrounding the use of water resources among di-erent communities and countries that share watersheds. Some regions may see more hydro development, and hence job creation, than others; for instance, hydro power is growing fast in Africa owing to some large-scale projects and, to date, limited environmental regulation and local community protection laws that make further development of large-scale hydro resources possible (IRENA, 2021e forthcoming).
SKILLS NEEDS FOR THE ENERGY TRANSITION
The energy transition o-ers significant employment opportunities across di-erent countries and market segments. Education, skills, training and retraining will support realignment. The trends in the educational requirements of the energy sector call for better co-ordination between the sector and educational institutions. An integrated approach to labour and educational policy and planning will be needed to address this challenge, and also to better integrate the educational requirements in the energy sector with those of other sectors. Part of the answer will lie with e-orts to better anticipate emerging trends that influence education levels and specialisations. Another aspect concerns identifying
transversal skills, i.e., skills that are not exclusively related to a particular job or task but rather are applicable to a wide variety of work settings and roles. Despite positive trends and recent developments, skills gaps and shortages are increasing and likely widespread across countries unless proactive measures are taken. In highincome countries, including those even with well-developed skills anticipation systems, a lack of both technical and transferable core skills remains a significant recruitment barrier for employers, while developing countries are especially challenged by deficiencies at higher skills levels. Many of the most significant changes in skills and occupations in the green economy are taking place at higher skill levels, requiring university education. This represents a critical barrier for many low-income countries, where university graduates and high-level skills in general tend to be in short supply. These may constitute a constraint on the net-zero transition.
Occupational patterns and skill levels
Renewable energy employs people across all trades and levels. IRENA’s analysis of the human resource requirements for the solar PV (IRENA, 2017a) and onshore wind (IRENA, 2017b) industries shows that over 60% of the workforce requires minimal formal training. Individuals with degrees in fields such as science, technology, engineering and mathematics (STEM) are needed in smaller numbers (around 30%). Highly qualified non STEM professionals (such as lawyers, logistics experts, marketing professionals or experts in regulation and standardisation) account for roughly 5%, while administrative personnel make up the smallest share (1 4%). In oshore wind, the proportion is similar: those with
lower skills and training again represent the largest share of employment (47%) (IRENA, 2018). When it comes to the value chain of SWHs, less than 10% of the human resources required are for STEM and non-STEM professionals. In comparison, the remaining 90% required are workers with minimal or no certification (IRENA, 2021d) (see Figure 15).
THE JOBS AGENDA FOR A JUST TRANSITION
As the world navigates to a climate-safe energy system centred on renewables and energy e«ciency, it seems clear that more energy jobs will be created than lost, especially if governments ensure strong policies in support of deployment and integration of renewables. Workforce development is essential, and job quality deserves increasing attention. While skills training is important, policy makers need to understand it within a broad, holistic policy framework. Among other measures, that framework embraces industrial policies, labour market policies, social protection measures, and diversity and
inclusion strategies. This final chapter discusses this holistic approach for a smooth and successful energy transition.
A comprehensive policy framework for jobs and a just energy transition
This report reveals the need for a holistic approach to policy making that focuses not only on policies and programmes in the energy sector itself, but builds on a sophisticated understanding of the close inter-connections between energy, the economy at large, and social and planetary sustainability. This implies a need for renewable energy policies that are linked to structural change and the assurance of a just transition – all within a holistic global policy framework (see Figure 22).
A critical dimension in all of this is the proper balance between the public and private sectors – and their
respective strengths and weaknesses. In past years, the policy landscape has been focused on enabling
private sector actors and reducing risks, and it has yielded maturing technologies and lower costs. But this alone will no longer su«ce. As the climate challenge mounts, strategic action is urgently needed to deliver a comprehensive, holistic and just transition. A speedy and co-ordinated approach requires governments to take on a much more proactive role, acting in the public interest and safeguarding broad social imperatives. This may occur through regulations and incentives, public investment strategies, and public ownership of transition-related assets and infrastructure (both at national and community levels). As the policy discussion continues to evolve, it is likely to yield varying answers in di-erent national settings.