This ninth edition of IRENA’s Renewable energy and jobs: Annual review series provides the latest estimates of renewable energy employment globally. In addition to IRENA’s own calculations, the report is based on a wide range of studies and reports by government agencies, industry associations, non-governmental organisations and academic experts. The report first surveys the global renewable energy employment landscape as of 2021. It then discusses employment results for selected countries with respect to deployment trends, policy contexts and pandemic impacts, with an eye to job quality as well as job numbers. It explores job quality and related issues in the upstream and downstream segments of the renewable energy supply chain. Throughout the report, particular attention is given to the regional distribution of employment within countries, to the gender dimension, and to trade.
These employment trends are shaped by a multitude of factors, including costs, investments, and new and cumulative capacities, and by a broad array of policy measures to enable renewable energy deployment, generate viable supply chains and create a skilled workforce. The COVID-19 pandemic continued to affect the global economy during 2021, altering both the volume and structure of energy demand. Domestic market size is a major factor that affects employment generation in construction, installation, and operations and maintenance (O&M). Building or maintaining a strong equipment manufacturing industrial base also needs sufficiently large and steady domestic demand. Only a few countries have become significant equipment producers. Trade restrictions may be required to protect a fledgling local industry, but policy makers need to strike a careful balance between such efforts and minimising costs for renewable energy projects.
RENEWABLE ENERGY EMPLOYMENT BY TECHNOLOGY
This chapter presents estimates for employment in solar PV, wind, hydropower and liquid biofuels. Other renewable energy technologies included in Figure 3 employ fewer people, and there is typically less detailed information available on them. For any given technology, the main segments of the value chain include manufacturing of equipment, construction and installation, and O&M, plus a range of support services, enabling functions and governance aspects.
The world scored a new record in 2021, producing 132.8 GW of solar PV capacity installations, up from 125.6 GW in 2020. China accounted for 53 GW (40%) of the 2021 additions. It was followed by the United States, India and Brazil, all of which set new annual records. Germany, Japan, the Republic of Korea, Spain and the Netherlands were the next largest sites of PV solar installations, but all of them failed to surpass their earlier peak volumes (IRENA, 2022a). Solar PV manufacturing is highly concentrated, at both the corporate and country level. Polysilicon is first processed into ingots and wafers, which are then manufactured into cells and assembled into modules. Among wafer producers, the market share of the top ten firms rose from 62% in 2016 to 95% in 2019 (USAID and Power Africa, 2022). The top ten solar PV module manufacturers shipped more than 160 GW in 2021, giving them a
90% share of the global market. There is a significant degree of vertical integration among wafer, cell and module manufacturing operations (Shaw and Hall, 2022).
In 2021, the wind energy sector installed 93 GW of capacity, the second-largest annual addition after 2020. China was in the lead, even though the 47 GW added was considerably less than the previous year. The United States followed, with 14 GW, about the same as in 2020.Other leading installers were Brazil, Viet Nam, the United Kingdom, Sweden, Türkiye, Germany, India and France (IRENA, 2022a). Record offshore wind additions of 21.3 GW were achieved despite continued COVID-19 impacts and strains on supply chains (Clark et al., 2022). They could not compensate for the lower rate (71.8 GW) of onshore installations, however (IRENA, 2022a). China installed more than 80% of new offshore capacity, driven by an impending phaseout of feed-in tariff subsidies for grid-connected projects (Clark et al., 2022). Just three Chinese companies accounted for 57.5% of global wind installations (Barla and Lico, 2022).
Based on industry experience, the Global Wind Energy Council (GWEC, 2022) assessed wind deployment pathways under a “green recovery scenario”, underlining the job potential in five developing countries. The study estimated that wind power installations between 2022 and 2026 and O&M during project lifetime would create some 230 000 direct and indirect full-time equivalent job years in India, 115 000 in Brazil, 59 000 in the Philippines, 37 000 in South Africa and 29 000 in Mexico.
Global hydropower capacity expanded by 25 GW in 2021, with China alone adding almost 21 GW. Canada, India and Viet Nam added about 1 GW each, and European countries added about 1.5 GW.
Nameplate capacity and operational capacity can differ significantly. A number of countries ended 2021 with somewhat less operational capacity than in 2020 (IRENA, 2022a). In the United States, a severe drought in the Pacific Northwest and California resulted in decreased water supplies and diminished hydropower output (US EIA, 2022b). In addition to serving their domestic markets, companies from a number of countries play prominent roles in selling hydropower equipment in export (Figure 8).
COVID-19 substantially slowed activities in the off-grid sector in 2020 and 2021, with less than 500 megawatts (MW) added each year. The largest share of new additions in 2021 (318 MW) was in off-grid solar PV. Just 114 MW of off-grid hydro was added in 2021 (IRENA, 2022a). According to GOGLA, an industry association, sales for off-grid solar lighting products in the second half of 2021 recovered to almost 4 million but remained 10% below preCOVID sales in the second half of 2019. Sales under pay-as-you-go schemes (in which poor households pay in instalments rather than upfront in cash) increased. The sector still struggles with supply chain disruptions, rising prices and a slow recovery from income
losses. Recovery has been marked by wide disparities across countries and regions, as well as across product categories (lanterns, multi-light systems and solar home systems) and business models. West Africa recorded a 23% increase in sales and South Asia a 19% gain over the first half of 2021. In contrast, sales in East Africa rose by a meagre 4%. Within regions, individual country experiences diverged widely (GOGLA, 2022).
RENEWABLE ENERGY EMPLOYMENT IN SELECTED COUNTRIES
This chapter presents employment statistics for several leading countries as well as a few other selected countries. The chapter also explores employment in different states or provinces of these countries. As in previous editions, the focus is on China, Brazil, India, the United States and members of the European Union (Figure 12 and Table 1), the countries that lead in equipment manufacturing, project engineering and installations. Overall, the bulk of renewable energy employment is in Asian countries, which accounted for 63.6% of these jobs in 2021.
UPSTREAM AND DOWNSTREAM ASPECTS
A CHANGING SUPPLY CHAIN LANDSCAPE
The global supply chain landscape for renewable energy keeps shifting. A handful of countries established themselves as leading manufacturing hubs for projects worldwide. The COVID-19 crisis has put a spotlight on the wisdom and viability of maintaining farflung supply chains. Security of supply – of finished products, key components such as semiconductors or raw materials critical to renewable energy – has become a concern in the context of ongoing supply chain disruptions, trade disputes and geopolitical rivalries. Supply chain worries in the emerging energy system differ from those in conventional energy. Fossil fuel–based economies are vulnerable to disruptions in the flow of the fuels themselves (oil, gas and coal). For renewable energy and other energy transition–related technologies, the concerns centre on access to raw materials (such as silicon, copper, cobalt, lithium and rare earths) and processed materials (such as steel and aluminium), together with the ability to produce or reliably procure manufactured components (such as semiconductors, solar PV cells and inverters, and wind turbine blades and towers).
LOGGING AND MINING FOR THE ENERGY TRANSITION: JOBS AND OTHER IMPACTS
Governments, civil society groups and academics are increasingly scrutinising industry practices in the
commodity sector with regard to environmental and labour standards, consequences for local communities and impacts on jobs and job quality. Concerns include the logging of balsa wood used in wind turbine blades, which sometimes adversely affects indigenous communities (Box 4), and the mining and processing of various minerals and metals for different types of renewable energy equipment and other energy transition–related technologies, such as batteries.27 China is the dominant producer of several metals and minerals critical for manufacturing renewable energy equipment. But several countries in Africa, Asia and Latin America also play critical roles. Peru, for example, is an
important source of copper, silver, tin and zinc; Indonesia figures prominently among nickel and tin producers; and the Republic of Congo produces copper (Ladislaw et al., 2021). Increased demand for these countries’ minerals could increase income and employment. However, the full extent of benefits can be reaped only if these countries develop the capacity to process raw materials, rising above the role of mere commodity producers with limited value-added generation. Such efforts are part of a larger challenge of overcoming deep historical dependencies within the world economic order.
DECENT JOBS AND SOCIAL PROTECTION FOR A JUST TRANSITION
CHALLENGES AND OPPORTUNITIES
Keeping average global temperatures to 1.5°C will require a swift and massive transformation of the world’s energy system, including a vast scaling-up of renewable energy installations, upgrading of power grids and other energy delivery systems, creation of large energy storage systems and many related measures – with enormous implications for industrial capacities along the supply chain and broad structural underpinnings of economies around the world. Demand for needed commodities and
intermediate and finished goods will soar, competing with demand from other sectors. Workforce development is essential to making the energy transition successful. It needs to be addressed in the context of a broad policy framework that includes industrial policies, education and skills training, labour market policies, diversity and inclusion strategies, and regional revitalisation and social protection measures.
TAKE-AWAYS AND THE WAY FORWARD
AN ALL-ENCOMPASSING APPROACH TO POLICY MAKING
The energy transition can bring many benefits. Employment in the renewable energy sector continues to expand, especially in the solar PV and wind industries. There are also growing employment opportunities (along with challenges to ensure that jobs are decent) in the upstream portions of the renewable energy value chain and in a circular economy approach after projects reach the end of their lives and are decommissioned. Growing numbers of countries are participating in the renewable energy market. But most of the jobs created to date have been in a relatively small number of countries, led by China and including Brazil, India, the United States and EU member states. These countries lead in installations. Reflecting their strengths in equipment manufacturing, engineering and a range of services along the value chain, some of these countries also dominate exports of renewable energy equipment.
Their experience affirms the importance of adopting ambitious energy transition policies. IRENA’s work points to the need for a comprehensive policy framework driven by holistic analysis (Figure 17). Such an approach starts with deployment, integrating and enabling policies in the renewable energy sector itself, but it also incorporates dedicated policies and programmes to leverage and strengthen industrial capabilities, upgrade infrastructure, build skilled workforces and reduce structural dependencies in the economy that may obstruct a successful transition.
The renewable energy sector navigated the challenges posed by the COVID-19 crisis reasonably well. Supply chain disruptions triggered by the pandemic linger, however, and new challenges – such as the energy sector impacts of the war in Ukraine and rising trade barriers – have pushed up shipping costs, altered global trade patterns and led to commodity price volatility.30 Concerns about the security of supply of key semi-finished components and a range of raw materials needed for the energy transition is becoming a growing issue, though the needs and perspectives of different regions of the world vary.
The upshot is greater scrutiny of supply chains and raising the appetite for localisation. At the same time, there is tension between the desire for greater local production (and local value added) and the need to ensure that solar panels and wind turbines are affordable to encourage their growing use.