Do we have sufficient skills for the energy transition in the changing labour market?

The energy transition will accelerate demand for labour at a time when industry is already struggling with shortages. The disruption caused by structural changes needs to be managed well to ensure that the labour market is fit for the net-zero age.

As the European Green Deal unfolds and transforms the industry, it is crucial to monitor its impact on the labour market in terms of changes of demand and supply. The energy transition and the expansion of EU manufacturing capacity could require over 1 million new jobs by 2030 at a time when the industry is already struggling with labour shortages.

For the energy transition to succeed, it is important to manage skills mismatches and invest in up- and re-skilling, highlights a JRC Science for Policy brief. At the same time, career paths need to attract a diverse pool of people, not only to close the gender gap, but also to attract the younger generation to replace the ageing labour workforce.

Doubled job vacancy rates in energy-related sectors since 2020

Jobs in renewable energy and other clean energy technologies are growing faster than in the rest of the sectors. However, after the pandemic, the EU labour market, like that of the entire OECD, saw increasing labour shortages across all industries.

In sectors relevant to the energy transition such as manufacturing, energy supply and scientific and technical activities, vacancy rates doubled from 2020 to 2023.

The biggest change occurred in the energy supply sector and manufacturing, where the job vacancy rate has increased the most since the start of the pandemic. In scientific and technical activities, the increase was smaller, but the job vacancy rate is at a much higher level - more than double that of the energy supply sector.

Population ageing, gender gap, and skills mismatch as persistent issues

The increase in job vacancy rates is primarly explained by the growth of the sector in the already tight labour market. For example, heat pumps and solar photovoltaics deployment have seen substantial growth in recent years, requiring an increasing number of installers, plumbers and electricians.

On the other hand, structural factors should not be downplayed. The electricity sector is one of the most affected by population ageing, as over a third of workers were 50-74 years old in 2021. In addition to a shrinking working age population, the energy sector – including renewables – remains male-dominated. Women account for only a third of total employment, narrowing the potential pool of workers.

The mismatch of skills is another structural element. Energy supply and manufacturing are among the sectors with the highest upskilling needs in terms of technical and job-specific skills. Fast technological change, digitalisation and automation, not only affect low-skilled jobs but also high-skilled professionals such as plant operators and electrical engineers, who are at risk of skills obsolescence without continuous on-the-job learning. Yet, employee participation in training in energy supply and manufacturing sectors was 14% and 10% respectively in 2022, falling short of the 60% target as envisioned under the European Pillar of Social Rights Action Plan by 2030.

Attracting and retaining skilled workers as part of the solution

The net-zero energy system relies on continued technological advancement and the shortage in high-skilled occupations may create bigger bottlenecks as it takes longer to obtain the required credentials.

To foster the needed research & innovation activity, it is essential to keep attracting and supporting a supply of highly skilled labour, with STEM (science, technology, engineering and mathematics) skills in particular. While the number of STEM graduates in the EU is increasing, a marked gender gap prevails and translates to a lower share of females participating in inventive activity.

Finally, workers’ preferences may be permanently changing with the unfolding of the twin transition and generational change. The net-zero energy system, which is more “tech-heavy” than the fossil fuel based one, has the potential to bring back some of the industrial jobs that have been disappearing from Europe. Importantly, energy transition needs to create quality jobs to renew societal trust in a labour market that creates life-long opportunities and security.

Cover photo: EU Science Hub