Powering towards net zero means doubling the electricity sector workforce – but addressing the skills shortage has its challenges.
Australia is racing towards decarbonisation of the electricity system, but a recent report from the Institute for Sustainable Futures (ISF), University of Technology Sydney found that delivering on the Federal Government’s renewable energy targets across the National Electricity Market (NEM) will require a doubling of the electricity sector workforce by 2029.
Most growth in the workforce will happen in wind, rooftop solar and distributed batteries, accounting for 80 per cent of the workforce. In a sign of the transition occurring to our energy system, there will be more jobs in electricity storage than domestic coal and gas generation by 2027.
The ISF was commissioned by The RACE for 2030 Co-operative Research Centre and the Australian Energy Market Operator (AEMO) to model workforce numbers required to deliver the Integrated System Plan (ISP).
The ISP uses three different energy scenarios or ‘development pathways’ for the NEM to transition away from coal power generation to renewable energy:
- Progressive Change – a slower rate of change due to a constrained economy and supply chains
- Step Change – broadly aligned with current government policy towards 2030 targets and net zero by 2050
- Green Energy Exports – a scenario that would see Australia become a ‘renewable energy superpower’, exporting green energy globally
Using a ‘Delphi Panel’ method, AEMO assigned likelihoods to each scenario, with 43 per cent for Step Change, 42 per cent for Progressive Change and 15 per cent for Green Energy Exports.
Our modelling approach
We modelled the projected workforce using an employment factor methodology, applying labour intensity factors (FTE/MW) for the construction, operation and maintenance and manufacturing of renewable energy technologies to projected installed capacity in the ISP scenarios. When we talk about jobs, we are referring to the total full-time equivalent (FTE) roles in a year.
An FTE could mean two people working on six-month contracts each across construction for renewable projects, or one person working full-time in operations and maintenance. We model jobs associated with construction, operations and maintenance, manufacturing and in coal and gas for domestic energy production (not export).
What is needed for the most likely scenario?
Under the Step Change scenario, we will need to grow the electricity sector workforce from 33,000 to a peak of 66,000 by 2029. More than 40 per cent of these jobs will be in rooftop solar and batteries, a sector that is projected to experience steady growth in coming years. Wind and solar farms represent a third and ten per cent of total jobs respectively. The workforce for transmission construction is smaller but the significant investment in transmission line infrastructure in regional areas sees jobs in transmission line construction increase three-fold.
Importantly, these projections do not capture all the workers. What isn’t included in these projections is the workforce upstream in the supply-chain (e.g. critical minerals mining) or associated with home electrification, energy efficiency and demand and energy management, meaning the workforce needed to deliver the energy transformation is much larger than presented here. To date there is limited understanding of this diverse and evolving workforce; data and information is urgently needed to support effective workforce planning.
The ISP only covers the states in the NEM, so Western Australia and the Northern Territory’s workforce requirements are also not captured here.
Jobs in operations and maintenance will become larger than construction in the 2030s
While there is a significant boom in construction jobs as renewable energy projects ramp up, by 2032 more than 50 per cent of the electricity sector workforce is in operations and maintenance.
By 2050, this number reaches 76 per cent, with the steady growth in consumer energy resources (CER), like rooftop solar and batteries contributing the demand for ongoing operations and maintenance roles.
Becoming a renewable superpower would require prodigious employment growth, especially in Queensland
Under the Green Energy Exports scenario, where Australia uses renewables to scale-up heavy industry and export green hydrogen to international markets, the electricity sector workforce would need to increase threefold by 2029. There would be an annual average of 82,100 jobs from now until 2050, if Australia pursues a green energy exports pathway.
In 2033, after construction to build infrastructure for the domestic energy transition peaks, a sharp drop in workforce numbers is projected, triggering an employment downturn during the 2030s. By 2039, however, things would pick up pace again as states invest in infrastructure for energy exports. By 2050, jobs would peak again at 120,000.
Under the Green Energy Exports scenario, Queensland is set to become the state with the most electricity sector employment, most of which will be driven by demand from wind farms. The modelling also doesn’t include the very large projects proposed in off-grid areas such as the Pilbara.
Significant employment growth is required even under ‘Progressive Change’ Scenario
Progressive Change (which was voted only one per cent behind Step Change in likelihood) assumes a significantly constrained economy and challenges with supply chains, including minerals, products and labour. Despite these constraints, the workforce would still need to grow by 19,000 to meet the peaks in construction by 2029.
How many jobs could be created by developing local manufacturing?
We also modelled an ‘enhanced manufacturing’ sensitivity, which assumes around 30 per cent of most renewable energy inputs are manufactured in Australia (wind, batteries, pumped hydro) or ten per cent in the case of utility and rooftop solar. At its peak, this scenario would add an additional 5000 jobs.
The local share of manufacturing is uncertain and will be shaped by a range of factors including funding from the Future Made in Australia package just passed by the Australian Parliament.
The challenge of growing the workforce
Building out the renewable energy projects required to support an orderly and timely closure of coal power stations has its challenges. As our modelling demonstrates, the workforce needs to grow significantly under each scenario. And this growth is occurring at a time when the electricity sector is experiencing a skills shortage.
As Australia’s Skills Priority List shows, there is a shortage of many of the essential occupations in the sector, with some in persistent shortage.
The skill and worker shortages in the electricity sector are further compounded by the ongoing growth of the major infrastructure project pipeline in Australia. Infrastructure Australia’s 2023 market capacity report highlights that labour shortages continue to constrain projects, and it is many of these same workers that the electricity sector is competing for against major infrastructure projects.
Historically, Australia has been dependent on skilled migrants to fill labour and skills shortages and gaps. While Australia intends to do the same again, this is happening in the context of a global renewables boom, with policies such the US’s Inflation Reduction Act driving unprecedented investment.
The training system is strained, and this shortage impacts on our ability to rapidly skill up potential workers. Similarly, the renewable energy sector is generally not well-connected with the vocational education and training sector – and it needs to increase investment in training.
In each of the modelled scenarios, there are huge employment peaks, driven by construction booms largely in the lead up to state targets. This will lead to boom-and-bust cycles, increasing skills shortages and negatively impacting regional host communities.
How can we build up the electricity sector workforce and deliver on our net zero targets?
Addressing the skills shortage is a vital step to growing our electricity sector workforce; to do this, we need to increase apprentices and build the training system’s capacity to be able to deliver more training.
Supporting young people and school students living in regional areas that are renewable energy zones into renewable energy training, could not only benefit them by providing career and employment opportunities close to home, but it could also ease labour supply issues and reduce the need for external workers in REZs.
The Federal Government has taken some steps to boosting uptake through its New Energy Apprenticeships Program. But making sure that renewable energy projects take on learning workers is also key.
Jobs and Skills Australia has recommended that the Australian Skills Guarantee – which sets mandatory requirements for ten per cent of labour hours on major Commonwealth funded constructions and ICT projects be completed by apprentices or trainees – be applied to renewable energy generation and transmission projects.
Government-funded initiatives, such as the Capacity Investment Scheme, Rewiring the Nation and grants from the Clean Energy Finance Corporation and the Australian Renewable Energy Agency, should have similar targets for trainees and apprentices. Government support is required to assist renewable energy companies meet targets as they themselves are experiencing shortages and constraints.
Increasing workforce participation from underrepresented groups is also a critical part of increasing our supply of skilled labour. It also makes for greater equity and diversity in a sector that lags well behind most Australian industries.
As Jobs and Skills Australia points out, we can’t grow the workforce at the pace and scale required if large groups of the population are excluded, including women, First Nations people, people with disability and recent migrants whose skills’ potential are underutilised.1
Pre-employment programs and specialised programs such as gender and First Nations targets, mentorship and employment-support initiatives, can play an essential role in creating a more diverse and inclusive workforce.
Lastly, smoothing the project pipeline could have a powerful effect in reducing skills and labour shortages associated with construction booms.
While there are challenges ahead as we transform our energy system and mitigate against climate change’s most negative impacts, there are also opportunities to reinvigorate our training system, direct government funds to on-the-job learning, and to create more equity and diversity in our sector.
