The energy workforce: A human capital conundrum

In the Power Playbook: The energy transition requires an overhaul of skilled professionals to usher in our net zero ambitions. But reskilling and upskilling pose a critical challenge: how will this be funded and who do we look to, to do so.

The energy sector faces a critical workforce challenge: the need to upskill and reskill employees to meet the demands of a rapidly evolving industry.

Whether renewables, e-mobility, energy storage, or digitalisation – to name a few elements of the transition – the energy landscape is transforming before our eyes and companies need to invest heavily, both in recruiting new talent and upskilling employees to bridge the skills gap, which has only been growing wider.

According to the Enlit whitepaper, Making it work: tackling the energy transition workforce challenge, to bridge the headcount gap, recruitment needs to become a strategic issue.

Perspective by numbers

The sheer numbers support the sentiment.

Enlit’s report cites statistics from the EU’s Joint Research Centre (JRC), which investigated the workforce challenges posed by the energy transition.

In its policy brief Skills for the energy transition in the changing labour market, it found that the energy transition will significantly increase demand for workers. These new jobs range from highly technical engineering roles in transmission and distribution, digital and data science, through to the many manual and semi-skilled roles to instal and maintain distributed, low-carbon infrastructure.

The JRC’s research cites different industry associations’ predictions for the headcount required to deploy the transition.

Up to 350,000 new transition-related manufacturing jobs will be created; at least 500,000 installers will be needed to meet REPowerEU’s heat pump target, with another 800,000 people needed to work in Europe’s battery industry. While demand for new jobs varies across different countries, the scale on a national level can be immense.

National Grid, for example, believes 400,000 new jobs must be filled if the UK is to meet its clean energy requirements.

More on the workforce challenge:
Preparing for AI & ML: Bridging the utilities skills gap
Addressing the energy skills crisis – How to make your culture a magnet for talent

Who is going to fund all of this?

Of course, one of the first sources that comes to mind is that of the public sector.

Whether the European Social Fund Plus (ESF+), the Just Transition Fund, or even National Recovery and Resilience Funding plans, the public domain does offer options for investing against the skills gap.

But it’s not enough and, according to the Enlit report, 65% of respondents believe that European politicians do not sufficiently recognise the employment opportunities of the energy transition.

It explains that negative economic headwinds mean there is little budget to support the massive training required to upskill and reskill the hundreds of thousands of people in the European energy industry over the next two decades.

Of course, while governments have set net-zero goals, there has been a lack of incentives to build new talent to deliver the targets.

Additionally, 68% of respondents said that public sector investment into reskilling will be what solves the skills gap issue – the second most selected option.

Then there is private financing.

Energy firms can of course allocate funds internally into apprenticeships and training regiments to train and upskill employees, and there are different examples of innovative forms of financing coming from the private sector.

Specifically, Enlit’s report recommends companies invest in vocational training and apprenticeships; the former to retrain experienced labour from other industries, the latter to help promote working opportunities in the sector.

But private companies doing it alone, also, isn’t enough.

Take it from Adriana Villalobos, an HR expert in the energy sector and former Global Human Resources Business Partner at Siemens Energy.

Said Villalobos in the report: “The message is much stronger when it comes from outside the private sector. We need partnerships between private organisations, nonprofits and government. When you bring these people in, the energy transition is unavoidable.”

The proof is in the…partnerships

These partnerships are what will prove key.

According to the report, the energy transition has always been a collaborative effort between governments and industry and the workforce challenge is sufficiently acute to warrant closer public-private collaboration to design innovative solutions.

And Enlit isn’t the only one discussing the impacts of such partnerships.

Take it from the World Economic Forum, which lists innovative ways to unlock funding for the skills revolution.

The first of these is Siemens’ SiTecSkills Academy, which uses a blended funding model to provide technical training to Siemens’ workforce and that of its external partners.

The content draws partly from the company’s vocational education training on digitalisation and sustainability. By securing government co-financing of up to 25% under Germany’s Qualification Opportunities Act and sharing training costs with its partners, Siemens then ensures long-term employability and alignment with evolving industry demands for its workers.

There is also Iberdrola’s Global Green Employment (GGE) platform, which the utility giant describes as a digital meeting point between those who wish to focus their future career in the green employment sector and the business and educational agents that can contribute to making it a reality.

Announced in 2023, Iberdrola cited agreements with universities, specialised schools, vocational training centres, companies, institutions and job offer portals in their effort to create an international catalogue of job and training opportunities available to applicants.

Commenting in the report was Manuel Vila Braña, Head of Global Employability, Iberdrola: “Right now, we are trying to fix the problem at the end of the line, not at the start of the line.

“The main problem is that we are not teaching people the skills that we will need in 10 or 15 years. There’s a huge gap. That’s why we are working very closely with all kinds of partners: public administration, private companies, training centres, universities.”

In India, the country’s energy giant Adani Energy announced in February the opening of a $230 million academy with a focus on next-gen green skills. The academy is the result of a partnership with Singapore’s government-owned ITE Education Services (ITEES) to build a skills talent pipeline.

Recipe for success

Clearly, with the right partnerships, something can be done about this human capital conundrum.

Enlit’s report makes it clear: the fundamental challenges affecting workforce recruitment in the energy sector—especially its financing—cannot be solved by any one organisation alone.

Taking this further, Andrei Covatariu, Co-Chair of the Digitalization in Energy Task Force at the United Nations Economic Commission for Europe, says in the report:

“The long lead time to upskill, reskill or train students can’t be solved with cash. Policies can help by delivering subsidies. But no matter how big the subsidies, it doesn’t happen overnight. Without planning it will be chaotic. It takes time.”

With the energy transition in full swing, headcount and skills shortages are no longer just an HR issue—it’s a boardroom issue. Investing in technology is essential, but so is investing in people. If companies can’t fill critical roles fast enough, the pace of the transition itself is at risk.

But what do you think? Is the skills gap a shareholder priority? What’s needed to unlock the workforce of the future? And how have you seen the public and private sectors collaborate to address this?

I’d love to hear your thoughts—reach out and let me know.

Originally published on Enlit World.