The global energy sector experienced a strong boost in employment in 2023, driven by rising investments in clean energy technologies. This information comes from a new report by the International Energy Agency (IEA). The World Energy Employment Report reveals that energy sector jobs grew by 3.8% last year, reaching a total of 68 million globally. This growth outpaced the broader economy, where job growth was 2.2%.
Among the various energy sectors, cleanenergy saw the largest gains, with 1.5 million new jobs created in 2023, contributing significantly to overall employment growth. The clean energy sector alone accounted for 10% of all global job growth in leading markets for clean technologies.
CLEAN ENERGY DRIVES EMPLOYMENT GROWTH
The surge in cleanenergy employment was largely fueled by the rapid expansion of solar power and electric vehicles (EVs). The solar photovoltaic (PV) industry added more than half a million jobs. This growth happened as a record number of installations were completed worldwide. Similarly, the electric vehicle and battery manufacturing sectors created 410,000 new jobs. This occurred as EV sales reached nearly 20% of the global car market.
The wind industry faced some job cuts in certain manufacturing sectors. Yet, it still saw overall employment growth. This growth was driven by a record number of new wind projects entering construction.
In contrast, the oil and gas sector saw a significant rebound. It added 600,000 jobs in 2023. This happened after a cautious post-pandemic recovery phase. However, the coal industry continued to decline. Global coal employment fell by about 1%. This decrease resulted from ongoing productivity improvements in the upstream sector.
MANUFACTURING EMERGES AS KEY DRIVER OF JOB GROWTH
In 2023, manufacturing became the primary driver of employment growth. This was unlike previous years when construction and installation led job creation. This shift reflects the 70% increase in clean energy manufacturing investment. This investment reached $200 billion due to strong demand for cleanenergy technologies. Supportive government policies also contributed to this growth.
Manufacturing jobs played a crucial role in accommodating the global push for clean energy solutions. They included the production of solar panels, wind turbines, batteries, and EV components. This trend underscores the growing importance of a skilled workforce capable of handling the complexities of cleanenergy technology production.
SKILL SHORTAGES: A MAJOR BOTTLENECK FOR GROWTH
Despite robust job growth, the energy sector faces a significant challenge in meeting its demand for skilled workers. The IEA report highlights that many employers continue to struggle with severe labor shortages. These shortages are particularly acute for highly specialized roles in sectors like grids, nuclear power, and energy storage.
The IEA surveyed over 190 employers across 27 countries. According to the survey, 75% of respondents report difficulties in hiring qualified candidates for construction roles. This signals that labor shortages are still a key issue. This shortage has led to increased wages in the energy sector, outpacing wage growth in other sectors of the economy.
For the second consecutive year, employers have indicated difficulty finding qualified applicants for almost all job categories. This situation reflects a growing skills gap. It threatens to hinder the sector’s ability to scale in line with the rising demand for clean energy solutions.
NEED FOR INVESTMENT IN SKILLS AND TRAINING
Laura Cozzi, IEA’s Director of Sustainability, Technology, and Outlooks, emphasized the importance of investing in education. She highlighted the need for training to address the skills gap. “As the global energy sector continues to evolve, there is an undeniable demand for skilled workers,” she said. “Governments, businesses, and educational institutions must collaborate to build a talent pipeline that supports the clean energy transition.”
The report highlights that future growth in the energy sector relies on a robust workforce. The workforce must be equipped with the right skills. This is crucial as the sector adapts to new technologies and moves towards sustainability.
CHALLENGES FOR EMERGING ECONOMIES
Developed economies have concentrated many of the clean energy job gains. Meanwhile, emerging and developing economies, particularly outside of China, have struggled to capture their share of clean energy employment growth. Despite representing two-thirds of the global workforce, these regions have seen only one-quarter of clean energy job growth since 2019.
Limited manufacturing capabilities pose significant challenges. A shortage of skilled labor and insufficient infrastructure also hinder these economies. These obstacles prevent them from attracting the investment necessary to create clean energy jobs. These barriers highlight the necessity for global cooperation. Targeted policy actions are needed to ensure that developing regions are included in the global clean energy transition.
OUTLOOK FOR 2024 AND BEYOND
Looking ahead, this global sector is expected to continue its job growth trajectory, though at a slower pace. Early data suggests that employment will grow by 3% in 2024. This growth represents a decrease compared to 2023. The impacts of tight labor markets, higher interest rates, and shifts in the pipeline of new energy projects contribute to this change.
Despite the slowdown, the long-term outlook for energy sector jobs remains positive, especially in the clean energy and manufacturing sectors. With continued investments in renewableenergy and emerging technologies, the global workforce is poised for sustained growth. Still, addressing the skills gap will be critical to maintaining momentum.
ROAD AHEAD FOR ENERGY EMPLOYMENT
The global energy sector has been a strong driver of employment growth in recent years, particularly within clean energy industries. In 2023, the sector achieved significant gains, especially in solar PV, EVs, and energy storage. Nonetheless, a shortage of skilled workers continues to pose a significant challenge. We must address this skills gap through increased investment in training. Education is also crucial for sustaining future growth. This will ensure the energy sector can meet the demands of the global clean energy transition.
As countries worldwide continue to emphasize clean energy and sustainability, the need for a skilled, diverse workforce will only intensify. Governments, businesses, and educational institutions must work together. They need to build a workforce capable of supporting the future of energy. This future must be green, innovative, and sustainable.