A review on the future shape of the energy workforce by Robert Gordon University (RGU) reveals that if the region attracts £17billion of renewables investment, then 54,000 direct and indirect jobs could be secured by 2030, up from 45,000 currently.
However, the forecast scenarios also indicate that reduced ambition could see up to 17,000 jobs in the area at risk, cutting the workforce by up to 40% to 28,000 in just eight years.
The RGU ‘Making the Switch’
review indicates that much of the £17billion towards regional renewables activities needs to be front-loaded as capex funding within the next four years to establish new large-scale manufacturing and installation capacity.
The required investment is in addition to ongoing oil and gas expenditure in the region and will need close coordination between governments and industry.
The ‘Making the Switch’ report builds on RGU’s UK offshore energy workforce transferability review in 2021, which focused on UK wide forecasts. It shows different investment scenarios and the implications for the workforce.
With the North-East of Scotland hosting the largest energy skills cluster in the UK, representing around 28% of the UK’s offshore energy workforce and home to unique specialist knowledge and experience, the region has a critical role to play to deliver and accelerate the energy transition.
The findings of the report will be discussed at a major industry breakfast next Wednesday. Click here to secure your place.
Freeport bid 'crucial'
Professor Paul de Leeuw, Director of the Energy Transition Institute at Robert Gordon University, and the review’s lead author, said: “This review is an urgent call to action and highlights the size of the prize to create an exciting new energy future that will sustain and potentially grow the industry in the North-East of Scotland.
"Building on a legacy of over 50 years in oil and gas, there is a unique opportunity to re-shape a new energy future here. This will require rapid, targeted investment in the North-East of Scotland to develop the project, manufacturing, installation, commissioning and operational infrastructure for the renewables sector. Sustaining the oil and gas sector’s skills and capabilities over the coming years will be critical in ensuring the region has the workforce ready to deliver on this ambition.
“The energy transition will create exciting new opportunities and industry, governments and the education sector all have a key role to play. It will require a careful balancing act. The opportunity of getting this right has the potential to secure the region's economy as a global energy hub for decades to come.
"However, if we move too slowly, there won’t be a role for everyone, and it will risk a hard-hitting economic decline for the North-East of Scotland. This must be avoided at all costs.”
Russell Borthwick, chief executive of Aberdeen & Grampian Chamber of Commerce, said: "This excellent report highlights the opportunity that the energy transition presents this region, if we get it right.
"We need to create the conditions to allow companies to invest the £17billion required, highlighting how crucial it is that we have a stable tax regime in the North Sea.
"It also underlines just how important the region's green freeport bid is. If we don’t get it, Aberdeen and North-east Scotland will not realise its full potential on the road to energy transition and net zero.”
Key findings from the review:
- The shape and focus of the regional offshore energy workforce will need to change between 2022 and 2030 – In 2021, 90% of roles in the regional offshore energy workforce were in oil and gas, with the remaining 10% supporting regional offshore wind, hydrogen and carbon transportation and storage activities. In the global energy hub scenario, by 2030 around three out of five of the offshore energy jobs in the region are forecast to support the renewables sector.
- Sustaining oil and gas jobs over the coming years will be key to ensuring access to people and skills for renewables energy activities from 2026 onwards – Recognising the lead time for consenting and approving new renewables activities and the time required to establish new manufacturing facilities, it is forecast that most of the new jobs in the region will be created post 2026. With close to one in three people in the region either working in or supporting the wider offshore energy industry (direct, indirect and induced jobs), sustaining the regional oil and gas workforce over the coming years will be critical to ensuring a managed, just and fair transition.
- Sustaining and developing the sector’s skills and capabilities will be critical in ensuring the region has the workforce to deliver the energy transition – Realising the ambition for the North-East of Scotland to become a global energy hub may require close to 14,000 people in the region to move from oil and gas to renewables roles between 2022 and 2030. With more than 90% of the North-East of Scotland’s existing oil and gas workforce having medium to high skills transferability, most people in the region are well positioned to make this switch.
- Energy transition training and skills development will need to be targeted to meet the different needs of the workforce – Over 80% of people (close to 37,500 in total) who are currently working in the sector are projected to still be employed in the industry in 2030. Cost effective and readily accessible training will be required for people moving between energy sectors or for those who are entering the sector from other roles, as well as common certification, standards and accreditation.
‘Making the Switch’
states it is vital for the North-East of Scotland to retain its oil and gas workforce to provide ready-made skills to transition at the right time and support the required rapid green economy scale up.
The review assumes a ‘goldilocks zone’, where workforce reductions in one sector are matched by increased activities in an adjacent sector. Although the research indicates that there will be medium to high levels of transferability across many of the jobs, around 10% (c. 4,500 people) are likely to have lower transferability and will be disproportionately impacted by the changes.
The analysis by the Energy Transition Institute at RGU has been funded by the Scottish Government through the North-East Economic Recovery and Skills Fund (NEERSF). The findings and the regional assumptions are also aligned to the targets and ambitions set in the ScotWind licensing round and the UK Energy Security Strategy published in April 2022, with targets of 50 GW of installed offshore wind capacity, 10 GW of hydrogen generation and up to 30 million tonnes of annual carbon capture and storage for the UK by 2030.
As part of the review, RGU developed a dynamic planning model that provides insight on future workforce requirements, workforce movement between adjacent energy sectors and how to ensure a managed, just and fair transition. The model can also provide real-time insights on the job and transferability impact of specific investment or policy decisions. There are plans to update this model on a regular basis.