RIYADH: The number of jobs in the global energy sector reached 68 million in 2023, representing a 3.8 percent rise compared to the previous year, according to an analysis.
In its latest report, the International Energy Agency said that the sector added 2.5 million jobs worldwide in 2023, driven by a wave of investment in manufacturing eco-conscious technologies.
The IEA released its study at a time when international leaders have rallied in Baku, Azerbaijan, for COP29, where discussions are going on to elevate renewable energy growth globally to tackle climate challenges.
During the opening ceremony of COP29 on Nov. 11, Simon Stiell, executive secretary of the UN Framework Convention on Climate Change, affirmed the growth of the renewable sector and said that clean energy infrastructure investments are expected to reach $2 trillion in 2024, nearly double that of fossil fuels.
“The global energy sector has been a powerful engine of job growth around the world in recent years, and as the energy system continues to transform and grow, rising demand for skilled energy workers is a given,” said the IEA’s Director of Sustainability, Technology and Outlooks, Laura Cozzi.
Clean energy sector leading growth
According to the IEA, employment in the clean energy sector increased by 1.5 million last year and contributed as much as 10 percent of economy-wide job growth in the leading markets for clean technologies.
The report said that the solar PV industry added over half a million new jobs, spurred by record new installations, while employment in electric vehicle manufacturing and batteries grew by 410,000 as sales reached nearly 20 percent of the global car market.
Even though several wind manufacturers implemented layoffs as rising costs contributed to a slower-than-anticipated offshore project pipeline, total employment in the sector still climbed as a record number of new projects entered construction.
The IEA said that jobs in the oil and gas supply sector increased by around 3 percent, or 600,000, in 2023 after a period of cautious post-pandemic rehiring, while global coal employment fell for the third year in a row, declining by around 1 percent year on year.
“Global coal employment fell in both supply and power, largely due to continued mining productivity gains and a slowdown in the pipeline of new coal-fired power plants compared with the highs of the last decade,” said the report.
Employment in manufacturing vehicles with internal combustion engines rose by 440,000 positions, just outstripping job additions in EVs.
In China, clean energy made up over 90 percent of energy job growth, while fossil fuels accounted for 80 percent of the gains in the Middle East.
The analysis also said that the growth in energy jobs was led by manufacturing — diverging from previous years when it was generally led by construction and installation.
“This largely reflects the 70 percent rise in clean energy manufacturing investment in 2023 to $200 billion as firms responded to increasing demand for clean energy technologies and new policies,” added IEA.
Skill shortage continues in energy sector
According to the report, shortages of skilled workers remain a major concern for employers looking to hire in the global energy industry.
The IEA said that the lack of skilled workers in many parts of the industry — particularly those requiring high degrees of specialization, such as grids and nuclear power — remains a substantial bottleneck for the sector.
A survey conducted by the agency found that over 190 energy employers across 27 countries reported plans to hire but had difficulties finding qualified applicants for nearly all occupation categories.
“Governments, the private sector, and educational and training institutions must work together to improve the hiring pipeline, which will play an important role in shaping our energy future,” said Cozzi.
The report added that intense competition for talent in clean energy sectors is prompting firms to hire aggressively in anticipation of future growth — a tactic that could prove effective but may also leave some companies exposed to uncertainties related to project flows and changing policies.
The analysis said many firms facing shortages of qualified applicants are also increasing on-the-job training to deliver these skills.
According to the IEA, countries transitioning to clean energy are experiencing substantial employment growth in the sector. In 2023, job creation in clean energy accounted for over 10 percent of overall job growth in China and 4 to 6 percent in economies such as the US, EU, and Japan.
The analysis added that clean energy’s share of new jobs is below 2 percent in many emerging and developing economies.
In September, another report released by the US Department of Energy revealed that the clean energy sector in the country added 142,000 jobs in 2023, representing a rise of 4.2 percent compared to the previous year.
In October, the Indian government said that the total number of jobs in the country’s renewable energy sector reached over 1 million by the end of 2023, led by hydropower which provides 453,000 employment opportunities in the Asian nation.
The IEA added that wages in the energy sector are rising, reflecting increasing competition for skilled workers.
“After real wages fell in many regions in 2022, growth resumed in much of the world in 2023, though absolute wages generally remain below pre-pandemic levels. Wages for energy-specific roles have broadly fared better than those for more generic occupations relevant to the energy sector, notably for technicians,” said the report.
The analysis revealed that the rising wages in the energy sector are partially a response to skills gaps, as firms aim to attract new workers from within and outside the industry.
The IEA added that clean energy wage increases were, on average, greater than those in fossil fuels, even in major oil, gas, and coal-producing countries.
Future outlook
According to the IEA, employment in the energy sector is set to grow by 3 percent in 2024, a slowdown compared with last year due to the impacts of tight labor markets, elevated interest rates, and changes in the expected pipeline of new energy projects.
“While clean energy firms seem set to take more bullish positions on hiring in anticipation of growth, less diversified fossil fuel firms have been remaining cautious for now. As a result, fossil fuel job growth is expected to stall in 2024,” said the agency.