Building a ‘Fair and Fast’ energy transition? Renewable energy employment, skill shortages and social licence in regional areas

Abstract

Within techno-economic models for climate and energy scenarios, labour is assumed to be available just-in-time – even as cost-optimisation electricity system modelling typically generates development profiles with sharp peaks and troughs which would make labour supply and management very challenging. Local job creation is often framed as a key benefit for regional communities and important for building social licence in host regions to enable rapid, large-scale renewable energy development. Yet, whilst there is a large body of studies projecting employment volumes under climate and energy transition scenarios, there has been limited empirical research on the challenges, opportunities and solutions for labour supply and workforce development within local and regional labour markets.Through a study of five renewable energy zones being established within an electricity system dominated by coal generation in New South Wales (Australia), our study contributes to the understanding of the employment constraints that could emerge and need to be addressed for a ‘fair and fast’ energy transition. As the global transition to renewable energy accelerates, local workforce development will become more important as competition for labour intensifies. However, significant barriers to building a regional workforce for renewable energy are identified including ‘boom-bust’ development cycles, the depth of regional labour markets in key occupations, competition for labour across inter-connected sectors, the concentration of socially disadvantaged communities in under-employed populations and demographic changes, especially population ageing.Based on the case study, four key policy implications are identified for other jurisdictions. Firstly, ‘smoothing’ the development profile to avoid boom-bust cycles can be implemented consistent with renewable energy targets aligned with the Paris Climate agreement. Secondly, there needs to be a coordinated approach between government, industry and training providers to build training capacity – market-led approaches are unlikely to work for renewable energy in regional areas. Thirdly, training and employment pathways need to be built for diverse labour market segments to develop a regional workforce, including disadvantaged groups outside the workforce. Fourthly, renewable energy should be managed as part of an ‘ecosystem’ to develop a workforce that can move between renewable energy and adjacent sectors such as resources, infrastructure and manufacturing.