Pathways to Net Zero: How we can meet skills, training and labour needs

The net zero transition has significant implications for Australia’s skills base. The development of new energy generation infrastructure and supply chains depend on a strong talent pipeline.

A skilled workforce is not just critical to successful delivery; potential access to talent to build and operate is increasingly a key factor in investment decisions. For energy firms, access to the right skills and the ability to flexibly deploy skilled staff to meet business needs can be a source of competitive advantage.

For new and emerging technologies, access to skills is critical to the level and pace of adoption. Australia is already part of a fierce global competition for skilled workers. Among other areas, this includes long-standing trade- and tertiary-qualified roles, such as lines people and engineers (civil, electrical and more), and emerging specialist roles, such as battery system, grid integration and hydrogen production engineers.

Preparing for order-of-magnitude workforce change requires a concerted effort by government and industry to incentivise employment of people where they are most needed in the economy. It will also necessitate far-reaching changes to Australia’s education and training system, likely supplemented by skilled migration.

The Net Zero Mobilisation Report cites modelling that as many as 850,000 jobs in Australia’s energy sector need to be filled by 2060, from a base of 100,000 today. Significant jobs growth is required just to provide for Australia’s domestic energy needs. Additional growth is slated for the export sector, as Australia looks to become a global leader in renewable energy sources such as compressed hydrogen and ammonia, and across niche areas such as advanced manufacturing.

Existing jobs are also impacted by the introduction of new technologies. Workers need to be prepared to work safely in new energy environments, such as with turbines, batteries and hydrogen. And as new energy technology permeates our life, we will need to significantly uplift social awareness and understanding of how to safely interact with these new technologies.

Here are some key considerations we believe should guide Australia in planning for future workforce requirements.

1. Australia will need a flexible workforce as the transition peaks and plateaus.

The demand for workers is greater in the construction phase and lower in the operations phase. This means governments have an important coordination role to create greater certainty around the pipeline of work.

Done right, this will enable individuals to see trade and construction work as a career option and allow businesses to move resources from project to project. This will be particularly crucial for specialist roles in high demand across projects.

Jobs in demand during the initial electrification phase include electrical tradespeople, as well as electrical engineers. By contrast, the maintenance phase will require more traditional fitters, plumbers and mechanics, but also rare and highly qualified electrical engineers who are capable of monitoring impacts on city-wide grids.

Ongoing productivity improvements through digital transformation and automation are likely to reduce the need for human labour. For example, artificial intelligence (AI) might allow drones to conduct maintenance inspections of wind turbines, rather than requiring a human inspector to physically drive to each one.

2. Government, industry and the education system need an accord to drive the skills transformation.

The key workers needed by 2030 are already in the workforce, while future entry-level workers are still in school, higher education or training.

While entry-level workers can always be recruited, skilled professionals, technicians and tradespeople require a development pathway of up to 10 years. For example, a chartered engineer requires a four- or five-year engineering degree and at least five years of post-graduate experience.

Australia’s universities and TAFEs will need to develop new curricula that focus on renewable technologies. Initially, this should involve creating certificate III and bachelor-level qualifications that provide essential skills for working on renewable energy projects. In the longer term, the training system must adapt to evolving energy technologies, emphasising post-trade and post-graduate qualifications to facilitate workforce upskilling.

Yet there are limited incentives to invest in training programs until demand fully exists. That is why the upcoming skills transition needs to be driven by government and industry – with the education system supporting it – not the other way around. An accord among these groups is needed.

A shortage of skilled workers is often coupled with even greater challenges in securing experienced teachers. So meeting workforce demand in the energy sector needs to be a shared responsibility among stakeholders. Critically, businesses can no longer rely solely on “buying” experienced personnel. Instead, they need to adopt a “build and retain” mindset, with a significant increase in business investment in apprenticeships and paid cadetships.

3. Skilled migration is part of the solution.

Almost certainly, targeted immigration programs are needed to attract students and workers with appropriate qualifications, or those who are capable of completing bridging courses to become work-ready.

Skilled migration will be particularly valuable for experienced and highly paid roles that are globally competitive. For example, battery systems engineers (who manage the flow of energy from a large-scale battery into the national grid) are highly qualified engineers. It is very hard to train them locally because the industry is nascent, so there is nowhere for them to generate the required skills to lead a project.

While filling gaps through skilled migration may be politically controversial, developing a net zero workforce cannot occur overnight.

4. The location of jobs will matter.

The nation’s energy transition depends on a skilled population relocating along with the jobs. In the case of renewable energy projects, this means that thousands of people will have to live in regions for several years while new assets are built.

Unless regional economies can scale to provide longer-term job security and lifestyle opportunities, communities are likely to experience an influx of fly-in fly-out workers, similar to the mining industry, or see numerous worker accommodation camps scattered on the outskirts of towns. The location of export jobs is also uncertain and relatively small changes in project costs could shift projects to different parts of the country.

Access to skills will be particularly critical for smaller jurisdictions such as the Northern Territory and Tasmania, which already experience worker attrition to other regions – heightening the challenge to compete for specialised renewable energy skillsets.

5. Don’t forget the need for social licence.

Social licence is a vital issue that needs to be considered to gain and maintain support for the transition. As part of obtaining social licence, it will be important to ensure people and groups with poorer labour force outcomes are provided with opportunities to benefits from the transition.

Queensland, New South Wales, and to a lesser extent, Victoria have large workforces supported by traditional carbon-based energy sources. These workforces are a potential source of labour, but also demonstrate the political risk of the transition.

We could turn for guidance to the European Union, which has a Just Transition Mechanism – a financial incentive to encourage retraining of coal and mining workers.

You can read more about social licence issues in an earlier piece in our Pathways to Net Zero series.

Federal and state governments

• How can the education system best support the immediate and longer-term skilling challenges?
• Is there willingness to invest in regional communities to support the long-term relocation of workforces?
• What new policies can be enacted to substantially incentivise business take-up of apprentices?
• How should apprenticeship and post-trade pathways evolve to respond to changing needs?
• What extra resources need to go into retraining existing workers and helping them to adjust?

Industry

• How can industry work with government and educational institutions to design more practical employment pathways?
• What is required to encourage industry to invest greater resources into training and apprenticeships?
• How can businesses play a more prominent role in course and curriculum design?
• How can employers work more collaboratively to develop, deploy and retain critical skills?

Get in touch to discuss how these issues impact your organisation.

Connect with Hamish Ride, Cornelia Chong and Hamish Stein on LinkedIn.