What does the green transition mean for energy jobs?

The energy crisis fuelled by Russia's invasion of Ukraine has put renewed focus on how countries generate and use their power, with several European nations rushing to wean themselves off Russian gas amid a global shift to cleaner energy sources.

As the world seeks to decarbonise by switching from fossil fuels such as coal and oil to renewables like solar and wind, many energy workers now find themselves in the same position.

The rise of clean energy is raising questions about who has access to these new jobs, what skills they require, how much they pay, and what can be done to help communities that rely on traditional extractive industries make the green transition.

The Thomson Reuters Foundation spoke to climate experts to find out more about what the changing energy mix means for jobs.

About 65 million people work in the energy industry worldwide, and clean energy workers now account for more than half of them, according to a recent report by the International Energy Agency (IEA).

These clean energy jobs include workers in bioenergy supply, low-carbon power generation including nuclear and renewables, power grids and storage, manufacturing of electric vehicles, and energy efficiency, according to the IEA's definition.

"It's clear that the clean energy economy isn't around the corner, it's here today," said Joel Jaeger, a research associate at the World Resources Institute, a think tank.

He said these jobs have been more resilient to the economic impacts of the pandemic compared to fossil fuel sectors, with oil and gas having not recovered their employment levels since 2020 despite the subsequent high prices of the two commodities.

If current international climate pledges are met, the IEA predicts that an additional 13 million workers will be employed in clean energy and related sectors by 2030, outnumbering the expected decline in traditional fossil fuel industries.

But if countries accelerate decarbonisation to get on a path to net zero by 2050, that number of expected jobs would double, the IEA says.

This transition could also change the gender imbalance of the energy industry: according to the International Renewable Energy Agency (IRENA), women hold 32% of jobs in renewable energy, on average, compared to 22% of those in oil and gas.

Jobs in clean and renewable energy are located around the world, but the biggest and fastest growing workforce is in Asia.

China, home to almost 30% of the global energy workforce, dominates the manufacturing of solar panels - also known as photovoltaics (PV) - and employs nearly half of those working in the field, according to the IEA.

"Different regions are further along than others," said Jaeger, pointing out that the Middle East and Russia are still dominated by traditional fossil fuel jobs.

"Emerging market and developing economies are going to have more jobs no matter what, because those economies are generally a lot more labour intensive," he said, citing the example of India where clean energy jobs now outnumber fossil fuel roles.

China's domination of solar PV manufacturing was partly made possible because the equipment is easier to export than other technologies, said Aurélien Saussay, an economist at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.

Wind turbines, by comparison, have strong regional hubs in northern Europe and the United States which are less threatened by competition from Asia, he said.

Energy jobs in both new and traditional sectors tend to be higher-skilled and better-paid compared to the rest of the economy.

About 45% of energy roles are high-skilled compared to a quarter of general jobs, according to the IEA.

However, workers in coal, oil and gas tend to enjoy higher wages than those in renewable industries like wind and solar.

In the United States, for example, workers in natural gas and coal have a wage premium of 59% and 50% respectively compared to national median hourly pay, far higher than the 36% for wind and 28% for solar, according to the U.S. Energy and Employment Report.

This may be because traditional energy jobs tend to be more unionised and have benefitted from decades of labour representation, while clean energy sectors have a larger share of part-time or contract work, according to the IEA's report.

This is especially true in emerging markets and developing economies, the IEA said, including in India where coal workers are paid around three to four times the national average.

Analysts also say that more lower-skilled jobs are becoming available as new clean energy sectors move from the research and development phase towards installation and construction of the new infrastructure.

This shift could mean new clean jobs offer less in terms of wages and security, yet are more accessible to those with lower levels of education.

The good news for fossil fuel energy workers is that many of their skills are transferable in a greener economy.

Those working on offshore oil rigs, for example, have many skills that would be useful to offshore wind farms, while project managers for traditional energy infrastructure will likely be well-equipped for similar positions in new industries.

The biggest issue, however, according to the economist Saussay, is that clean energy roles will not necessarily be created in the same places as traditional jobs which were tied to fossil fuel resources in relatively remote areas.

"They tended to be creating highly-paid jobs in areas that had high unemployment and low wages," Saussay added, highlighting traditional industrial regions around the world.

By comparison, clean energy jobs are more spread out and not concentrated in economically deprived areas.

He said this underlines the need to retrain and reskill traditional energy workers, while creating new employment prospects where they live to avoid social dislocation.

"If you don't put in place accompanying policies, what you end up with is a community that is bereft of economic opportunity," Saussay said.