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Ashlynn Callery
Human Resources Generalist
Freedom Energy

As the global economy races to NetZero, the transition to a clean energy future affects every aspect of social society. Employment and the energy transition’s impact on the job market is a top concern for policymakers, businesses, and communities across the globe. Institutions like the International Energy Agency (IEA) and the International Renewable Energy Agency (IRENA) have been driven to provide the analytical data needed for governments to make successful policies and preparations to support the potential job growth opportunities and demand predicted because of the energy transition.  

Looking ahead; future effects of the energy transition on the workforce 

By 2030, it is anticipated that the energy transition will create 14 million jobs in the energy supply industry and an additional 16 million jobs in the clean energy sector, such as efficiency, automotive, and construction, for a combined total of 30 million jobs for people across the globe. 

Within the NetZero scenario, there is an anticipated loss of 5 million jobs in the fossil fuel industry by 2030; however, the loss is more than compensated for by new job opportunities. The projections are set on a global scale and, while promising, may present challenges for regions that are dense with extraction, refinement, and generation workers.   

Embracing the energy transition by identifying transferrable skills  

Many ‘traditional’ energy employees have skills readily transferable to renewable energy. Their skills can be applied to areas in the industry such as solar, offshore wind, hydro, decarbonization, carbon capture utility and storage, low carbon gas production and transportation, and the mining of critical materials such as lithium, copper, and cobalt.   

To prevent pockets of severe unemployment, government policymakers must ensure the availability of targeted technical training and skill development to help empower fossil fuel workers, ensuring a smooth transition to employment in the renewable energy sector. The enhanced policy will be critical to the energy transition’s success, but more is needed to fully ease the magnitude of the shift within the energy industry. Community colleges, state and local governments, and employers all have a role in ensuring workers develop the skills they need to be successful as their career paths are altered in the wake of global change.   

The Inflation Reduction Act (IRA) 

The Inflation Reduction Act (IRA) has created incentives to drive investment in places negatively impacted by the energy transition. IRA provides tax credits to employers that pay a prevailing wage and hire through certified apprenticeships. Additionally, many of the skills needed to build clean energy systems will align with the skills used to develop our original energy system, which should ease workers’ skill adjustment. The IRA is projected to create up to 9 million new jobs, which will be dispersed across the country, including in places dependent on fossil fuel production. The IRA operates by enhancing support from the private sector to drive investment into disadvantaged communities to create a cycle of innovation.2   

The energy transition presents some challenges for workers in fossil fuel industries. However, the creation of 30 million new jobs worldwide due to these changes by 2030 is expected to alter the labor market for decades. The risk of unemployment decreases through effective upskilling and reskilling of current energy employees. We are left with ever-expanding opportunities provided as the renewable energy industry grows and the need for new workers to enter the sector arises. 

Published: March 17, 2023

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