The human capital implications of net zero on the energy sector

The human capital implications of net zero on the energy sector

Rob Murphy, Energy & Utility Skills

This paper presents the findings of research carried out by the National Skills Academy for Power (NSAP) into the current and future human capital requirements of the UK’s energy sector. It considers the impact of a wide range of factors on the sector’s demand for people and skills and goes on to set out how the sector will work together to achieve the level of workforce resilience now required by Ofgem.

In December 2019, NSAP collected workforce data on more than 23,000 employees from 17 energy companies, including from all of the UK’s transmission (TOs) and distribution (DNOs) network operators, five energy contractors, and seven smart metering companies. A strategic workforce planning model was then constructed with input from each company in order to quantify the supply and demand for people over the coming decade.

This statistical analysis was augmented by a more qualitative assessment of the challenges facing the sector in terms of its ability to attract and retain talent in the face of stiff competition from within the wider engineering/ infrastructure sector (which has been largely unaffected by the COVID-19 pandemic) and a skills supply pipeline that is already failing to meet current levels of demand (exacerbated by new post-Brexit immigration policies).

The study finds that there are a number of areas that need urgent and sustained attention if the UK is to achieve a sustainable and resilient net zero workforce. This has to be an essential element of the whole net zero debate, as without proper consideration of how the sector will meet its human capital challenges, the risks to delivery could be profound.

Working with all members of NSAP and the wider energy sector, we have developed a set of priority actions that will seek to address existing and potential skills challenges, including:

• Managing the transition from an aging technical and engineering workforce, including making the most of talent from under-represented sections of the population
• Developing resourcing strategies that are sustainable and deliver the talent needed in an efficient and cost-effective way, particularly down through the supply chain
• Developing new pathways that can make the most of the talent already in the sector when it comes to deploying new technologies (e.g. from smart metering to EV charging point installation)

Ultimately, the UK cannot have a resilient and sustainable energy sector without a skilled workforce. In the absence of any Government co-ordination in this area, it is itself developing a coherent strategy that will ensure access to the volume and quality of people needed to deliver the desired energy transition and maintain robust levels of consumer trust.

References: Future Energy Scenarios, National Grid ESO, July 2019; Building the net zero energy workforce, National Grid, January 2020; Open Networks, Workstream 3: Product 2: Functional and System Requirements, Energy Networks Association, 15th May 2018; UK Employer Skills Survey, UKCES, 2017; Engineering UK 2017: The state of engineering, EngineeringUK, 2017.