Jobs related to energy efficiency in buildings and industry accounted for about 16.5 per cent of the global energy sector workforce prior to the COVID-19 pandemic, but conservation and demand management (CDM) is projected to create more employment and assume a larger share of overall economic activity in step with a heightened focus on reducing greenhouse gas (GHG) emissions. A new report from the International Energy Agency (IEA) is an inaugural effort to tally jobs linked to clean energy and energy efficiency, track their momentum and gain insight on emerging and long-term labour needs.

“With strategic foresight and commitment to achieving just and people-centred transitions, policy makers and industry decision makers can provide the support workers need to transition out of declining industries and maximize opportunities for additional good quality jobs across different regions,” maintains IEA executive director, Fatih Birol, in the forward to the report.

As of 2019, the IEA estimates the energy sector employed about 65 million people worldwide, representing 2.5 per cent of the global workers. That’s further categorized into three similar sized components:

• 21 million workers involved in obtaining or refining oil, natural gas, coal or bioenergy fuel supply;
• 20 million engaged in power generation, including construction and manufacture of related facilities and equipment, and transmission, distribution and storage activities; and
• 24 million focused on end uses, including design, development and manufacture of electric vehicles and energy-saving building technologies and appliances, and a range of professional services and skilled trades involved in energy management and retrofits.

“Roughly 65 per cent of the energy sector workforce is connected to developing new energy infrastructure, while 35 per cent are involved in operating and maintaining existing energy assets,” the report states. “Over 21 million energy sector employees work in manufacturing and approximately 15 million are in construction, making up 5 to 6 per cent of their respective sectors. An estimated 14 million work in utilities and other professional services,”

Already, more than half of the jobs are aligned with reduced GHG emissions through renewable energy, electric vehicle production and pursuit of energy efficiency, and these activities are deemed to have the highest ongoing job creation potential. In 2021, global spending on energy efficiency, including building retrofits, green construction, appliances, vehicles and industrial equipment neared USD $330 billion, surpassing 2019 levels by 14 per cent.

The IEA estimates governments worldwide have committed an extra USD $165 billion to energy efficiency programs since the COVID-19 pandemic began, including about CAD $6.3 billion for Canada’s commercial, residential and community sectors. More recently, the U.S. Inflation Reduction Act allocates more than USD $8.5 billion to rebate homeowners for energy efficiency improvements and switching fossil fuel appliances for electric options, along with billions more in tax credits for qualifying energy investments in commercial and residential buildings and $200 million in training grants for retrofit workers.

Slipping share of jobs tied to fossil fuel supply

Looking back to the 2019 stats, more than 18 million jobs tied to fossil fuel (coal, oil and gas) supply equate to 27.5 per cent of the total energy workforce, but that ratio varies across global regions. In Europe, for example, more jobs are tied to electric vehicles (2.7 million) than any other sub-category, representing 36 per cent of the estimated 7.5 million energy-related positions on the continent.

North America has the largest contingent of oil and gas workers (1.9 million) among seven regions analyzed, but also boasts 2 million jobs tied to energy management in buildings and industry. The total North American energy workforce is pegged at 7.9 million and is relatively evenly split among energy efficiency, oil and gas, power generation and electric vehicles, each with a share ranging from 25 to 22 per cent. Meanwhile, coal and bioenergy each account for fewer than 1.5 per cent of the energy-related jobs.

China is home to more than 29 per cent of the global energy sector workforce, including about 35 per cent of jobs tied to energy efficiency, 33 per cent of jobs related to electric vehicles and 54 per cent of jobs related to coal. Africa has the lowest quotient of global energy jobs —about 5.8 per cent — with 1.6 million jobs or 42 per cent of its energy workforce in oil and gas.

For 2022, the report cautions that about half of the year-over-year increase in energy spending is attributable to rising costs and doesn’t flow into labour demand. However, it estimates 1.3 million new positions were added to the global energy sector workforce over the course of 2020 and 2021, and projects a further 6 per cent growth in employment this year.

Building retrofits are identified as a particularly labour-intensive endeavour that have also suffered from recent supply chain disruptions. The report notes a growing need for skilled workers, including administrators with the ability to assess others’ credentials.

“The lack of trained personnel can be detrimental to the quality of installations or retrofits and negatively affect the energy saving potential of an intervention. This makes training and vetting vendors a major challenge, and there is a growing focus for many efficiency programs to provide the appropriate skilling and certifications,” it advises.

Training will be a key element of enabling energy sector workforce growth given its higher ratio of technical and professional occupations. Currently, the study finds that 45 per cent of energy workers can be classified as “high-skilled” versus about 25 per cent of positions in the general economy, and it is projected to skew even more to high skills in the future.

Women present an underused pool of potential reinforcements. Current labour statistics, which define the energy sector more narrowly than the IEA’s scope, show women make up 16 per cent of the workforce — far below their 39 per cent representation in total employment.

“Clean energy start-ups show signs of change, with a greater share of women founders and inventors in clean energy, even if still far short of parity. This marks an opportunity for these growing segments to help increase female representation,” the IEA report submits.