The Case for Modularisation

15 December 2022

Australia is facing a significant shortage of skilled workers to fill up to 12,000 positions in the renewable energy industry over the next two years. Almost three times that number is required to become a hydrogen “superpower”. This is according to a report from the Institute for Sustainable Futures at the University of Technology Sydney (UTS). The analysis highlights the challenges of meeting the “step change” and “hydrogen superpower” scenarios set out in the Australian Energy Market Operator’s Integrated System Plan, which has already been adopted by the federal Labor government as a target. The labour force requirements do not include extra jobs in mining critical battery metals, construction, and other emerging or expected jobs in energy management. The report calls for the expansion of skills, planning, and training programs, to prevent a boom-bust cycle in the renewable energy industry.

Hydrogen Goals a Step Too Far
A report by the Institute for Sustainable Futures at UTS has highlighted the need for up to 12,000 workers in Australia’s renewable energy industry by 2025 to meet the “step change” scenario of 82% renewables by 2030, adopted by the federal Labor government. The hydrogen superpower scenario, which is consistent with capping global warming at 1.5°C, requires almost three times that number of workers by 2025, with a peak of 237,000 in the 2040s. The offshore wind scenario would see job numbers rise by 29,000, and peak at 73,000 in 2049, with fewer jobs required in onshore wind and utility solar.

Avoiding Renewable Projects Leading to a Boom-Bust Cycle

Renewable energy has been criticised for creating jobs similar to mining, with construction workers flying in and out of regions, and few jobs remaining after a project is done. However, under all of Rutovitz’s scenarios, construction jobs will dominate the market through the 2020s as the build-out of renewable energy, transmission, and storage accelerates. By the 2040s, over half of the workforce is expected to be in regular operations and maintenance roles. The boom-bust nature of renewable energy jobs can be easily solved by phasing the development cycles, as seen in NSW’s approach to renewable energy zone developments. Rutovitz expects to see more conditions around local content, training, and the employment of First Nations people as part of government renewable energy contracts. However, skills shortages may delay the optimal development path, and increase project costs due to wage inflation, recruitment costs, liquidated damages, and increased cost of capital to reflect increased risk.