Human resource plays a major role in the development and growth of any industry. It is no different for the renewable energy sector where an informed understanding of human resource skills for production, installation and decommissioning helps speed up the development of the sector. With the increasing demand for renewable energy, a plethora of employment opportunities have opened up in various renewable energy segments. According to two recent research papers, “Renewable Energy Benefits: Leveraging Local Capacity for Onshore Wind” and “Renewable Energy Benefits: Leveraging Local Capacity for Solar PV”, published by the International Renewable Energy Agency, the energy efficiency levels and deployment of renewable energy, as agreed to in the Paris Agreement, would increase the global gross domestic product by 0.8 per cent by 2050. Further, it will create around 26 million jobs in the global renewable energy space by 2050. Renewable Watch presents a brief summary of the two papers…
The wind energy sector employed approximately 1.2 million people in 2016, with China, the US, Germany, India and Brazil leading the pack. More than half of these jobs were created in Asia, where the share of global wind energy employment has increased from 54 per cent in 2014 to 56 per cent in 2016. Over this period, employment in the sector has risen by 35 per cent in North America, 9 per cent in Latin America and 3 per cent in the European Union (EU).
In the solar segment, global employment increased by 12 per cent with 3.1 million people working in the sector in 2016. China has been leading the growth in the solar segment, both in manufacturing and installation, followed by significant installations in the US and India. Overall, jobs have shown an increasing trend in Asia due to rising project deployment and manufacturing. The Asian countries have seen a 70 per cent increase in solar project deployment due to supportive government policies and declining costs, leading to job creation in countries like India and China. In addition, distributed solar installations have contributed to value creation in countries such as Bangladesh, India and Kenya for assembling, distribution and after-sales service. However, jobs in the solar photovoltaic (PV) segment have declined in Japan and in the EU due to contracting markets. Thus, the growth and sustenance of opportunities in both the solar and wind segments are only possible if there is an increase in project deployment, informed assessment of specific skills required across the renewable value chain and identification of the areas that hold the greatest potential for local value creation.
The wind as well as solar industries can be divided into seven core segments: project planning, procurement, manufacturing, transport, installation and grid connection, operations and maintenance (O&M), and decommissioning. In the wind power space, project planning involves 2 per cent of the workforce, while in the solar segment, project planning requires 1 per cent of the workforce, followed by 17 per cent and 22 per cent for manufacturing; 1 per cent and 2 per cent for transport; 30 per cent and 17 per cent for installation and grid connection; 43 per cent and 56 per cent for O&M; and 7 per cent and 2 per cent for decommissioning in the wind and solar segments respectively.
Planning is the most important step in projects across sectors. It includes activities like site selection, technical and financial feasibility studies, engineering design and project development. While the first two activities measure the resource potential of a site and assess the environmental and social impacts of the project, engineering design covers technical aspects such as civil engineering and infrastructure work, construction plan and the O&M model. It also consists of administrative tasks such as obtaining land rights, permits, licences and approvals from different authorities; managing regulatory issues; negotiating and securing financing and insurance contracts; contracting engineering companies; negotiating the rent or purchase of land; and managing procurement processes across the value chain.
In addition, a huge part of planning also involves human labour. Manpower is required in the form of energy regulators, real estate developers, and taxation experts. A considerable portion of the workforce comes from the nearby locality while foreign experts can be hired for imparting specialised engineering, environmental and geotechnical or topographical knowledge for setting up a wind or solar plant. According to the report, while local people constitute almost 40 per cent of the workforce, 16-24 per cent comprise experts hired on a temporary basis from abroad. These experts can be replaced by locals who have formal training and similar skills.
Once the planning is done, the manufacturing capacity has to be matched with the demand. This can be done either by domestically producing the equipment or outsourcing it from other countries. Decisions regarding the local manufacturing of wind components or solar parts are mainly driven by the expected local or regional demand for energy along with government policies incentivising local value creation, the availability of raw materials, the presence of related domestic industries, and the high costs and logistical challenges related to the transport of equipment. Intense competition, low prices and overcapacity discourage the development of a domestic manufacturing industry.
As reported, in the wind manufacturing segment, 66 per cent of the labourers engaged in turbine manufacturing are medium to low skilled. Components that are technologically advanced such as gearboxes, generators and electronics require highly specialised skilled labourers, which may not always be easy to source locally. In the case of the solar industry, 64 per cent of the labourers involved in component manufacturing are medium to low skilled and 12 per cent are industrial engineers. The remaining portion of the workforce is involved in non-technical aspects like marketing and sales, administration, quality control, logistics and regulation.
Apart from manufacturing, transportation forms a big part of the job pool. Transporting equipment requires high capacity trucks and trailers. Thus, the majority of the workforce (70 per cent) is dominated by truck drivers and crane operators. The remaining workforce is involved in unloading, or are logistic experts, administrative heads and quality control agents. Most labourers in this segment need to have certified skills and they are mostly hired locally.
The next aspect of the renewable industry is installation and grid connection. This phase lasts for approximately 12-20 months in the wind segment and 6-12 months in the solar segment. Installing and connecting a wind turbine requires 77 per cent of the workforce or technical personnel, guided by engineers (around 7 per cent). Labourers, especially low to medium skilled, are always sourced domestically for the purpose. For solar, around 90 per cent of the workers employed in installation and grid connection jobs are construction workers and technical personnel, mostly hired locally. Civil engineers and forepersons account for about 6 per cent of the total manpower employed during this phase.
After the system has been installed, O&M of the plant is mandatory. O&M can be done by the developer or is sometimes outsourced to a third party. This is the most labour-intensive activity. The O&M tenure for a plant ranges from 5 years to 25 years. Employment opportunities in this segment depend on the state of technology in the country. Modern wind farms and solar installations are automated and controlled by supervisory control and data acquisition systems wherein operations are monitored remotely by operators who reset the systems in case of line or grid outages. In most solar plants in developing nations, the panels are still cleaned manually, thereby creating job opportunities for low-skilled, domestic workers. The last phase of the value chain is decommissioning, involving dismantling the project, recycling or disposing of equipment, and clearing the site. Local labourers are engaged for such activities. Technical and construction workers perform 65 per cent of the decommissioning work in the wind segment, while it is around 73 per cent for the solar segment. The remaining 14-20 per cent constitute truck drivers and crane operators.
Job opportunities are being created in each segment of the renewable value chain with a fair distribution of low-, medium- and high-skilled labourers. This socio-economic benefit has become a key consideration in building the case for the wide deployment of renewable energy. Increasingly, governments across the globe are also viewing the benefit as a means to fuel economic growth as it not only creates employment opportunities, but also enhances overall welfare across nations.