In 2023, clean energy solidified its place as a driver of job growth in the energy sector, adding 1.5 million jobs compared to 940,000 in fossil fuels, according to the International Energy Agency (IEA).
The third annual energy employment report counts 2.5 million new energy jobs in 2023, a growth rate of 3.8% that outpaces the economy-wide average of 2.2%. “The largest increase was for jobs in the clean energy sector, which rose by 1.5 million,” writes the IEA in a release.
By 2022, clean energy was already employing the majority of energy workers. In 2023, the IEA finds manufacturing overtook construction and installation as the leading source of new energy jobs.
“This largely reflects the 70% rise in clean energy manufacturing investment in 2023 to US$200 billion as firms responded to increasing demand for clean energy technologies and new policies,” writes the IEA.
Solar photovoltaics had “yet another banner year” with 500,000 new jobs, while electric vehicle manufacturing and batteries added 410,000. Other clean power generation technologies like wind, and jobs in energy storage, heat pumps, and the expansion and digitalization of power grids, made up the rest.
But this job growth is uneven across the globe. In China, clean energy job growth represents over 10% of economy-wide job growth, and in advanced economies like the United States, the European Union, and Japan, the rate is 4-6%. But in many emerging economies, barriers like poor infrastructure and limited skills mean clean energy’s share of job creation is under 2%.
“Just one-quarter of clean energy job growth since 2019 has occurred in emerging and developing economies other than China, despite these regions representing 60% of the global labour force,” writes the IEA.
Canada Must ‘Get on Board’
“This is the time for Canada to get on board with the accelerating adoption of clean energy technologies occurring in other parts of the world,” writes Pembina Institute senior analyst Megan Gordon, citing the latest IEA report. The accelerating pace of electrification makes the clean power sector the largest area of employment growth, representing 40% of energy job growth.
But labour and skills shortages persist unevenly across the industry, threatening to slow the ramp-up of clean energy technologies, says the IEA. The shortage is acute in specialized fields like grids and nuclear power, but persistent across nearly all job categories, found the survey of over 190 energy employers in 27 countries. Tradespeople remain in high demand in the U.S., Canada, and other advanced economies, writes the IEA.
A full 75% of respondents said they were still struggling to hire into construction jobs.
“A renewed focus on vocational training” is a key strategy being employed by governments to redress these gaps.
Clean Energy Wages Rise, Gap Remains
Wages in clean energy have risen faster than in fossil fuels due to labour shortages and skill gaps, but oil and gas workers still earn about 15% more on average. The oil and gas sector added more than 600,000 jobs in 2023 “after a period of cautious post-pandemic rehiring.”
Another 440,000 jobs were created in the combustion engine vehicle sector. Global coal employment fell for the third year in a row, largely due to automation. Policy attention is needed to ensure a just and orderly transition for coal workers, fewer than 15% of whom were covered by just transition policies in 2023. Skilling programs could help coal workers find work in “nearby clean energy sectors such as geothermal, modern bioenergy, critical minerals and hydrogen,” the IEA says.
The IEA also highlights challenges with job quality in the energy sector, such as low pay and poor working conditions, and stresses the need for gender equity.
From early data, IEA predicts energy jobs will grow by about 3% in 2024 amid tight labour markets, high interest rates, and an uncertain energy outlook.
