A global skills shortage threatens UK offshore wind

K2 Management’s Gary Bills explains how this often-overlooked challenge is threatening the industry and what the UK needs to do to solve the problem.

The offshore wind industry is undergoing immense growth in the UK and around the world. According to a report by Research and Markets, the global market is expected to grow by 12.3 percent between 2021 and 2026, with revenue predicted to increase from $31.8 billion to $56.8 billion.

As Ireland, Germany, France, Spain, South Korea, Japan and Australia, to name but a few, set their sights on enormous offshore projects, we can anticipate a sharp uptick in the number and size of schemes. This is great news for the energy transition, but with such impressive growth comes immense challenges – ensuring that wind farm development is sustainable, that projects can get funding and consent, and that they are profitable in a post-subsidy world.

Fast growth predicted

But perhaps the most immediate and often overlooked challenge for the industry, particularly in the UK, is the skills shortage, which has been compounded by the rush to build offshore wind projects. The International Renewable Energy Agency estimates that the total number of jobs in the energy sector may rise from 58 million in 2017 to
100 million across the globe in 2050 – a 73 percent increase. The US offshore wind sector alone needs more than 44,000 additional workers to meet its targets.

There are no straightforward, quick-fix solutions in the UK for this skills crunch. In taking steps towards potential solutions, removing the considerable obstacles will take time. The assumption that there is a silver bullet for this problem is so far unfounded.

Projects, people and investment are required to meet the UK’s ambitious target of generating all electricity from renewable sources by 2035. But if the UK does not work to address this challenge now, investors will soon take capital to projects abroad that possess sufficient manpower.

An often-cited potential solution is to retrain oil and gas workers around the world as the switch from fossil fuels to renewable energy continues apace.

As a long-term possibility, this has promise. With 30,600 people directly employed in the offshore oil and gas industry across the UK as of 2019, there is clearly a pool of potential workers that could help the offshore wind industry move forward, especially as many of these individuals may already have the necessary expertise for working on complex projects in unforgiving environments.

Furthermore, Scottish newspaper The Herald has reported that Scotland’s government is considering regulations that will allow oil and gas workers to sidestep time-heavy, expensive training courses before moving into offshore wind. This has huge potential for smoothly transitioning employees from one industry to the other.

No ready workforce

However, this solution is founded on the misconception that the oil and gas industry will vanish in the not-so-distant future, leaving a large pool of talent looking for work. This will not be the case. Requirement for fossil fuels is not ceasing – demand for oil hit a record high in the past year as countries began to relax coronavirus restrictions – so workers are unlikely to transition into renewable energy roles at the required rate. As a long-term ambition, reskilling the oil and gas workforce carries economic benefits, but it cannot be viewed as the immediate fix.

It is possible that UK vacancies could be filled with foreign nationals. Currently, a concession waives the post-Brexit obligation for European nationals to have work visas when taking on roles in the offshore wind industry. However, this waiver is time-limited and is only likely to provide a short-term solution. From 1 July 2022 onwards, it will no longer exist for offshore wind. The UK will lose out on the entire pool of workers from the EU, as the country’s Home Office has confirmed that the concession will not be extended beyond this date. This resulting gap will need to be filled by other policies to facilitate UK access to foreign expertise.

We are also seeing an increasing ‘brain drain’ in the country. Skilled UK nationals, from project managers to top engineers, are being lured to Asia and the US, where demand is increasing as project pipelines grow. That means the UK industry is being left with even more vacancies it cannot fill.

The UK market is particularly susceptible to the global skills shortage because it still lacks local manufacturers and other aspects of the supply chain. This in turn will mean that, if the industry is to reach its potential in the UK, it will need to build out a much broader local supply chain network, such as parts manufacturers. This will inevitably require more workers.

Supply chain problems

UK projects are currently unable to source local monopiles, towers and even turbines, although the expansion of the Siemens facilities in Hull are welcome. Government intervention needs to commit companies to local production – and therefore needs to create the conditions that enable the different parts of the offshore wind supply chain to set up.

The industry must attract school leavers and graduates. All stakeholders should look at how they can contribute to this, in companies large and small. More training, in the form of graduate schemes and other employment drives, and creating greater awareness of offshore wind in universities and schools are just two of the other solutions

Combining these steps with a foreign workers scheme and a transition away from oil and gas towards wind would form a strong basis for a
long-term future skills plan.

Solutions to the global skills shortage are at hand. But the UK’s need to generate local production means the global skills shortage will hit the country as hard as – if not harder than – any other market, as it works towards delivering on its offshore wind target.

The first challenge – accepting there is a problem – has been overcome. Now the skills crisis must be tackled. This requires business and government to deploy a combination of tools – at national and regional level – to tackle the problem head-on. We need to begin now.