This article first appeared in Wind PES, issue 13, April 2010

Expansion of the global renewable energy market is set to continue increasing despite the current economic situation, forming a fundamental part of how many countries will meet their post-Kyoto targets. The ability to up-skill and transfer knowledge at a European level is going to be critical to meet this expected demand and to successfully compete on a global basis, says Sunil Shah and Andrew McDade.

Whilst the global market is maturing, there is a need to better understand the competencies of those involved in the profession providing a level of credibility and assurance to investors and stakeholders.

Growth of the Renewable Technology Sector
Over the past decade there has been an increasing focus on carbon reduction in light of increasing evidence on the impacts of climate change. This has led to the 1997 Kyoto agreement and the current discussions on a subsequent global agreement post Kyoto, despite Copenhagen. The European Union has signalled its intentions with the EU renewable energy target of 20% by 2020 and the UK with a legally binding carbon budget reduction of at least 34% by 2020 .

Importantly, any global agreement will involve China, India and Brazil as the largest growing emitters of green house gasses. In tandem, this will also require a significant level of “up-skilling” to enable the technology and cultural leap necessary. This growth is being promoted through the capitalisation of the carbon market, both in terms of the emissions trading schemes evidenced globally and also the sustainable energy jobs market which is worth in the order of $155bn in 2008 . Additionally, the US markets are becoming interested in this area to benefit from this growth.

The UK is lagging behind on renewable energy investment, with fewer investors willing to take a risk on the market. Only 13 per cent of energy companies around the world, and 23 per cent of those in the UK, said they would invest in the UK in the next 12 months, according to a global survey of 200 senior energy executives carried out by KPMG. More popular destinations for renewable energy investment were the US, where 42 per cent of respondents said they planned to invest, and India, which was targeted by nearly a quarter . This appears to be synonymous of the industry as a whole.

Offshore Wind Development
The UK has embarked on the third and largest round of offshore wind development through nine consortiums which is proposed to ultimately generate a quarter of the UK’s electricity needs and create an additional 70,000 jobs over the next 10 years. Spain, Germany and Denmark are key beneficiaries; involved in a number of consortiums developing these regions. Germany has also recently announced a trial site with ambitions to develop this significantly to 25GW.

However, unless the UK government acts now to develop a domestic skills base to support this growing industry the country is unlikely to benefit directly from any increased employment opportunities.

The current largest offshore wind development – the London Array – is built predominantly in Germany and Denmark, with the UK providing underwater cabling.

The UK cannot currently claim any real expertise in the development, construction and ongoing maintenance of off-shore wind farms.  Germany and Denmark currently lead and dominate this market, with the USA and China rapidly developing credible expertise.  If the government does nothing, most, if not all, of the jobs generated by this massive wind generation development will be lost overseas and the UK will have lost perhaps its best chance of developing a skill base that will have a global demand.

The UK’s commitment to offshore wind represents a unique opportunity to develop a strong UK manufacturing base to build and supply turbines. The practicalities and resultant cost of transportation to site present the UK as the ideal location for turbine manufacturing. The potential of the North Sea along also presents a longer term need for this. The key issue is can the UK deliver on this now, build on it for the long term and compete with lower labour cost economies.

It may not be possible or indeed desirable for the UK to develop the manufacturing expertise needed to physically build the required turbines, but there are significant opportunities to develop a credible skill base in marine engineering needed to site and house the turbines, in ongoing maintenance, on-shore facilities and emergency services.

At a European level, the same argument applies in the development of these skill sets to enable the EU to effectively compete with the financial presence of the US and the low cost and large engineering force being developed in South East Asia, particularly China.

The appropriate skill sets can be developed in a relatively short period of time.  If the government were to take this challenge seriously it would be possible to develop a solid skill base within three to four years.  Within a decade the EU would be able to claim with some credibility to have a market-leading industry.

This is demonstrated by what Spain has been able to do very quickly and exactly what the USA and China are now working hard to achieve.  If the EU were to leave it for another five years or so it would be too late – we would always be playing catch-up.

Challenges in Standardisation
There are a series of additional issues and conditions that place the current skills requirements for the renewable technologies into context. Acclaro Consulting hosted a roundtable discussion at Bilbao EFEF 09 to discuss these areas with industry experts from across Europe. The key findings were:

• Renewable technology is a new area and developing rapidly – there is an argument that it is too early for standardisation for most aspects except those areas that are mainstreamed. These include health and safety, engineering and environmental regulations;

• Proprietary issues may cause a barrier to the take-up and standardisation as organisations may be unwilling to share knowledge gained;

• Standardisation from the vertical sector rather than across technologies may be more achievable as there is a direct inter-relation with stakeholders;

• How to attract staff, and in particular increasing the quantity and quality of skilled technicians available to take jobs in renewable energy. Partly this is though the transferability of skill sets from other sectors as well as education through schools and universities.

• Standardised skill sets while promoting the global marketplace, may also have a negative effect on the use of local labour where developers may choose to import skills. We would therefore promote the “up-skilling” of local labour under the standardised skills model whereby subject matter experts are recruited in to the territory where necessary, with the view of educating and leading local labour. This would result in the enhanced project security and risk reduction required by developers/operators while simultaneously raising the skills level and expertise of the local labour force.

• The prominence of cross cultural and multilingual talent in the global renewable energy sector is reducing the status of technical expertise. This will only increase with standardisation. The up-skilling process is more viable for this talent where as the up-skilling of non- cross cultural technical human capital is likely to lead to a negative pay differentials from other industry sectors. Government intervention in collaboration with NGOs, Corporate entities and NPOs can solve this together.

At Acclāro, we work globally and the importance of the international market translates to the renewables industry as a whole. The key factor for Europe over the coming years will be two-fold: firstly, how to attract the best talent and thought leadership from other regions; and secondly, how to build on this key talent by up-skilling the labour force. Europe faces increased competition for this top talent moving forward. Acclāro has just opened up an office in Mumbai and we are predicting huge growth from the 2nd half of this year. Increased competition from India, Brazil and China over the coming years will only make it more difficult for Europe to attract and retain talent.

By Sunil Shah, DPP, and Andrew McDade, Acclāro Consulting

Sunil Shah is head of sustainability at DPP, a firm of planning and sustainability consultants. 

Andrew McDade is the managing director of Acclāro Consulting, a consultancy formed to realise opportunities related to the key skills and knowledge shortage within the burgeoning Renewable Energy. Andrew can be reached by email: andrew.mcdade@acclaro-consulting.com.