Government Initiatives Shaping the Renewable Energy Job Market

Leaders worldwide have made substantial commitments to combat climate change amidst rising temperatures, sea levels, and public concern. Recognising the urgency, governments globally have launched ambitious climate initiatives aimed at promoting clean energy and creating renewable energy jobs. These efforts include investing in new technologies, providing incentives for sustainable practices, and implementing policies to reduce carbon emissions.

This guide examines three pivotal government initiatives for climate change shaping the renewable energy sector. It dives into their objectives, strategies for achieving them, and the impact on renewable energy job creation. Let's begin by exploring the initiative that has received high-levels of global attention: the USA's Inflation Reduction Act (IRA).

Inflation Reduction Act (IRA)

The 16th August 2022 saw a landmark moment for American economics and environmental commitments. It was the day President Joe Biden signed the Inflation Reduction Act, which ushered in a new era of advancing renewable energy, championing sustainability, and driving a carbon-free economy. This wasn't just a major milestone for the battle against climate change; it was a chance to drive significant economic growth and present a major opportunity in the talent market. 

Key examples of what the IRA has promised so far: 

• Estimates predict it will cut economy-wide emissions by approximately 43% and 48% by 2030. 
• $370 billion in tax credits for the sector to support the creation of over 9 million renewable energy jobs over the next 10 years. 
• $20 billion to cut emissions in the agriculture industry. 
• $10 billion in investments in renewable technology and electric vehicle manufacturing facilities. 
• $27 billion to create the first-ever national ‘green bank’ to support renewable energy projects.

However, the act represents much more than a commitment to fighting climate change and reducing emissions; it is a major step towards energy independence and reducing reliance on fossil fuels such as oil and gas. With tax relief, high levels of investment, and grants directed into green industries, the Inflation Reduction Act is set to drive the demand for green skills. 

How will the IRA Impact Renewable Energy Recruitment? 

If all 210 renewable energy projects announced as part of the passing of the IRA are completed, they are projected to create or support 303,500 jobs during the construction phase and 99,600 after they are completed. 

However, though demand for talent for renewable energy jobs has increased significantly since the IRA, employers face a labour shortage that may put projects at risk. For example, the Interstate Renewable Energy Council's 2022 National Solar Jobs Census reported that 44% of businesses in the solar industry reported that it was very difficult to find qualified applicants. 

So what is being done to ensure the talent is in place so the IRA can achieve its clean energy goals? The act includes several provisions to support the training and attraction of workers to renewable energy jobs. These include: 

• Tax Credits for Apprenticeship Programmes - The act provides tax credits to businesses who create and maintain apprenticeship programmes in the clean energy sector. These programmes help provide workers with the hands-on training they need to succeed. The credits also include a prevailing wage requirement, meaning that programmes not only help increase the workforce but also make it more equitable and diverse. 
• Investment in Vocational Training and Community Colleges - The IRA is providing funding for colleges and vocational training to drive the development and delivery of clean energy training programmes. This will ensure that workers have the skills to secure renewable energy jobs in this growing sector. 
• State-Based Home Energy Efficiency Contractor Training Grants (CTG) Programme - The programme empowers states to develop training initiatives that tackle two significant challenges - reducing the cost of training for contractors and their employees and ensuring a qualified and diverse workforce ready to deliver clean energy improvements to drive continued future advancements. 
• Support for Disadvantaged or Underserved Communities - The Inflation Reduction Act also includes provisions to ensure that workforce development programmes are available to disadvantaged or underserved communities, including minorities, women, veterans, or those from lower socio-economic backgrounds. 

Great British Energy 

The UK general election of 5th July 2024 saw the Labour Party return to government after 14 years in opposition. The party's win gave them the mandate to implement their manifesto, which includes the promise to set up Great British Energy, an independently run and publicly owned energy company whose mission is to deliver cleaner power and cheaper energy. 

Great British Energy is one of the key election promises that have caught the public's and the media's attention and is at the heart of Labour's Green Prosperity Plan. It promises to reduce dependency on foreign like Russia, create hundreds of thousands of jobs, and permanently lower household energy bills. 

Unlike France's EDF, which manages all the nation's power plants, Great British Energy will not renationalise the energy sector. Instead, it will initially enter the market as a smaller player with an initial capitalisation of £8.3 billion over the next five years. This funding will be used to establish the company and provide investments in renewable energy projects. 

The potential benefits of Great British Energy include:

• Reduce Britain's reliance on imported fossil fuels from countries such as Qatar, the US, Norway, and Russia to increase energy security.
• Creation of new jobs throughout the UK through local energy generation. 
• Lower household energy bills by an average of £300 annually. 
• Supports the commitment to delivering 100% clean energy in the UK by 2030. 
• Upgrade the energy efficiency of 5 million homes through the Warm Homes Plan.

What do Labour Say about GB Energy’s Impact on the Jobs Market? 

Labour have stated that one of the significant benefits of Great British Energy is that it will create well-paid jobs across the country. Here is what they have promised: 

• As the UK develops into a clean energy superpower, Labour has promised that it will create 650,000 high-quality jobs, working alongside trade unions and businesses, as the transition is managed. 
• Furthermore, Labour will reward clean energy developers with a British Jobs Bonus, allocating up to £500 million per year from 2026, to incentivise firms that provide good jobs, favourable terms and conditions, and build their manufacturing supply chains in the UK's industrial heartlands, coastal areas, and energy communities.
• Scotland will benefit from 53,000 renewable energy jobs in industries such as solar, hydrogen, wind, and carbon capture. 

Great British Energy has the potential to transform energy security, lower bills, and tackle the fight against climate change. With the Labour government now in power, there is pressure to make this pledge a long-term success.

EU’s Pledge to be Climate-neutral by 2050 

The EU's commitment to achieve climate neutrality by 2050 marks a pivotal initiative agreed upon by EU leaders in December 2019. This ambitious goal aims for a balance where natural absorbers like forests and oceans offset greenhouse gas emissions. To achieve these net-zero emissions targets, EU countries are set to drastically reduce emissions and innovate to manage unavoidable emissions effectively. 

The transition to climate neutrality catalyses economic growth, new markets, and job creation, driving technological advancements across various sectors. Acknowledge the economic implications, EU leaders have emphasised the importance of ensuring a cost-effective and socially equitable green transition. 

In December 2020, EU leaders further reinforced their commitment by pledging to cut greenhouse gasses by at least 55% by 2030, a significant increase from previous targets. This milestone underscores the EU's proactive stance in leading global efforts against climate change. 

What is the EU doing to Attract Talent for Renewable Energy Jobs?

The European Union faces a critical challenge in meeting its climate neutrality goals by 2050, requiring a substantial increase in renewable energy jobs. In 2020, approximately 1.3 million people were employed in the EU's renewable energy sector, with projections indicating a need to more than double this to over 3.5 million jobs by 2030 across various renewable solar, including solar power, biomethane, and heat pumps, and significant manufacturing roles. 

The EU is actively tackling skills gaps in the renewable energy industry through significant financial commitments and strategic initiatives, including earmarking €65 billion for skills programmes to enhance workforce capabilities.

Establishing a Skills Academy by the European Battery Alliance in 2022 illustrates coordinated efforts to reskill and upskill workers to meet the demand for 800,000 skilled professionals in the renewable energy sector. These initiatives, underpinned by the Net-Zero Industry Act, are crucial in preparing diverse sectors to transition to clean energy.

Another critical challenge in achieving carbon neutrality is addressing gender disparities in the energy sector, where women currently represent only 26.6% of the workforce. Targeted investments in workforce skills and initiatives like school campaigns aim to attract more women to renewable energy jobs, starting with increased participation in STEM subjects.

As Europe harnesses the potential of renewable energy to create jobs, sustained investments in people and proactive labour market policies are essential to ensure a skilled workforce capable of driving Europe's clean energy future.

Initiatives Shaping the Renewable Energy Job Market: Final Word

The government initiatives outlined in our guide reflect a global commitment to combating climate change through strategic government actions. From the USA's Inflation Reduction Act (IRA) to the EU's ambitious climate neutrality goals by 2050, these efforts aim to drive clean energy adoption, foster sustainable economic growth, and increase renewable energy job opportunities. 

As these initiatives unfold, their success will depend on effective implementation and ongoing support for clean energy technologies. Ensuring a skilled workforce through robust training programs and addressing gender disparities in the energy sector will be crucial. By driving innovation and collaboration, governments can pave the way for a greener and more resilient future where sustainable development and economic prosperity go hand in hand.

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