Research reveals urgent capital investment is essential to position region as a long-term global leader in offshore energy. A new review on the future shape of the energy workforce in the North-East of Scotland by Robert Gordon University (RGU) reveals if the region attracts £17 billion of renewables investment and activities over the next eight years it will be established as a global energy hub, securing thousands of new jobs.
This level of investment could secure 54,000 direct and indirect jobs in 2030, up from 45,000 today. However, the forecast scenarios also show reduced ambition could see up to 17,000 local jobs at risk, falling by up to 40% to 28,000 in eight years.
The RGU ‘Making the Switch’ review indicates that much of the £17 billion towards regional renewables activities needs to be front-loaded as capex funding within the next four years to establish new large-scale manufacturing and installation capacity. The required investment is in addition to ongoing oil and gas expenditure in the region and will need close coordination between governments and industry.
The ‘Making the Switch’ report builds on RGU’s UK offshore energy workforce transferability review in 2021, which focused on UK wide forecasts. It shows different investment scenarios and the implications for the workforce. With the North-East of Scotland hosting the largest energy skills cluster in the UK, representing around 28% of the UK’s offshore energy workforce and home to unique specialist knowledge and experience, the region has a critical role to play to deliver and accelerate the energy transition.
Professor Paul de Leeuw, Director of the Energy Transition Institute at Robert Gordon University, and the review’s lead author, commented:
“This review is an urgent call to action and highlights the size of the prize to create an exciting new energy future that will sustain and potentially grow the industry in the North-East of Scotland. Building on a legacy of over 50 years in oil and gas, there is a unique opportunity to re-shape a new energy future here. This will require rapid, targeted investment in the North-East of Scotland to develop the project, manufacturing, installation, commissioning and operational infrastructure for the renewables sector. Sustaining the oil and gas sector’s skills and capabilities over the coming years will be critical in ensuring the region has the workforce ready to deliver on this ambition.
“The energy transition will create exciting new opportunities and industry, governments and the education sector all have a key role to play. It will require a careful balancing act. The opportunity of getting this right has the potential to secure the region's economy as a global energy hub for decades to come. However, if we move too slowly, there won’t be a role for everyone, and it will risk a hard-hitting economic decline for the North-East of Scotland. This must be avoided at all costs.”
Key findings from the review:
- The shape and focus of the regional offshore energy workforce will need to change between 2022 and 2030 – In 2021, 90% of roles in the regional offshore energy workforce were in oil and gas, with the remaining 10% supporting regional offshore wind, hydrogen and carbon transportation and storage activities. In the global energy hub scenario, by 2030 around three out of five of the offshore energy jobs in the region are forecast to support the renewables sector.
- Sustaining oil and gas jobs over the coming years will be key to ensuring access to people and skills for renewables energy activities from 2026 onwards – Recognising the lead time for consenting and approving new renewables activities and the time required to establish new manufacturing facilities, it is forecast that most of the new jobs in the region will be created post 2026. With close to one in three people in the region either working in or supporting the wider offshore energy industry (direct, indirect and induced jobs), sustaining the regional oil and gas workforce over the coming years will be critical to ensuring a managed, just and fair transition.
- Sustaining and developing the sector’s skills and capabilities will be critical in ensuring the region has the workforce to deliver the energy transition – Realising the ambition for the North-East of Scotland to become a global energy hub may require close to 14,000 people in the region to move from oil and gas to renewables roles between 2022 and 2030. With more than 90% of the North-East of Scotland’s existing oil and gas workforce having medium to high skills transferability, most people in the region are well positioned to make this switch.
- Energy transition training and skills development will need to be targeted to meet the different needs of the workforce – Over 80% of people (close to 37,500 in total) who are currently working in the sector are projected to still be employed in the industry in 2030. Cost effective and readily accessible training will be required for people moving between energy sectors or for those who are entering the sector from other roles, as well as common certification, standards and accreditation.
‘Making the Switch’ states it is vital for the North-East of Scotland to retain its oil and gas workforce to provide ready-made skills to transition at the right time and support the required rapid green economy scale up.
The review assumes a ‘goldilocks zone’, where workforce reductions in one sector are matched by increased activities in an adjacent sector. Although the research indicates that there will be medium to high levels of transferability across many of the jobs, around 10% (c. 4,500 people) are likely to have lower transferability and will be disproportionately impacted by the changes.
The analysis by the Energy Transition Institute at RGU has been funded by the Scottish Government through the North-East Economic Recovery and Skills Fund (NEERSF). The findings and the regional assumptions are also aligned to the targets and ambitions set in the ScotWind licensing round and the UK Energy Security Strategy published in April 2022, with targets of 50 GW of installed offshore wind capacity, 10 GW of hydrogen generation and up to 30 million tonnes of annual carbon capture and storage for the UK by 2030.
As part of the review, RGU developed a dynamic planning model that provides insight on future workforce requirements, workforce movement between adjacent energy sectors and how to ensure a managed, just and fair transition. The model can also provide real-time insights on the job and transferability impact of specific investment or policy decisions. There are plans to update this model on a regular basis.
The Scottish Government’s Net Zero & Energy Secretary, Michael Matheson MSP said:
“Scotland’s energy sector is at the forefront of our transformation to becoming a net zero nation. It is a major employer and source of economic output, and our oil and gas infrastructure and highly skilled workforce have long been at the forefront of energy innovation - which is why it is well-placed to embrace the transformation that lies ahead.
“This review demonstrates that, with the right investment, the North-East of Scotland could support 9,000 more offshore energy jobs by 2030 than it currently does, becoming a net zero global energy hub that supports existing oil and gas roles into the renewables and low carbon roles of the future. We also stand ready with £80 million of investment in for the Scottish carbon capture and storage Cluster. The report only serves to demonstrate how important carbon capture and storage will be to future-proofing jobs in the North-East – which is why it is vital the UK Government reverses its decision not to award the Scottish Cluster definitive Track-1 status in its cluster sequencing programme.
“The Scottish Government is committed to creating, supporting and monitoring green jobs through initiatives like our £500 million Just Transition Fund for the North-East and Moray, the Green Jobs Fund and Climate Emergency Skills Action Plan. We will continue to work with the sector to seize the economic and job opportunities offered by the offshore wind sector – helping to help Scotland secure a truly just transition to net zero, with no person or region left behind.”
Maggie McGinlay, CEO of ETZ Ltd said:
“The ‘Making the Switch’ review is a hugely welcome report outlining the pressing need for targeted investment and support to ensure the North-East of Scotland capitalises on the huge opportunities the energy transition provides.
“ETZ Ltd has a clear ambition to reposition this region as a globally recognised, integrated energy hub focussed on the delivery of net zero targets. To do this at pace, as this report states, it is vital we harness the skills, infrastructure and financial capital of our world-class oil and gas industry as an integral part of this process.
“The report is also a timely reminder on what is at stake and the critical role industry, governments, the region and the community have to play to ensure the North-East of Scotland remains a leading energy hub for generations to come.”