By Wayne Mulhall, Managing Director at James Fisher Renewables
The news is awash with positive stories about offshore wind; technical surveys have commenced for Finland’s latest 2.1-GW project, Australia’s state of Victoria has released its Offshore Wind Implementation Statement setting out steps to install 9 GW by 2040, while the Chinese city of Chaozhou plans to start work on installing 43.3 GW before 2025.
All around the world, governments, states and private companies are increasing the pipeline of offshore wind. In fact, 271 GW could be installed or under construction by the end of the decade according to 4COffshore’s latest Market Overview Report. It’s a staggering rate of growth that will necessitate a huge workforce, and it’s widely known that the energy industry will find it increasingly difficult to find sufficiently skilled workers to fill those upcoming vacancies. Worryingly, while the industry hasn’t quite got to grips with filling the headcount gap, there is yet another workforce gap that looms large: the competency gap.
Talent availability is being squeezed from all sides
The market for high-caliber graduates is increasingly competitive. Where once there was little overlap, as the digitalization of the energy industry continues, the technology sector has become increasingly attractive to candidates, particularly those with specialisms in physics and math. There are also fewer apprentices entering the industry. In the UK, only around 40,000 engineering and manufacturing technology apprentices graduated in 2021 – a 20% decrease since 2019. The situation is worsened by the high proportion of skilled workers that reach pensionable age each year. According to a recent census by the Engineering Construction Industry Training Board, which surveyed 68 energy companies with 16,000+ employees in over 500 locations, more than a third (35%) of employees are over 50. Altogether, the availability of skilled workers is becoming a major bottleneck to the energy transition and should be on every risk register if it is not already.
The oil and gas workforce won’t save everything
There has been much discussion about retraining and reskilling the oil and gas workforce to meet some of the demand. However, realistically, the oil and gas industry will still exist for decades and may even see periods of resurgence depending on political will and supply and demand economics. Ex-UK Prime Minister Liz Truss was only in power for 45 days but announced plans to offer nearly 900 locations for oil and gas exploration during her tenure. Further, when fossil fuel prices are high, offshore rates increase comparatively. With higher rates of renumeration, no one can blame the offshore workforce for responding to the siren’s call of oil and gas. Finally, there is also a burgeoning asset life extension and decommissioning industry to consider that will only grow as the energy transition continues. Altogether, hiring and retraining oil and gas workers won’t deliver the kind of numbers the offshore wind industry will need to meet demand.
Proactive measures may not be enough
More broadly, countries continue to play the skilled workforce numbers game. The European Union is reforming migration policies and has launched a talent partnership program to boost international mobility and match labor market needs and skills. South Korea, meanwhile, has signed several MOUs with international offshore wind partners such as Vestas, Principle Power, RWE and Equinor to collaborate and gain their expertise. And under the Inflation Reduction Act, the United States will provide tax credits to firms offering manufacturing apprenticeships.
Many businesses are also taking a proactive approach, relicensing training materials, working closely with their local communities to increase interest in apprenticeships with school leavers, forming working relationships with universities for high-quality graduates, pooling from skilled workers such as the veteran community and employing flexible working practices to attract women into the workplace (who currently only represent 12% of the workforce). Companies are also doubling down on retention packages as well as ensuring staff members feel valued and have a clear path to grow within the business.
Yet, despite best efforts by governments, states and companies to create a new workforce for the energy industry, a gap will remain — the gap of competence.
The gap of competence
Competence comes from on-the-job experience and the skills and knowledge gained as result. It is not something that can be gained through training alone. Training helps people talk the talk, but they then need to walk the walk.
One of industries’ core pillars – safe operations – requires an exceptional level of competence to ensure operational risk is recognized and the right measures to control and manage those risks are put in place. In high-risk industries, getting it wrong can be catastrophic; something the oil and gas industry knows all too well, although it is now one of safest industries to work in. Offshore wind has been able to implement many of these lessons from the outset, to uphold a high safety record.
Competence is also vital for ensuring quality workmanship. The world is poised to undertake one of the largest infrastructure buildouts of all time; assets will have a life expectancy that exceeds 25 years. The quality of the build and the subsequent operation and maintenance will significantly influence the return on investment, as well as the ability of the asset to meet or exceed its original designed output. In other words, the energy transition partly hangs on the competence of the workforce to execute designs as intended.
Further, the competences required will change rapidly as new innovations make it to market. You only have to consider the rate of change in turbine capacity over the last 20 years. The world’s first offshore wind turbines were pocket-sized at 450 kW. Today, the industry is moving 15-MW prototypes into demonstration – an over 3,000% increase in generation capacity. Meanwhile, graduates starting three-year degrees in 2022 are likely to enter an industry that is increasingly coupling with technologies such as green hydrogen, creating vast opportunities and generating its own competence requirements.
Tapping into competence by extending the season
One potential route that should boost competence is through the increasing prevalence of offshore wind projects south of the equator. A significant portion of the world’s offshore wind fleet (both current and planned) is located above 0° latitude, with seasonality dictating a high volume of work to be executed in just a few months. However, with countries including Australia, New Zealand and Uruguay looking at offshore wind, this could begin to change, which would allow international business to work offshore year-round while also upskilling the local workforce. New Zealand is currently undertaking an industry capability mapping study with the first wind farm proposed as 1 GW from 70 wind turbines. Uruguay’s state oil and gas firm Ancap is preparing a series of offshore green hydrogen and wind tender rounds starting in 2023.
If the offshore wind industry can build offshore year-round, contractors could then also contribute their competence continuously as well as being available to increase competence in more junior staff members. A greater use of joint ventures and frameworks to allow smaller companies to execute work packages would also help to bridge the competency gap – allowing the industry to tap into small pockets of highly skilled workers.
Finally, service operation vessels built specifically for the wind industry, as well as purpose-built walk-to-work vessels, can increasingly provide access to platforms during bad weather, safely extending the season in Northern Europe. This further increases the opportunity for competence building by extending the potential for cross training from different regions.
We do not have all the answers, but what is apparent is that increasing the headcount of the workforce will not allow the energy industry to achieve its goals in the safest, most efficient and effective way if we do not consider the need for competence. We must begin to prioritize competence before it becomes an unmanageable risk to offshore wind and to the energy transition in general.
Wayne Mulhall is managing director of James Fisher Renewables. Wayne has significant experience in the offshore wind industry, having held a senior role at MHI Vestas Offshore Wind and prior to this, senior positions at Siemens Gamesa and Rolls Royce. He led the successful delivery of the UK’s first 8-MW turbines at Burbo Bank, and has experience of subsea, topside and onshore balance of plant. Moreover, he worked for two of the largest turbine OEM’s in the world, and managed operations in UK, Benelux, Japan, Taiwan and the US, offering an international perspective that spans the supply chain.
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