Skills required to support potential economic growth in the NI sustainable energy sector

Rob Williams

Belfast, 7th September 2011

Presentation Structure

1. Scope

2. Approach

3. Results• Current sector size and nature• Prospects and barriers• Skills supply vs. demand

4. Conclusions and policy remarks

Scope

• To achieve the following outputs: ◦ Estimate the current size of the Sustainable Energy (SE)

sector in NI ◦ Estimate the future potential growth rates in the SE

subsectors ◦ Model the staff / skills profiles in each of the sectors◦ Apply the growth rates to the current sector size and

profile to estimate future skills needs ◦ Analyse the current supply of relevant skills ◦ Compare the supply of skills to the future demand for

skills to illustrate what gaps between supply and demand may develop

Scope – Sustainable Energy Sectors

• Integrated Building Technology ◦ Energy efficiency and renewables in new and existing

buildings.◦ Large energy user, large amounts of buildings to be

refurbished, large employer.• Offshore Energy

◦ Offshore wind, wave and tidal. ◦ Large resource, wind developing, wave and tidal research

skills.• Bioenergy

◦ Production and utilisation of biomass for energy. ◦ Large resource and new and diversified employment

opportunities. • Energy Storage

◦ Storage of electricity (and gas), Smart grid.◦ Key enabling technology with global potential.

Approach

• Involved a combination of:◦ Literature review, company survey (140 from 450),

consultations (40+), workshop and modelling

• Sector size and profile ◦ Based on BIS Low Carbon and Environmental Goods and

Services (LCEGS) descriptions ◦ Fractions of the four digit SIC codes – number of

companies employment, GVA◦ Reality tested via consultations and survey◦ Typical skills profiles for sectors, refined via survey

• Market growth◦ Annual growth rates to 2020◦ Wide variety of sources, low to high scenarios◦ Not just NI, not aiming at ‘self sufficiency’

Current Sector Size and Nature

Current (2010) Estimate of the Turnover and Size of the Sustainable Energy Sector in NI

Sustainable Energy Sector GVA £m Number of companies Employment

Integrated Building Technology 92.1 634 1,798

Offshore Energy 31.7 94 476

Bio Energy 26.0 239 1,106

Energy Storage 25.6 73 526

Total 175.4 1,040 3,906

Share of NI Total (GVA, No. companies and Employment) 0.92% 1.52% 0.56%

Source: Ecorys Modelling

• Confident in order of magnitude, but estimate– Part of larger sectors– Fast moving and fluid– International

Current Sector Size and Nature NI SE Sectors

SOC 1 Managers and Senior Officials

17%

SOC 2 Professional Occupations

19%

SOC 3 Associate Professional and

Technical Occupations

8%

SOC 4 Administrative and

Secretarial Occupations

9%

SOC 5 Skilled Trades

Occupations15%

SOC 6 Personal Service

Occupations2%

SOC 7 Sales and Customer Service

Occupations5%

SOC 8 Process, Plant and Machine

Operations20%

SOC 9 Elementary Occupations

5%

Whole NI Economy

SOC 1 Managers and Senior Off icials

11%

SOC 2 Professional Occupations

12%

SOC 3 Associate Professional and

Technical Occupations

12%

SOC 4 Administrative and

Secretarial Occupations

14%

SOC 5 Skilled Trades

Occupations16%

SOC 6 Personal Service

Occupations9%

SOC 7 Sales and Customer Service

Occupations7%

SOC 8 Process, Plant and Machine

Operations9%

SOC 9 Elementary Occupations

10%

Source: Ecorys Modelling Labour force survey

• Staffing profile◦ High skilled◦ Manufacturing focus, lower input from sales and support◦ Technology development, some at early stage

Prospects and Barriers

• Multiple sources. E.g. – BIS, Renewable Energy Action Plans, Sustainable Energy Authority Ireland

• If NI is to meet 40% of its electricity demand from renewables by 2020, generation would need to grow by 13% per year

Annual Growth Rates to 2020 for Sustainable Energy Sectors (and Sub-sectors)

Annual Growth of Market Size to 2020 (%) Sub Sector

Low Central High

Integrated Building Technology 5.5 10 15

Offshore - wind 17 27 32

Offshore - wave, tidal 7 26.5 40

Bioenergy -electricity 5.7 6.7 29

Bioenergy -heat 3.9 9.4 22

Bioenergy -transport 6.2 9.5 13.8

Energy storage 3 4 6

Supply of Skills

– Large proportion of skills and educational requirements of the SE sector are not new

– Science, Technology, Engineering and Maths (STEM) core skills are key.

– FE and HE provision of entirely relevant courses (e.g. electrical engineering) and relevant units within other courses (e.g. biomass within a land management course).

– Carbon Zero Project – collated existing provision and helped develop new and additional. 526 enrolled in 09/10.

– Some strong research and teaching skills in HE – e.g. Questor at Queen's, UU School of the Built Environment.

– FE has large numbers enrolled in relevant areas (e.g. 2009/10 - 7,172 engineering and 9,781 construction)

– Had to estimate what % of ‘generalists’ will go into SE

Demand vs. Supply

Demand- Projected to

increase from ~500 annually in 2011 to >860 in 2015 (central)

Supply- Base skills

(engineering) allocated to and between sectors by relative size

- Est. ~350 skilled people supplied each year

Projections of Skiiled Worker Requirements in the Sustainable Energy Sector in NI

420Low

Central

863

High

1680

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Ann

ual S

E s

kille

d w

orke

rs r

equi

red

Demand v Supply

• Annual gap between supply

& demand, est ~175 / year

• Biggest gaps in Offshore

Energy and IBT• Only small / no shortages in

Bioenergy and Energy

Storage

• Total gap of around 900 by

2015– Over 500 in Offshore

Energy

Average Annual Gap Between Skills Demand and Supply for the Sustainable Energy Sector in NI

Offshore Energy

Bio Energy

Energy Storage

Integrated Building

Technology

-25

0

25

50

75

100

125

Ind

ivid

ua

ls

Conclusions (and uncertainties)

Demand

– Clearest short term need in offshore wind– Demand in IBT and Bioenergy should grow steadily– Strong medium to long term opportunities in wave, tidal and

the Smart Grid– Government energy policy lead and clarity is key to

demand– There is a need for multidisciplinary skilled workers– Export focus for NI companies is vital for growth, but needs

support– Availability of funds to support courses, upgrade the grid

and provide other SE growth assistance is an issue

Conclusions (and uncertainties)

Supply– The decline in numbers of those pursuing high level

mechanical and electrical engineering courses is a concern– Co-ordination between skills providers is growing and

should continue to be encouraged– Some skills gaps could be filled by attracting back ex-

patriot NI workers – Supporting and developing STEM skills is arguably more

important than trying to match specific needs

Conclusions (and uncertainties)

Supply vs. Demand

– Multiple assumptions required introduce uncertainty– Ideal to match supply and demand

◦ Avoid over and under supply◦ Requires close cooperation between companies and

skills providers◦ Could export ‘surplus’ skills◦ High risk to use public funds in anticipation of demand

– Skills need of large incoming SE companies best met by providing labour market entrants with STEM skills

Policy Remarks - Short Term

Skills Provision• Develop capacity in offshore / marine technician training

Skills Policy• Consider ensuring relevant FE course are on the priority

support list• Support apprenticeships in SE

Other• Use SE to promote STEM skills

Policy Remarks - Medium Term

Skills Provision• Continue the dialogue between industry government and skills providers in

order to anticipate and meet specific skills needs as they emerge • Develop capacity to retain the developed skills in Integrated Building

Technology • Modify the content and branding of some HE courses to include SE content

and references. Skills Policy• Link with Scotland and the rest of the UK in SE promotion and skills

development • Continue to support the developing SE specialisations of the FE providers

Other• Ensure that the planned efforts to publicise and present the policy vision for

SE in NI reach industry and the general public effectively • Communication and education by the network owner and operator and the

Utility Regulator on the plans and efforts underway to improve the structural integrity and energy storage potential of the grid

• Continue support for SMEs wishing to enter, or increase their activity in, the SE sector

Policy Pointers - Longer Term

Skills Provision• Retain and develop the SE skills in the HE sector

Other• Consider linking to future ‘Homecoming / C’Mon Over’

campaigns (or equivalent) to attract back ex patriot workers in SE.

Thank you

Contact Details

Rob WilliamsAssociate Director

0121 212 885607920 494 798

rob.williams@uk.ecorys.com