Any nation seeking to establish itself as a market leader in renewable energy will have to compete for talent on a global scale. Government policies and cuts could lead to both a shortage of home-grown talent and the UK being at a disadvantage on the world stage.
Scotland is bidding to be a renewables market leader. First minister of the devolved administration Alex Salmond is committed to supplying 100 per cent of electricity demand from renewable resources by 2020 and argues that Scotland could become the “Saudi Arabia of renewable energy”.
The country has factors in its favour. The success of the North Sea oil and gas industry is one of the greatest feats of modern engineering, and has witnessed the construction of massive structures in an inhospitable environment. It has called for sophisticated steel and fabrication technology, advanced vessels and helicopters, as well as the logistical support systems needed to get people to and from the rigs. This experience has been developed over the past 45 years and is now just as applicable to turbine technology, with many of the companies involved in their design and construction typically active in both sectors.
However, a report by the Institution of Mechanical Engineers throws doubt on Scotland’s renewables ambitions. It warns that the 100 per cent target would need capacity to be built at five times the rate of the past decade over the next eight years, despite the fact that all the best sites for onshore wind are already taken. It also puts question marks over Scotland’s ability to provide the human resources needed to design, project manage, install and commission the volume of equipment that will be required to meet these ambitious targets, and the ability to manufacture it.
Similar doubts have been expressed for the UK as a whole. There are two dimensions to the skills shortage. First, there is an ageing workforce within oil and gas, meaning the availability of specialist skills and experience is tailing off. The industry has simply been unable to replace this quickly enough – from the geologists and geophysicists working at the early stage of exploration, through to drilling engineers, and reservoir and production technologists. Moreover, not all oil and gas professionals will want to work in renewable energy, because they can also feed into a variety of other sectors such as automotive and aerospace.
Second, the UK faces fierce international competition – especially from markets such as Brazil, Indonesia, Singapore and Thailand, where there is booming demand for experienced oil and gas professionals, as well as China and Germany, which have emerged as leaders in the renewable energy space.
On top of that, the UK’s competitiveness is also affected in the short-to-medium term by current policy on immigration and education. Changes to the points-based system of immigration that took effect in April 2011 make it almost impossible for companies to recruit talent from non-European Union countries, while many of the limited training places offered in the UK for MScs and PhDs are going to overseas students, who then return to their home countries.
While there is a through-flow of skills, there will be continued flight over the longer term because highly-skilled engineers are being drawn to emerging markets in Asia, Australia and the Middle East, or other developed countries with good standards of living, high growth economies and preferential tax rates.
Boosting gross numbers would help. A report by inventor Sir James Dyson in 2010 found that in engineering, the number of UK-resident PhD students had more than halved over the past ten years. It is easy to forget that the government supported the oil and gas supply chain in its early days with generous tax incentives, training programmes, strategic infrastructure and supportive regulation.
Today, the boom in offshore wind technologies calls for mechanical engineers skilled in gear box technology, loads and aerodynamics; as well as chemical engineers with knowledge of composite materials used in the design of turbine blades. At the same time, the energy industry in general needs more electrical engineers experienced in generator, converter and grid technology.
EngineeringUK says that an extra two million engineers will be needed in the UK by the time today’s primary school children reach working age. With engineering generating £1.15 trillion in turnover in the year ending March 2010, the industry association predicts a massive surge in engineering jobs, but says these might well disappear overseas if the UK skills base cannot meet demand.
Rather than the political grandstanding we see today, there needs to be a long-term plan to ensure the best talent is cultivated and kept within the UK to provide the calibre of people required to compete on a global scale (see graduates feature, page 20). The UK needs more engineering schools like Scotland’s Heriot Watt, one of the globally-renowned schools in petroleum, oil and gas.
It also needs to raise the identity of engineering and ensure that its importance and credibility cascades down to grass roots level so that when a child starts school, instead of wanting to be like Alan Sugar, they are talking about Isambard Kingdom Brunel, Sir James Dyson and James Watt.
Paul Flynn is co-founder of recruitment specialist Eurostaff
Atomic numbers: doing the sums highlights the potential bottlenecks in staffing Europe’s nuclear revival
Despite Fukushima, the nuclear renaissance is continuing, albeit at a slower pace. Research conducted in the months after the Japanese disaster shows that about 39 countries are planning and willing to implement a new nuclear programme and about 533 new units are officially being considered, planned or under construction. Hence capital investment could exceed €2 trillion (£1.7 trillion) within the next two decades.
The availability of suitably qualified and experienced labour will obviously be crucial to delivering this revival. A first estimation of global labour demand can be derived through a standardised labour curve, which assumes an average construction and commissioning period of 5.5 years (see figure 1). This also factors in the completion of several preparatory activities which are assumed to take up to 8.5 years – for example, project set-up, pre-feasibility and site studies, and plant supplier selection.
Based on this approach, on an aggregated level almost 16,000 man-years is needed during the life-cycle of one new nuclear plant. This number does not take into account upstream equipment manufacturing labour. The majority of people are workers and craftsmen who fulfil tasks onsite during construction (9,000 man-years). This is followed by people involved in design engineering activities (2,100 man-years). The third largest group is involved in project management and project development activities (900 man-years). About 400 full-time equivalents (FTEs) are needed for plant operation.
Assuming all new build projects are successful, this means that by 2018, 488,000 FTEs will be working on nuclear new-build simultaneously. Since not all projects will reach commercial operation, a realistic analysis predicts 275,000 FTEs and a pessimistic simulation leads to 163,000 FTEs by 2018.
The overall labour demand in Europe (excluding Russia) and worldwide is highly dependent on future energy mix developments and the political attitude towards nuclear power. These boundary conditions lead to three European labour demand scenarios, which vary significantly. The scenarios focus on new-build itself and exclude operational staff and upstream manufacturing labour.
If project schedules achieve current projections, about 74,000 FTEs will be needed to work on nuclear new-build by 2020. Compared to the full-time equivalents working on nuclear new build today, this relates to a compound annual growth rate of 15 per cent for the next ten years. The pessimistic case estimates a peak of only 20,500 FTEs.
Using the realistic case as the base scenario, which takes into account cancellations and delays of several projects, a labour-demand peak of 35,000 FTEs is estimated. Although this number is significantly lower than the optimistic case, it still reflects a compound annual growth in labour demand of 10 per cent.
In 2021, it is expected that about 5,600 FTEs will concurrently be needed to support engineering and design activities, and other engineering related tasks. At the same time, about 2,100 FTEs will be needed to manage and co-ordinate the programmes and another 1,900 FTEs will be required for quality assurance and control to ensure construction meets safety and design requirements. The bulk of the work in 2021 – exceeding 25,000 FTEs – will be in construction and installation. Since most European new-build programmes will be in an advanced state in 2021, few project developers will be needed. Over the life-cycle of a new-build, the labour demand model for the realistic case leads to an overall demand of 377,500 man-years in Europe from now until 2025.
Taking another angle, we can look at what level of educational attainment workers will need to perform the required jobs (see figure 2).
The highest demand will be for non-academics such as carpenters and technicians. These account for more than 28,000 FTEs in 2021. Undergraduate studies in various fields, such as engineering and general management, will be sufficient for about 4,700 FTE staff in 2021. A graduate degree will be required only for senior positions in engineering and management. They represent only about 2,150 FTEs in 2021, considering the realistic case. Admittedly, employers may prefer those with higher-than-minimum educational levels for some positions.
Anyone wishing to own, undertake or manage a new-build nuclear project should look in detail at the labour demand issues outlined here to understand bottlenecks and risks.
Michael Kruse is a principal and Julia Heizinger a consultant
at Arthur D Little
This article first appeared in Utility Week’s print edition of 9 March 2012.
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