Renewable energy projects have been responsible for significant job creation on a global scale, highlighted by statistics from the International Renewable Energy Agency (IRENA) World Energy Transitions Outlook 2023, which shows that renewable energy jobs soared to 13.7 million in 2022. The energy transition is also expected to create 40 million additional jobs in the energy sector by 2050, with 18 million more jobs globally in renewables alone.
However, one of the findings of the report, and one of the key challenges brought to light at the DEVAC Infrastructure summit held at the beginning of May, is the temporary nature of these jobs. Developing renewable energy plants is, by its nature, heavily project based, which means that once the construction phase is over, the majority of the jobs created will fall away. Sustainable job creation and subsequent economic prosperity in Africa will require a different approach based on skills development and moving up the value chain into component manufacturing.
A whole new world of industry
Between 2012 and 2022, jobs in the renewable energy sector have almost doubled, and grew by a million between 2021 and 2022 alone. According to the report from IRENA, the vast majority of these jobs have been created in the solar photovoltaic (PV) and bioenergy spaces, with hydro and wind power coming in third and fourth respectively. As more nations progress in their goals of reducing emissions and moving toward net zero, the number of opportunities in the renewables sector will only continue to grow.
In South Africa specifically and Africa in general, solar is the fastest growing industry, and the development of utility-scale plants is hugely manual labour-intensive, which means that, in the short term at least, there is potential for the creation of thousands of jobs. However, this is not a sustainable solution for unemployment or economic growth, as the jobs are temporary in nature and once construction is complete, most of them become redundant. A study in Kenyan green mini-grid (GMG) development by the International Labour Organisation shows that, of the 406 jobs created by 33 GMG sites, only 92 of these are permanent, full-time employment, highlighting the extent of the challenge.
The local challenge
South Africa has a significant unemployment problem, with an unemployment rate in Q4 2023 of 32.9% and a youth unemployment rate of 45.5% in Q1 2024. The Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has an estimated cumulative direct employment rate of 69 554 job-years (with a job year being one that lasts for one year), but approximately 49 422 of these job-years are currently in construction. The issue is that construction as a sector offers employment only for a limited period, often in low-skilled jobs, with limited cross-links to other sectors of the economy. The result is a minimal effect on the long-term growth of the economy.
In addition, these jobs are heavily concentrated in the Northern Cape (60%), with the Eastern Cape and Western Cape together have close to a quarter share. Aside from deployment-related jobs, South Africa also has some solar and wind manufacturing capacity, but this is hampered by weak competitiveness with foreign producers and insufficient and variable local demand.
Making it sustainable for economic prosperity
A just transition is about more than moving toward net zero carbon emissions – it needs to include elements of social and economic inclusivity and prosperity, and the creation of sustainable jobs is critical to this. One way to make job creation around renewables more sustainable in Africa is to move up the value chain into the manufacturing of the components used in the development and deployment of renewables plants. This will require a multi-faceted approach, including significant skills development, and collaboration between public and private sector as well as educational facilities.
The right skills need to be taught to children from the ground up, so science, technology, engineering and mathematics (STEM) subjects must be a priority to create a long-term pipeline. Degree qualifications in relevant skills need to be offered at a tertiary level as well. However, to address the immediate need as well as provide skills development to those who missed the opportunity at school, vocational training, apprenticeships and ‘on the job’ training must be prioritised.
It is imperative to ensure that unskilled labourers are upskilled and cross-skilled to ensure they are employable on future projects elsewhere once renewables projects are completed. Semi-skilled labourers can receive more formal training to move them toward more skilled positions. The fourth industrial revolution (4IR) will take away millions of jobs in manual labour, so we need to prioritise upskilling to ensure they will still be employable in the future. 4IR means that higher skills will be required at the lowest levels, but unskilled labourers will be left jobless and unemployable unless this is addressed consistently and as a matter of urgency.
We need to direct our funding toward people development – this is a critical element and often the last area to be addressed, especially in Africa. The reality is that we cannot copy and paste the methodology from the Western world into Africa – we need to approach it from our own perspective to ensure active economic participation and sustainability, otherwise the energy transition will kill economies instead of fuelling prosperity.
Africa cannot be a developing economy forever – we need to invest wisely in our people to ensure the just transition results in growth. One area that offers significant opportunity for Africa is in the development and deployment of green hydrogen, and the DEVAC Hydrogen summit in September will offer unique insight.