The Growing Landscape of Employment in the Energy Sector

In recent years, the energy sector has emerged as a beacon of job creation, outpacing the overall economy with impressive momentum. According to the World Energy Employment 2025 report by the International Energy Agency (IEA), the sector has grown at nearly double the rate of the wider economy. Despite this growth, the report also highlighted an urgent challenge: a significant shortage of skilled workers that threatens to impede future progress.

A Snapshot of Energy Job Growth

In 2024, energy jobs surged by 2.2%, reaching a total of 76 million individuals engaged in various roles within the sector. This rise translates to an increase of over 5 million jobs since 2019 and accounts for 2.4% of all net jobs created globally in the last five years. This growth reflects strong investments in power systems and clean technologies, indicating the sector’s essential role in the global labor market.

The Power Sector Takes the Lead

Interestingly, the power sector has now claimed the title of the largest employer in global energy, overtaking traditional fuel supply roles. This shift is propelled by a soaring demand for renewable energy sources, such as solar photovoltaics (PV), as well as expanded employment in areas like nuclear power, grid upgrades, and energy storage projects. Additionally, employment linked to electrification is on the rise, with electric vehicle and battery manufacturing jobs increasing by nearly 800,000 in 2024 alone.

Mixed Trends in Fossil Fuel Sectors

While fossil fuel sectors show varied trends, they do not paint a uniform picture. Notably, coal employment has rebounded in countries like India, China, and Indonesia, resulting in an 8% global increase in coal jobs compared to 2019 levels. However, advanced economies continue to experience job declines in this area. On the other hand, oil and gas employment has largely recovered from the impacts of the pandemic, although current low prices and economic uncertainties could lead to new job cuts by 2025. Overall, energy job growth is predicted to decelerate to 1.3% this year, driven by tightening labor markets and geopolitical tensions that have made companies more cautious.

The Looming Skills Crisis

Despite the energy sector’s robust performance, the IEA warns that labor shortages are a pressing threat. In a survey of over 700 companies, unions, and training institutions, more than half reported significant hiring challenges. This could lead to delayed infrastructure projects, increased operational costs, and hindered progress toward critical energy goals.

As IEA Executive Director Fatih Birol remarked, “Energy has been one of the strongest and most consistent engines of job creation in the global economy during a period marked by significant uncertainties.” However, he cautioned that this momentum cannot be relied upon indefinitely; the world’s energy infrastructure largely depends on having enough skilled workers ready to meet demand.

A Widening Gap in Technical Roles

Technical positions, including electricians, pipefitters, line workers, plant operators, and nuclear engineers, are particularly in short supply. Since 2019, these roles have added 2.5 million jobs and now represent over half of the global energy workforce—more than double their share in the overall labor market. This spike underscores the increasing complexity and specialization required in contemporary energy roles.

Demographic Challenges Compounding the Issue

The challenge is further magnified by demographic shifts. In advanced economies, there are 2.4 energy workers nearing retirement for every new worker under 25 years old. Certain sectors, like nuclear and grid-related professions, face particularly steep gaps, with retirements outpacing new entrants at rates of 1.7 to 1 and 1.4 to 1, respectively. This demographic imbalance signals an urgent need to nurture a new generation of skilled workers, especially in critical roles.

The Urgent Need for Training

To avert a worsening labor shortage by 2030, the report estimates that the number of newly qualified workers entering the energy sector each year must increase by 40%. Achieving this ambitious target would require an additional $2.6 billion in annual global training investments. This amount represents less than 0.1% of global education spending, emphasizing the necessity of prioritizing investment in workforce development.

Policy Interventions to the Rescue

The IEA indicates that policy interventions can play a vital role in easing labor constraints. A range of barriers currently hampers enrollment in energy-related training programs: high costs, lost wages during training, and a lack of awareness about opportunities. Potential solutions include targeted financial incentives, expanded apprenticeship programs, greater industry involvement in curriculum development, improved training facilities, and reskilling initiatives to help workers from the fossil fuel sector transition into burgeoning areas of the energy landscape.

The potential ramifications of inaction are significant; without timely intervention, labor shortages could undermine energy security, diminish economic competitiveness, and impede the transition to cleaner, more resilient infrastructure. As the energy sector continues to expand, addressing these challenges will be essential to harnessing its full potential.