Modernizing energy systems requires workers with strong digital skills: IEA

The pace of deploying digital technologies in the energy sector will depend heavily on the ability to build a workforce with the right skills, according to an analysis.

In its latest report, the International Energy Agency said that technologies are set to play a key role in the transition to more secure and sustainable energy systems.

IEA noted that the deployment of advanced technologies could help ensure energy efficiency, reliability, and greater connectivity, along with reducing emissions.

“New digital tools – such as those that can help match power supply with demand; predict and detect faults in networks; or give greater control to consumers – will enable the faster integration of renewables, improve grid stability and unlock greater energy savings,” said the energy agency.

It added: “However, the pace of digitalization will depend heavily on the energy sector’s ability to build a workforce with the right skills.”

Energy sector should concentrate more on digital roles

IEA said the number of digital roles across the energy sector has increased globally. However, there is growing evidence that it remains broadly insufficient, inhibiting greater investment in digitalization.

The report cited an EY survey and noted that 89 percent of the participants from the energy sector identified skills gaps as the main challenge to accelerating the adoption of digital technologies.

“With most jobs set to require digital skills in the coming years, energy utilities will increasingly be competing for a limited pool of qualified workers to bridge the sector’s skills gap. This will require stronger and more cohesive digital hiring strategies and training efforts,” said IEA.

According to the report, countries can be divided into four groups based on interest in hiring workers with digital profiles.

The first group includes nations such as Singapore, Portugal and the Slovak Republic, where employers are actively hiring workers with digital talents across all sectors, including for roles at power utilities.

The second group features countries like Australia and New Zealand, where hiring for tech roles by power utilities is even stronger – outpacing digital hiring across all sectors.

Nations like the US, the UK, and Canada fall into the third group. In these countries, the share of job vacancies that require digital skills posted by power utilities is higher than for the economy as a whole, but overall, digital recruitment remains low.

In contrast, the fourth group sees low demand for digital roles overall and in the power sector. It includes the majority of EU member states, along with certain Latin American and North African nations.

“Europe has consistently had a low share of digital jobs, especially between 2022 and 2023, indicating that countries in the region may not be fully leveraging their investments in digital equipment,” said IEA.

According to the report, power utilities have been slower to create significant numbers of digital jobs than other sectors, such as finance, insurance, and public administration.

“In recent years, digital job postings approached 16 percent of total listings by finance and insurance companies, whereas the share for power utilities stagnated around 11 percent, with a decline below 9 percent between 2017 and 2021,” the energy think tank noted.

A shift in demand for skills

According to IEA, expertise in structured query language of SQL – a programming language used for managing and manipulating data – was among the most sought-after digital skills in the energy sector in 2012.

At that time, the demand for a workforce with expertise in scripting languages or knowledge of cloud solutions was rarely required.

However, since mid-2021, demand has grown rapidly for workers with skills in data analysis, scripting languages and cloud solutions, in addition to SQL database talents and cybersecurity expertise.

The report added that demand for employees proficient in machine learning, artificial intelligence, or the Internet of Things is still at very low levels, even though these are extremely powerful tools for power system management.

The vitality of bridging the skills gap

In its report, the energy agency cautioned that failing to bridge the current skills gaps could create bottlenecks in efforts to build more secure and sustainable energy systems.

Underscoring the necessity of adopting a skills-focused digital strategy in the energy sector, IEA suggested some steps to improve and expand current initiatives.

According to the think tank, energy utilities can develop mechanisms to track skills and systematize measurements of digital literacy to ensure they have the talent to manage changing power systems.

“In parallel, having a clear understanding of the skills needed can improve the effectiveness of the policy actions for supporting the shift toward a more sustainable economy,” said IEA.

The report also highlighted that the energy sector should increase the attractiveness of digital roles by creating an environment of innovation and growth, offering appealing career paths and opportunities for professionals seeking dynamic positions.

The energy agency further pointed out that workforces in the digital sector should be empowered through internal training programs.

“Utilities can implement training and upskilling programs to equip current employees with essential digital skills, fostering a culture of continuous learning, a sense of ownership and allowing for adaptation to technological advancements,” said IEA.

It added: “By designing training programs to be more inclusive – for example, making them targeted to increase gender parity – governments and industry can respond to labor demand while capitalizing on opportunities to build a more diverse workforce of the future.”

IEA concluded by saying that energy utilities can engage with governments and other stakeholders to develop training initiatives and curricula tailored to address current and future market demand for digital skills, creating a solid pipeline of well-trained talent.