Unlocking the Labour Market Consequesnces of the Energy Transition

However, the solar PV industry experienced a significant decrease after the German government reduced the financial incentives for renewable energy technologies. This abrupt policy change had caused a rush of installations before the new tariffs took effect, leading to a temporary boom followed by a sharp decline in demand for solar PV systems. The sharp decline, therefore, has led to a significant reduction in jobs within the solar energy sector. 

Solar PV panel production and installation jobs fell from 150,000 in 2011 to just over 28,000 in 2018 (Clean Energy Wire, 2021). Similarly, the wind industry declined from about 108,000 in 2016 to less than 70,000 in 2018. These fluctuations had exposed Germany's renewable energy sector to more risks, especially from international markets and domestic policy changes. These risks may have included uncertainties in the supply chain, such as price fluctuations and trade policies because the fluctuation in employment may have caused a disruption and uncertainty in the supply chain.

The employment rates in the energy sector started increasing again only from 2019 onwards. In 2022, 386,700 workers were in the renewable energy sector which was an increase by 15% from the previous year and the highest in a decade  (Renewable Wire Energy, 2024).  The growth in Germany's renewable energy sector can be seen as a sign of recovery and adaptation to the global economy, as well as a testament to the ongoing creation of jobs in this field as the country continues to transition towards a power supply dominated by renewable sources. Looking at these various employment patterns along the policy changes that have been done, it is possible to identify several factors that affect the development of jobs in the renewable energy sector beyond policy shifts and global competition.

Job Displacements and Adjustments

The German labour market has had to adapt to the changes in renewable technologies. As the efficiency and cost-effectiveness of renewable energy keep rapidly improving, the demand for people with higher skills in these industries has also increased. The demand has grown not only for positions that are directly involved in the creation and installation of renewable energy technologies but also for those involved in research and development upkeep and the enhancement of the essential infrastructure to facilitate the increasing presence of renewables in the energy blend.

his experience from Germany's energy transition can set a benchmark for Indonesia to follow in its own energy transition efforts. How should we, as a country and as an economy prepare for reskilling and upskilling the existing workforce to adapt to the changes? Workers from traditional energy sectors such as coal and oil and gas have often faced challenges to adjust to the new trends in the energy industry such as increased competition from renewable energy sources, stricter environmental regulations, and the elimination of coal power plants. 

For instance, the European Court of Auditors' data mentions that employment in the coal-mining in the Lausitz region of Brandenburg and Saxony has decreased from 80,000 during the key period of decline from 1990 to 2000, to 6202 employees in 2018 (European Union, 2022). 

In addition, employees who previously worked in the traditional energy sector often face difficulties in obtaining satisfying jobs in the renewable energy sector since the specializations needed are different. For example, coal miners may not possess the technical skills needed to secure jobs in renewable energy fields such as solar and wind energy production. Moreover, the older workers in these sectors may need help to retain or learn new skills due to age-related barriers or financial constraints.

German Government Policy Incentives

The German government and industry stakeholders have put in a range of policies and measures aimed to assist workers and regions affected by the shift away from traditional energy sources. Training and education programs are one of the major approaches that have been taken. This is designed to provide knowledge to the workers from traditional energy sectors with skills needed to open up opportunities for them in the renewable energy sector. 

One of the programs implemented in Germany is Vocational Education and Training (VET). It is a training program aimed at helping countries to develop skills and in the process also helping the younger generation to meet the requirements of the future labour market (OECD, 2010). There is also the Coal Compromise Program, which plans to gradually eliminate coal-fired power plants by 2038 while ensuring economic stability and job security for the affected regions and workers who still depend on the coal industry (EESC, 2023).