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Insider UK
Environment
Peter A Walker

'Lessons must be learned' from coal during oil and gas transition

SSE's HR director has claimed that around 90% of existing oil and gas jobs should be transferrable to renewable energy "without that much planning", although he conceded that there does still need to be a "sensible process" for managing the transition.

During a panel discussion on navigating the road to net zero emissions at the Chartered Institute of Personnel and Development (CIPD) Scotland conference, John Stewart admitted that Scotland should hopefully have learned lessons from a similar process following the closure of the nation's coal-fired power plants.

When SSE had to do so, he explained that the process was started as early as possible with those affected, "talking to people about when things would happen, what they could do afterwards, managing the exit while being clear and upfront".

Stewart continued: "We haven't got a great track record in managing these kind of transitions, so this is a challenge in re-skilling people, moving from on career or community to another.

"What skills can we transition and what are the gaps between them?"

Marek Zemanik, senior public policy adviser at the CIPD, shared the stage and explained that employers - alongside the government - have a key role to play in ensuring that the transition is as 'just' as possible.

"It's currently unclear whether the current decline in oil and gas sector jobs will be exactly matched up by new opportunities in renewable energy - it could well be mismatched, so government needs to step in to help, through initiatives like PACE [Partnership Action for Continuing Employment] and other schemes."

Stewart said that while there are a lot of transferrable skills, some jobs don't have a clear alternative on the renewables side, adding: "Building an offshore wind farm, unlike a rig, you don't need people living in those for weeks on end."

Zemanik also pointed out potential gaps in wages, noting that the average offshore extraction salary is £88,000 - with much of this 'inflation' coming from the work-life-balance and health and safety issues inherent in rig work.

"There's a real concern that the transfer to renewables will see those salaries not be so inflated, but these 'floating hotel' jobs will largely disappear in the coming years, which will have to be reflected in the changing reward packages."

Stewart, who is dealing with exactly these issues in his HR director role, said that while wages won't always match, SSE is at least trying to be transparent about terms and conditions.

"Where people can make the transition, we're trying to find as many match points within reward packages," he added.

Fundamentally though, Stewart pointed to the fact that currently renewable energy sources are intermittent, requiring storage systems and hydrogen back-up in the long-term, and oil and gas to continue providing UK energy stability in the medium-term.

"There will be tension around the transition, but we can manage that through grown-up discussions.

"We have to think long term, as it takes a minimum of about seven years to get an offshore wind farm up and running."

Stewart stated that while there's a real competence in offshore work in Scotland, "we do need to get better at planning, as these things take too long to get going", adding that "there needs to be a reform of this process - because we're not going fast enough and consequently the supply chain doesn't know how much capacity to build out".

Zemanik's echoed this call, stating: "In general, the governments have been very good at setting targets, but that's all they are, the truth is, we're very good at planning, but a bit poorer on the actual steps to get there.

"Public policy has a role to play within labour market planning, given the pace of change only increasing, but what can really help organisations is to have a flexible skills development system - and I think a lot more can be done to reform this."

Stewart added that while SSE is currently not seeing significant short-term skills shortages, "looking ahead, things like the ScotWind project doubling in size has meant we've had to reassess our long-term staffing levels".

This has led his team to consider whether these can be built these in-house, bought in, or borrowed from elsewhere.

"We're trying a variety of things, like pilot projects, retraining existing staff, creating partnerships with other industries, it's very much trial and error, thinking outside the box to see what works."

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