Insight

The transition of the Scottish energy system away from fossil fuels will require products and services across different supply chains, that may be either domestically produced or imported from other geographical areas. It is widely accepted that this offers a significant economic growth opportunity for Scotland, creating jobs and generating Gross Value Added across different supply chains.

Supply Chain Overview / Breakdown

Each supply chain will typically have companies that make things (parts, components or finished products), companies that build and retrofit things (civil/building construction, mechanical and electrical installation, etc.), and companies that commission, operate and maintain things (infrastructures for electricity generation and distribution, heat generation and distribution and transport vehicles/craft/rolling stock). In addition to this, the supply chains will have service companies to help plan, develop, implement and manage projects and assets (architects, design engineers, planners, asset optimisers, etc.).

Taking the supply chain breakdown described above into consideration, let’s look at a few examples of the energy transition and where jobs will be required across key supply chains.

Greening the Electricity Supply

Significant growth in jobs is projected in onshore wind and solar PV electricity generation in Scotland. Optimat carried out two studies for the ClimateXChange to map current and future workforce and skills requirements for both of these sectors. The study on onshore wind identifies a realistic scenario where there will be an increase in Full Time Equivalent (FTE) jobs from 6,900 in 2024 to around 20,500 in 2027. The study on solar PV identifies a realistic scenario where there will be an increase in FTE jobs from 800 in 2023 to over 11,000 in 2030.

An Optimat study for Skills Development Scotland, investigating Career Opportunities in Scotland across Offshore Wind, reports a growth in job numbers from 9,000 in 2024 to over 40,000 in 2029.

Energy Retrofitting of Existing Buildings

One of the main opportunities for job growth is in the energy retrofitting of existing buildings, consisting of energy efficiency measures, home level heat decarbonisation system installations and construction and connection to district heating systems. In one recent study Optimat carried out for Fife Council, we estimated that there was a peak annual requirement for up to 21,000 FTE jobs (in the mid 2030’s) solely to carry out the energy retrofitting works, depending on the degree to which Scottish Government heat decarbonisation targets were achieved. This scenario related to 670,000 homes being retrofitted in the Fife, Edinburgh and South East Scotland region. With an estimated 2.5m homes in Scotland, this suggests a total peak annual requirement for domestic energy retrofitting of in the region of 78,000 FTE jobs for the nation (this is an indicative number as the mix of dwelling types in Fife, Edinburgh and South East Scotland region is not the same as for Scotland in its entirety). This is additional to the workforce required to carry out other construction work and an approximate 7% annual replacement rate for the sector.

Conclusion

Projected job growth associated with the energy transition is significant across several supply chains in Scotland. Whilst offshore wind is, rightly, well publicised as a key economic growth opportunity, the scale of jobs required to carry out energy retrofit works to the Scottish housing stock could lead to additional jobs at a scale similar to, or greater than, that required for offshore wind. This highlights a major opportunity not just for decarbonisation, but for creating thousands of skilled, local jobs across construction, manufacturing, and related sectors.