One skill shortage more than any is holding back Australia in the race to net zero

The race to create zero carbon economies is heating up dramatically in 2022. This is a race to not only secure a safe climate but also to secure prosperity in this century’s global economy.

Australia has finally clocked that this is, in fact, a race, and is getting into gear. Enviably, as the lucky country, we have the head start of an abundance of renewable energy resources – solar and wind – and minerals critical for the production of batteries.

But transforming the economy requires skills as well as raw resources, and here Australia has a shortage and is losing ground to intense global competition.

In this week’s Jobs and Skills Summit the federal government will test their coalition building skills at the table with business and union leaders to tackle skills shortages across many sectors, including ‘future industries’.

While there is a multitude of pressing skills shortages, I believe that one skill stands out as critical to Australia’s future prosperity: that skill is flexibility.

Flexibility is central to both the transformation process and to many of the services in the new economy, making it a central theme in my new book, Amy’s Balancing Act – a tale of clean energy and the power of diversity.

To illustrate the role of flexibility, let’s consider the electricity system, which is at the forefront of decarbonisation and  emblematic of the transformation of old industries.

The electricity system of the 20th century was grounded in assertions of secure fuel supply and centralised control focused on stability and maintenance of long term assets. This slow pace of change was instilled in the communities, trades, engineers, operators and regulators supporting the system.

But over the past twenty years the pace of change has been accelerating dramatically. Last year power from solar panels and wind turbines made up almost a quarter of Australia’s electricity generation, and for a week provided 100% of South Australia’s demand.

Whatsmore, Australia’s solar power comes more from our roofs than solar farms, undermining the approach of centralised control and creating a new way for customers to engage with the system.

Looking a mere 7.5 years ahead to 2030, the target is for 82% of electricity to come from renewables. As highlighted in today’s ESOO report from AEMO, this change is even greater than it sounds once you factor in the electrification of appliances and sectors adding to electricity demand.

So how does flexibility play into this?

On the engineering front, flexibility in generating (and drawing) power is becoming the most valuable capability in the energy market. This is why BlackRock, and most major energy companies, are investing billions into batteries that are incredibly flexible in responding to changes in supply/demand balance.

But technology flexibility is only a small part of system flexibility. More important is the flexibility of the people using and managing the system. 

This human flexibility is a skill deserving comparable investment.

An immediate priority is fostering flexibility within the trades that are building the new energy system. This is vital for keeping up with rapidly evolving technologies and facilitating retraining from declining industries.

Similarly, rapid changes demand flexibility from the staff within the energy market bodies (who play the protagonist role in Amy’s Balancing Act), market participants, and planning and policy departments.

And as consumers of electricity, we will all be asked to flexibly adapt our usage to match weather patterns – particularly through power hungry and easily automated appliances such as water and space heaters and electric vehicles. The switch in electricity prices to now being cheaper during sunlight hours than overnight is an early example of this.

These are just a few examples, from a single sector, of how flexibility is the defining skill of the future economy. 

By investing in flexibility – and embracing the related power of diversity more broadly – Australia will have the natural and human resources to ensure our ongoing prosperity in a zero emissions world.

Written by Bjorn Sturmberg, Research Leader with the Battery Storage and Grid Integration Program. This article originally appeared in Renew Economy.