Energy Sector: Digital Skills Requirement for Net Zero
A Case Study conducted with Flare Solutions Ltd and the Nuclear Decommissioning Authority
Case Study Authors:
Dr Daniel Brown (Flare Solutions Ltd), Dave Clark (NDA), Dr Aida Garcia Lazaro and Dr Susan Lattanzio (University of Bath), Dr Jorge Mendez Astudillo (IIEc, UNAM)
Context
The government's transition strategy to a net-zero energy sector relies heavily on the increased use of digital technologies. The oil and gas industry provide 80% of all jobs in the energy sector (OEUK, 2024), but over time, jobs are expected to transition from oil and gas to renewable energies (wind, carbon storage, etc.).
Historically, the oil and gas sector has had low digital maturity (OEUK, 2020). This is significant, because if oil and gas workers lack the digital skills required by other sectors, they will be at a disadvantage when applying for roles outside their current industry. Consequently, the renewable energy sector may recruit from elsewhere, which would have considerable implications for regions like Scotland, where oil and gas employment is heavily concentrated.
A ‘just’ and rapid energy transition requires an oil and gas workforce well equipped with the digital skills required to meet current needs in oil and gas, but also the digital skills required in the renewable sector (wind, carbon storage, hydrogen) and in other industries such as nuclear, civil engineering, and manufacturing as labour demand shifts.
Objective
We wanted to understand the evolving digital requirements of jobs in the offshore oil and gas sector. To achieve this, we collaborated to create a Digital Skills Classification methodology, which we have applied to the oil and gas sector, but is replicable across other industries. This methodology allows for like for like comparison and provides a comprehensive and robust understanding of digital skills requirements, thereby guiding effective policy and training initiatives across the UK.
Approach
A dictionary of 5,706 digital skills was created, covering the information technology category, as well as subcategories for business intelligence software and computer-aided manufacturing. The dictionary was created using the Lightcast skills taxonomy.
These digital skills were classified, using our methodology, into four levels: basic, intermediate, advanced, and advanced with programming. We then applied our Digital Skills Classification to the oil and gas sub-sector, analysing 75,474 online job vacancies from 2015 to 2022.
Insight
Between 2015 and 2022, the number of jobs in oil and gas requiring any form of digital skill rose from a third to over 50%. By 2022, the demand for digital skills in oil and gas had increased and had caught up with the manufacturing and electricity sectors. However, it still lagged behind finance and insurance services. Our analysis also revealed a growing demand for intermediate and advanced digital skills in the oil and gas industry, while the number of job vacancies demanding only basic skills fell by 50%.
The increased demand for digital skills in oil and gas is encouraging, evidencing the skills required for a future transition to renewable energies should become embedded in the workforce over time. However, historically low levels of on-the-job digital training (OEUK, 2020 & 2023) and challenges in filling positions with a digital skills requirement indicate that the current level of digital skill in the workforce may pose a barrier both to recruitment in oil and gas, and to job mobility to other sectors. By 2022, 40% of digital roles required intermediate digital skills, further highlighting the need identified by Skills Development Scotland in their Digital Economy Skills Action Plan for the development of an industry intermediate digital skills framework. This would enable organisations to assess their current capability, and plan the digital skills development work needed to address any gaps identified.
Additional Resources
SDS, 2023 Digital Economy Skills Action Plan
Impact
A “just” energy transition demands that as the UK’s need for oil and gas reduces, its oil and gas workforce can find good jobs in other energies, or in the wider economy. A digital skills gap between oil and gas and other sectors would prevent this.
The Digital Skills Classification methodology created by P-LD research shows in black and white how digital skills requirements have changed in oil and gas. Their analysis identifies the policy and training interventions required to ensure workers’ digital skills support a just transition, rather than prevent it.” Dr Daniel Brown, Chief Business Architect, Flare Solutions Ltd
“The work in collaboration with the P-LD and Flare Solutions Ltd has proven to be an invaluable resource that we will use to inform both our strategic workforce planning along with underpinning the requirements for intermediate level skills development across the industry. It’s output and the methodology used has proved the value of industrial and academic collaboration and hopefully will set the stage for continuation of this.” Dave Clark, Asset Management and Continuous Improvement Manager, Nuclear Decommissioning Authority
For further information on this case study please contact the P-LD at P-LD@bath.ac.uk
Acknowledgement
The work reported in this paper was supported by the Made Smarter Innovation: Centre for People-Led Digitalisation, at the University of Bath, University of Nottingham, and Loughborough University. The project is funded by the Engineering and Physical Sciences Research Council (EPSRC) Grant EP/V062042/1. It was conducted in collaboration with Flare Solutions Ltd, The Nuclear Decommissioning Authority, and the Institute of Economics Research (IIEc) at the National Autonomous University of Mexico (UNAM).