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6th September 2024
Eleanor Dun
Clean Energy Workforce Section
Department of Climate Change, Energy, the Environment and Water
GPO Box 3090, Canberra ACT 2601, Australia
Dear Eleanor,
Re: National Energy Workforce Strategy consultation
The Australian Hydrogen Council (AHC) welcomes the opportunity to engage with the development of the National Energy Workforce Strategy (NEWS).
The AHC is the peak body for the hydrogen industry and our membership includes companies from across the hydrogen value chain. Our members are at the forefront of Australia’s hydrogen industry, developing the technology, skills and partnerships necessary to ensure that hydrogen and its derivatives play a meaningful role in decarbonising Australian industry.
We are pleased to see the development of the NEWS, especially in a time of significant change and ambition in the energy sector. Understanding, mapping and planning for the future energy workforce is a complex and shifting task as Australian governments and industry develop their vision.
In this submission, we explore the role and expected growth of Australia’s renewable hydrogen industry, the challenges of modelling the hydrogen workforce and the limitations of existing studies, before discussing how these considerations should influence the development of the NEWS and advocate for this strategy to include the full hydrogen value chain within its scope.
Policy context and future growth of hydrogen
The proposed Future Made in Australia Act (FMIA) is expected to significantly impact the future trajectory of Australia’s energy investment and, therefore, workforce. The Australian Government has committed $22.7 billion over ten years for this policy framework, which is a vital response to changes in global supply chains and energy security, as well as a necessary step to reinvigorate Australian capabilities and grow economic complexity.
Five industries have been announced as aligned with the National Interest Framework under the FMIA:
- Renewable hydrogen
- Critical minerals processing
- Green metals
- Low carbon liquid fuels
- Clean energy manufacturing, including battery and solar panel supply chains.
These industries are clearly vital for Australia’s decarbonisation and sovereign capabilities. Hydrogen also plays a role in most of them. Beyond renewable hydrogen itself (to decarbonise the hard to electrify parts of our economy, and as a potential export), producing green metals includes hydrogen to make iron from our iron ore and alumina from our bauxite. And low carbon liquid fuels, such as sustainable aviation fuel (SAF), need hydrogen as a feedstock to support scale when there is insufficient biofuel. There will be other manufacturing opportunities as well, such as components and assembly for electrolysers.
The FMIA package, amongst other domestic and international mechanisms, will see significant growth in the Australian hydrogen industry by the end of the decade. Australia will need to prepare for the implications of this committed ambition on the energy workforce.
Challenges facing the hydrogen workforce
Discussions regarding the hydrogen workforce tend to default to the upstream considerations for the energy inputs, such as the number of engineers required to build gigawatts of renewable energy capacity per year. Preparing for the decarbonisation of Australia’s electrons is a significant and immediate task. It is also well researched and understood. Therefore, focusing on this section of the value chain is an understandable approach because the answers are known and actionable.
However, working within this upstream scope does not prepare or model the needs of the nascent hydrogen industry and the necessary molecules to reach net zero.
The hydrogen industry is complex and its value chain is not contained to a single sector, which makes it particularly difficult to assess and plan for. This industry covers a variety of workforce roles across this value chain (see Figure 1), from within the production of hydrogen, the feedstocks of chemicals, green metals and low carbon liquid fuels, to the extensions both upstream and downstream including in electrolyser manufacturing, fuel cell maintenance, the energy inputs, as well as construction, transport and storage.
As an emerging industry, the full hydrogen ecosystem needs to be established, which extends the required skills and roles beyond the boundaries of the production of energy. While there is an existing hydrogen industry in Australia, this is not decarbonised or at a scale where the supply chains or infrastructure will support the scale for net zero. Every section of the hydrogen supply chain must be assessed, planned for, built and regulated, which will result in an increase of workforce needs in each.
Figure 1: Hydrogen supply chain framework. Source: ARUP 2023.[1]
The diverse array of what is considered a hydrogen job in the emerging industry has, unfortunately, led to the workforce being insufficiently understood and modelled, and has left data gaps. There is still very little clarity and publicly available modelling on the scale, composition, location and pace of the emerging clean and green hydrogen workforce, let alone how this will be affected by the new ambition and investment of the FMIA.
This workforce is insufficiently understood partially due to the limitations and challenges of the existing modelling. These include that:
- Past hydrogen modelling has had a narrow scope of hydrogen’s role. Hydrogen specific workforce modelling to date, while valuable and appreciated, has only covered small segments of the industry. This includes the hydrogen workforce taxonomy out of South Australia (which is not yet public), and the current New South Wales work package out of the National Hydrogen Strategy, both of which only examine production. The workforce will extend beyond hydrogen production facilities and needs to at least consider the generation of hydrogen derivative and fuels to consider further needs within energy, such as its storage and the production of derivates.
- Hydrogen has been viewed through one sector at a time. We have established that hydrogen is often narrowly viewed within energy generation, but past modelling has also placed hydrogen only within energy. There are diverse roles required across various end uses, manufacturing, transport and even emergency services, which demands a whole of economy approach.
Looking closer at the Jobs and Skills Australia Clean Energy Generation workforce typology that the NEWS is based on, the hydrogen workforce occupies an ambiguous position. The report noted challenges in capturing and modelling the hydrogen production workforce because this is globally nascent.[2] This resulted in the report placing hydrogen taxonomically within clean energy demand. In our view, this categorisation does not sufficiently capture the scope of hydrogen’s role in the energy sector, let alone its importance to industries and net zero.
We also note, the 2022 AEMO Integrated Sector Plan workforce modelling focused on electricity generation, and the hydrogen that was considered in the wider work does not cover the full spectrum of on and off grid projects. We have closely engaged with the modelling under the Net Zero Australia[3] and NERA HETS[4] works, and while more comprehensive, these are also limited due to their context and should be reviewed and rerun in the new policy environment. - Different hydrogen models are incomparable. Across the various pieces of analysis, there are inconsistent methodologies and input assumptions that produce different results and impede comparing job projections. No study has comprehensively examined the workforce and skill requirements across the hydrogen industry over time. This limits the policy applications of these findings, particularly regarding education, training and regional development.
Each of these challenges could be addressed by a federally run assessment of the current and forecast hydrogen workforce. This modelling needs to comprehensively cover the full hydrogen value chain within Australia, either in a single or series of work packages. This would need consistent methodologies and inputs, and be flexible to policy changes. The Australian Government is the natural owner of this undertaking. The Australian Government already holds the strategic direction and action plan for Australia’s policy framework, as well as the most extensive knowledge bank of Australian hydrogen projects through the Hydrogen Hubs, Hydrogen Headstart, ARENA and CEFC processes.
It’s all the more important that this work happens because we know that there are already challenges acquiring the skills for a new hydrogen project or technology. We have heard from our members across the hydrogen value chain regarding shortages and concerns about how some emerging skills will be developed and by when (such as the maintenance of electrolysers and fuel cells). Our members foresee shortages in the construction phase, acquiring project managers and designers, as well as the necessary skills in electrotech, hazardous areas and the variety of engineering disciplines. This challenge is further evident in the extended time it takes to fill an advertised role, or the price for a high quality employment firm. Both of which are stretched due to the strong competition for skills, especially from the established energy and mining sectors.
The gaps and challenges will only become more extensive as the industry scales up. Hydrogen is required for Australia to reach net zero but the emerging industry is not yet commercially viable, so hydrogen teams are needing to scale while often not at a stage that is bringing in revenue. We are seeing that some of the skills required are currently being covered in-house, but will not be able to accommodate small, let alone significant, expansion. Understanding the needs of the hydrogen workforce should not be left to industry to independently discover; the Australian Government has a role in clarifying and supporting this.
All of this points to a collection of knowledge gaps and uncertainty, as the hydrogen industry workforce – the pace, scale, skills and composition – are not fully or publicly understood. If this modelling is not conducted swiftly, this risks a disorderly, delayed and costly energy transition.
Considerations for the NEWS
The AHC believes that the NEWS must clarify how hydrogen will be covered under the strategy. The NEWS is based on the Clean Energy Generation study which narrowed its focus of hydrogen within energy demand. Clarity is required as to what extent hydrogen will be considered within the scope of the strategy, including incorporation into any forecasts and deliverables.
Looking at the demand category under the NEWS, this also does not appear to align with the hydrogen industry’s role, and the manufacturing sections of the value chain have been explicitly removed from scope. Especially as Australia looks to increase sovereign capabilities through FMIA and the National Interest Framework, it will be integral to model and assess our capabilities, requirements and gaps. To capture the comprehensive role of hydrogen, it should be categorised in the NEWS within but also beyond energy demand, as hydrogen molecules are the input fuel for the hard to electrify sectors of the economy, but its role also extends to technology development and ecosystem planning. We would also ask that you reassess downstream manufacturing within the parameters of the NEWS.
Furthermore, if this strategy is to have a targeted focus (that is, not extend into manufacturing), we would request that the exit point of this aligns with the entry point of additional work, retaining consistent assessment to allow continuation and comparison. To assist the industry with workforce planning, the NEWS should support complete workforce modelling and projections for the industry across the supply chain.
Hydrogen also needs to be captured in the NEWS when addressing the scale of wider Australian workforce issues. These issues include the interpretation of standards between jurisdictions and therefore the alignment and recognition of skills, the mobility of the energy and the sequencing of construction workforces, the capacity and capability of trainers, before even considering the carrying capacity of regional communities, or the housing of a changing energy workforce. Each of these will need to incorporate the scale and requirements of the hydrogen task.
Timing is of the essence
The comprehensive modelling of the full hydrogen workforce has generally been able to be delayed because this was too complex but not imminent at scale, but this is no longer the case. The HPTI has been proposed to start providing $2/kg of hydrogen produced from 1 July 2027, which means that projects will be racing and competing to ensure that they are producing from the start date, maximising their incentive. Therefore, it is integral to understand, model, communicate and begin addressing any issues in preparation for this date.
If working towards 1 July 2027, this leaves less than three years (22 months) to identify and address expected workforce challenges. To better understand the time requirements to do this, the Australian Government should consider the New South Wales hydrogen workforce work package (currently in progress). We have suggested this example because it is the next expected, federally-funded, hydrogen workforce modelling.[5] This work proposes to cover only the production of hydrogen from electrolysis and is expected to be finalised by the end of this financial year. To explore the possible timelines, we will assume the following steps:[6]
- Gap analysis (1+ years). This workforce analysis identifies a skills shortage and notes this in the internal report in June 2025.
- Gap picked up for skilled migration (1+ years). If this gap can’t be filled domestically, it will need to be picked up by the Core Skills Occupation List (CSOL) for skilled migration. This list is updated yearly after Jobs and Skills Australia consults and makes recommendations to the Minister for Immigration, Citizenship and Multicultural Affairs who determines whether the occupation proceeds onto the list.
In 2024, the Draft CSOL was put out for public consultation during May and the Minister has not yet confirmed the occupation lists for skill-related visa programs.[7] If this timeline is similar next year, the hypothetical shortage might not make it onto the CSOL until late 2026. - Attracting and processing skilled migrants (40 days – 59 months). Late 2026 leaves 6-9 months to attract and process skilled migrants. This process is prioritised if there is already a domestic sponsor, but there are still challenges of Australian authorities needing to recognise the applicant’s qualification or training (which is more likely to be delayed if too specifically related to a nascent industry) and allow access as a skilled migrant (noting that the volume of permanent visas has recently been in political debate, shortly before a federal election).[8]
Based on current volumes and resources,[9] visa processing times for a temporary skill shortage visa are estimated to be 90% complete after 40 days (sponsorship visa stream) or 5 months (short term visa stream). If not considered a temporary skill shortage or a skilled employer sponsored regional (provisional) visa, the other skilled visas are expected to take anywhere between 16 and 59 months to be 90% processed. - Scaling timeframes. It would also take further time to scale up the skilled migration to adequately address any skills shortage, noting the competition both within Australia and globally, as many nations develop their own hydrogen industries.
This hypothetical process would most likely delay an already delayed and challenging hydrogen industry that Australia is trying to establish and scale as quickly as possible. The Australian Government needs to prioritise and accelerate hydrogen workforce modelling and work closely across governments and agencies to promptly address any identified challenges and shortages.
Ultimately, the full scope of the hydrogen industry needs to be strongly considered throughout this five year strategy, as the landscape in this industry will fundamentally change in that timeframe, and the scale of federal and state investments demands clarity on how the hydrogen workforce will look, function and need to compete.
Recommendations
- The Australian Government should fund comprehensive hydrogen modelling of the current and forecast hydrogen workforce. This modelling needs to comprehensively cover the full hydrogen value chain within Australia, either in a single or series of work packages with consistent methodologies and inputs, and be flexible to policy changes. This could begin with the NSW Government’s National Hydrogen Strategy work package by extending to the full hydrogen value chain.
- Hydrogen is pivotal to the future energy workforce and must be included in the National Energy Workforce Strategy. This includes how the strategy explores the scale of projected issues and shortages.
- Extend the National Energy Workforce Strategy to include the full hydrogen value chain, including manufacturing.
- The National Energy Workforce Strategy should recognise the comprehensive role of hydrogen by categorising it as a supply of molecules, a demand for electrons, and extended into emerging technologies and ecosystem planning.
- The National Energy Workforce Strategy should map data gaps and plan for future modelling, aligning the exit point and entry point of additional work and retaining consistent assessment to allow continuation and comparison.
If you wish to discuss any element of this in further detail, please contact me at [email protected].
Yours sincerely,
Natasha Cerexhe
Policy Manager
Australian Hydrogen Council
[1] Arup (2023) Powering Up: Seizing Australia’s Hydrogen Opportunity by 2040, National Energy Resources Australia, https://aidc.org.au/wp-content/uploads/2023/04/230331-NERA-Powering-Up-HETS-Study.pdf.
[2] Jobs and Skills Australia (2023) The Clean Energy Generation: Workforce needs for a net zero economy, Australian Government, 3 October, https://www.jobsandskills.gov.au/sites/default/files/2023-10/The%20Clean%20Energy%20Generation_0.pdf, page 176.
[3] Net Zero Australia (2023) Final modelling results, University of Melbourne, University of Queensland, Princeton University, Nous Group, 19 April, https://www.netzeroaustralia.net.au/final-modelling-results/.
[4] Arup (2023) Powering Up: Seizing Australia’s Hydrogen Opportunity by 2040, National Energy Resources Australia, https://aidc.org.au/wp-content/uploads/2023/04/230331-NERA-Powering-Up-HETS-Study.pdf.
[5] Australian Government (2019) Australia’s National Hydrogen Strategy, https://www.dcceew.gov.au/sites/default/files/documents/australias-national-hydrogen-strategy.pdf.
[6] There are various other pathways for addressing a skills shortage, but this has been chosen for illustrative purposes, noting the timelines of existing processes and expected challenges.
[7] Jobs and Skills Australia (2024) Draft Core Skills Occupations List (CSOL) for Consultation, Australian Government, https://www.jobsandskills.gov.au/topics/migration-strategy/draft-core-skills-occupations-list-csol-consultation.
[8] Coates, B. & Wiltshire, T. (2024) Cutting permanent migration may make housing cheaper, but it will definitely make us poorer, Grattan Institute, 11 June, https://grattan.edu.au/news/cutting-permanent-migration-may-make-housing-cheaper-but-it-will-definitely-make-us-poorer/.
[9] Department of Home Affairs (2024) Visa processing times, Australian Government, accessed 29 August 2024, https://immi.homeaffairs.gov.au/visas/getting-a-visa/visa-processing-times/global-visa-processing-times.