A dip in network infrastructure procurement has the potential for serious ramifications in the industry skills base says Alastair Dawson.
It is an uncertain time for the electricity networks sector as companies try to get to grips with regulatory changes and the agenda set by the new Government.
"As investment has slowed, many in our sector, whilst wanting to plan for the future and investing in their workforce, are instead focused on handling reduced revenue."
For those of us at the coalface of upgrading the electricity networks, our market is feeling the pinch as uncertainty results in a dip in infrastructure procurement. At Omexom, we are flexible to our customer’s needs but we are also concerned that the UK builds and retains the skills for the future. Increased infrastructure spending will be required later in this regulatory period and beyond to help reach climate goals and keep the lights on. Our sector needs to be careful to ensure we have the capacity to deliver.
Right now, the RIIO framework, designed to deliver stability to protect consumers and businesses alike is taking longer to bed-in than anticipated. As investment has slowed, many in our sector, whilst wanting to plan for the future and investing in their workforce, are instead focused on handling reduced revenue.
At Omexom – part of the VINCI Energies Group – we are confident about our future. The innovative way our company is structured, as a network of business units, allows us to flex with the market and draw on the global expertise and skilled workforce of our international network. VINCI Energies UK & RoI invests in both apprenticeship and graduate programmes.
"Ofgem and the Government need to monitor carefully, with industry, the impact of RIIO on the skills base."
However, from speaking with others across the industry, I believe the current uncertainty means that, unless something changes, our sector as a whole is on a pathway to contraction. Reduced training of future UK expertise will be a clear knock-on impact. Skilled workers will leave companies and probably move to other sectors. There is a real prospect that when investment picks up again, even within the current price control period, the UK may need to look abroad for the skills required to deliver a network that meets our needs.
Businesses understand that revenue can go down as well as up. However, I believe we all need to be concerned if a much reduced pipeline of investment is having long term consequences for the UK’s power engineering skills base. Keeping consumer bills affordable is important but this unintentional skills erosion could actually increase long term costs.
So what’s to be done?
Firstly, I believe Ofgem and the Government need to monitor carefully, with industry, the impact of RIIO on the skills base. If necessary, actions to develop a more stable investment pipeline should be considered so we can avoid a long term skills shortage. This will not only cement the UK’s position at the forefront of network engineering but help meet the Government’s goal of keeping bills down. The RIIO T1 mid-period review, announced recently by Ofgem, is a critical opportunity.
Secondly, the stability of the market is something that Distribution Network Operators and Transmission Network Operators could themselves consider in prioritising their procurement pipeline. If they need Ofgem support to coordinate this, it should be given.
In recent years, our sector has made great strides in building a skilled workforce and the pipeline of specialist engineers, technicians and project managers we know we will need. The transition to electric vehicles, low carbon heat, increasing storage and decentralised networks will only increase the demand for these skills further. We at Omexom want to help ensure that the UK workforce is trained and able to deliver on our country’s long-term ambition. Alastair Dawson, Managing Director, Omexom UK & RoI