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NEWS ‘COST OF OPERATING’ CHALLENGES IMPACT WORKFORCE
orten Wierod, President of ABB Electrification, explores the additional pressure that fluctuating energy costs are putting on businesses worldwide. Rising inflation and energy costs and security have been at the forefront of the global news agenda during the past year. While much has been written about ‘cost of living’ concerns for consumers and society, less has been highlighted about the ‘cost of operating’ challenges businesses are facing, including the potential knock-on effects on the manufacturing workforce.
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It’s no secret that the manufacturing and engineering sectors are already facing a huge skills shortage around the world. In Europe, engineering workers are among the four most in demand occupation groups, with Italian electrical engineering graduates likely to receive up to 22 job offers when they leave education, according to the Politecnico di Milano, the largest technical university in Italy. Narrowing down the picture to the UK, a recent report by Search Consultancy found that 85 percent of businesses in the engineering and manufacturing industry are feeling the strain from a lack of skilled workers. Meanwhile, research by the Institution of Engineering and Technology (IET) revealed that 71 percent of the UK engineering workforce, who are experiencing internal skills gaps, say it is down to missing engineering or technical skills.
Compounding this situation, an aging workforce means experienced workers are retiring faster than new workers entering the industry. According to a government study, 186,000 skilled engineers are needed annually until 2024 to plug the skills gap, but almost 20 percent of the current workforce is due to retire by 2026. These older workers take valuable knowledge and skills with them. New research by ABB Electrification suggests that there is now a new factor in that equation. Our Energy Insights survey of 2,300
leaders from small and large businesses across a range of sectors, revealed that 92
percent of respondents feel that the continuing instability of energy is threatening their profitability and competitiveness. Not only is this leading to reduced investment in innovation and new technologies, but
businesses have also reduced investment in their workforces in the last year because of increased energy costs.
If energy cost challenges persist, this trend is expected to continue over the next three to five years, with three of the top five business areas highlighted for budget reductions related to the workforce. 42 percent will spend less on recruitment; 38 percent will decrease spending on salaries, overtime and bonuses; and 37 percent will reduce investment in staff training and development.
This is a worrying situation at a time when industry needs engineering skills to deliver carbon reduction targets. More generally, innovative robotics and automation solutions are becoming increasingly widespread as manufacturers look to develop the sustainable operating and production models required to accelerate the green transition. At ABB, we are actively collaborating with partners and customers to invest in the digitally skilled people needed to build the sustainable manufacturing sector of the future. On the education side of the equation, we are engaging with students and education providers on many different levels from arranging company visits and running early talent programs such as the ABB Discovery program, to supporting scholarships and providing experts to teach university courses.
Digital education tools can also support training initiatives. For example, we have developed a virtual reality program to offer 3D immersive training, allowing engineers to learn without being exposed to the risks sometimes associated with medium-voltage power. It’s also important to remember that addressing energy challenges does not have to mean sacrificing investment in people. Rather, we need to move more quickly on supply and demand, and harness technology tools and new ways of working to optimise energy across the value chain.
The good news is that much of the support and technology that can help manufacturing businesses – large or small – to optimise their energy management and reduce costs, is already widely available and at a reasonable cost. Supporting them in the take-up of proven technologies in energy management, efficiency and renewable energy generation and storage will not only help to insulate them from the impacts of fluctuating energy costs and security concerns; it will also support the green energy transition.
Reduced energy costs and increased energy reliability should in turn alleviate cost pressures and help harness the talent needed to drive the energy transition forward.
campaign.abb.com/energy-insights- report-2023
THE RACE IS ON TO OVERCOME ENERGY DEMAND AND SUPPLY DISRUPTIONS
With supply instability and grid shortfalls continuing to prove challenges to European manufacturers, a new report is highlighting solutions to navigate an uncertain energy market, alleviate regulatory pressures and avoid downtime from resilience issues. According to the ‘Race to Resilience’ report from Aggreko, manufacturers’ energy supply is in a precarious position and potential site blackouts, connection delays and rising grid fees are compounding these troubles. As relief packages for businesses’ energy bills across Europe finish in 2024 and uncertainty surrounding the grid’s future capacity for renewables continues, the sector is tackling both short-term volatility and long-term insecurity.
From this, the report explores how facilities can secure enough power both now, and in the future, highlighting a revised approach to
6 JUNE 2023 | PROCESS & CONTROL
decentralised energy as the route capable of improving security of supply, reducing transmission losses and lowering carbon emissions.
Chris Rason, Managing Director, Aggreko Energy Services, said: “European manufacturers’ energy supply instability has made clear the need to devolve energy models away from the grid. And while most sites will have some form of power generation, new impetus on protecting critical processes and improving on-site efficiency is needed to tackle the sectors energy struggles.
“Aggreko’s Race to Resilience report therefore aims to bridge the gap between today’s manufacturing challenges of exponential energy demand and supply disruptions, with tomorrow’s objectives of security and sustainability.”
The report gives prominence to microgrids, gas-powered generators, combined heat and power, and energy storage as bridging solutions. One scenario, highlighted in the report, is a facility which needed greener on-site generation while waiting for a grid connection. In response, Aggreko provided 1.43Mwe over 26 weeks via a natural gas set with 400/11kV transformer, gas booster system and purpose-built extended exhaust flue – allowing the site to continue production.
To give decision-makers a starting point when identifying such models, the report highlights a series of calculators developed by Aggreko – Hire Vs Buy, Grid Compare and Greener Upgrades calculators.
www.aggreko.com/en-
gb/resources/industry-report-race-to- resilience
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