Jobs, skills and regional implications of the low carbon residential heat transition in the UK

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Calvillo, Christian F. and Katris, Antonios and Zhou, Long and Turner, Karen (2025) Jobs, skills and regional implications of the low carbon residential heat transition in the UK. Energy Policy, 202. 114579. ISSN 1873-6777 (https://doi.org/10.1016/j.enpol.2025.114579)

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Abstract

This paper investigates the regional employment implications of the projected UK heat pump rollout, emphasizing the availability of a skilled workforce as a crucial enabler. The UK labour market, however, faces persistent worker and skills shortages, posing delivery and cost challenges and triggering wage-cost pressures that could displace employment across the economy. This highlights an urgent policy need to understand not only the level, type, quality, and regional location of labour demand but also the drivers and potential mitigation strategies. Using regional economic and workforce data, we map results from our dynamic economy-wide Computable General Equilibrium (CGE) model to provide new insights into the spatial distributional impacts of the UK heat pump rollout. Our findings indicate that net job creation is outpaced by real income gains, primarily driven by construction and manufacturing activities. Some regions exhibit lower relative job creation, partly due to rising labour costs affecting wage- and labour-intensive industries (e.g., finance, hospitality). Where energy efficiency gains from heat pump use translate to energy bill savings, the resulting boost to household spending power can help offset negative job impacts in consumer-facing sectors and host regions. This novel integrated analysis makes a significant contribution by developing urgently needed, robust, and detailed evidence based on a strengthened understanding of the low-carbon heat labour and skills demands, while also considering critical factors such as labour mobility and competition. The produced insight and the proposed approach has the potential to be applicable to analyse other energy transitions.

ORCID iDs

Calvillo, Christian F. ORCID logoORCID: https://orcid.org/0000-0002-5495-6601, Katris, Antonios ORCID logoORCID: https://orcid.org/0000-0001-9352-2307, Zhou, Long and Turner, Karen;
CORE (COnnecting REpositories)