Supply Chain

This study examines the timing and scale of a hydrogen energy industry buildout – modeled to support an economy-wide net-zero pathway – and evaluates whether the U.S. construction sector has sufficient skilled craft labor to deliver that buildout in the presence of competing industrial and infrastructure construction.

The skilled craft workforce has faced a widely reported decline in both numbers and skill levels, affecting projects in planning and execution. While some of this is a lingering, structural issue, much of it is cyclical, tied to large swings in economic activity. These cycles force workers out of the industry, often into other fields, where their under-utilized craft skills deteriorate – sometimes permanently. The report focuses on 19 specific skilled craft worker disciplines essential to hydrogen and other construction projects, assessing current capacity and long-term gaps.

Over the next decade, a surge in public infrastructure, industrial, and hydrogen-related projects – some driven by federal legislation – could keep demand for construction labor high. This could create delays in starting and completing projects, even as it sustains well-paying jobs. Hydrogen-related labor needs are expected to persist through 2050, though near-term demand is likely to be dominated by other large federally supported projects to rebuild infrastructure, reshore manufacturing, and expand renewable energy. Labor demand estimates for hydrogen projects are based on project schedules, while broader construction needs from 2030 to 2050 reflect econometric projections for other sectors.

While the federal Occupational Employment and Wage Surveys show only modest wage increases tied to labor demand, this likely underreports real market changes due to infrequent data collection and industry fragmentation. In practice, owners and skilled craft workers respond quickly to changing conditions, adjusting schedules, negotiating higher wages, and reallocating labor to meet urgent needs.

The study finds that even before hydrogen-related projects ramp up, the U.S. construction workforce lacks sufficient craft labor supply to meet overall project demand. This shortfall poses a systemic challenge affecting all construction sectors, including hydrogen. Greater cooperation between owners and contractors will be critical for training, reskilling, and retaining skilled craft workers – particularly to replace aging workers and prepare new entrants for technically demanding roles.

This visual synopsis summarizes the key insights from the full report Outlooks to Foundations: Construction Craft Labor Risks and Workforce Solutions for the Energy Transition – A Hydrogen Case Study (3002034766). The report assesses the U.S. construction industry’s ability to meet skilled craft labor demand through 2050 for hydrogen and large industrial and infrastructure (I&I) projects, while characterizing associated wage impacts and labor supply elasticities.

• Peak Demand Timing
• Structural Labor Shortages
• Tight Markets, Uneven Impacts
• Limited Wage Responsiveness
• Opportunities for Action

As the energy system transforms and clean energy technologies are deployed at increasing levels, there will be an increased demand for the critical minerals needed to manufacture those technologies. As the industry responds to these shifts in demand, it is likely that there will be near-term supply and demand fluctuations in the market for some of the minerals that will see the largest increases in demand. This could result in short-term price spikes and possible project delays as production is ramped up to meet demand. Long-term shortage in material availability or resource scarcity is unlikely.

In 2020, the COVID-19 pandemic disrupted populations across the globe, as governments struggled to manage the epidemic and its effects on public health, business, and society. Supply chain disruptions due to the pandemic were widespread. Companies were confronted with a multi-month transient period of extreme labor shortages, raw material, and supply shortages, and delays in transportation and manufacturing. Although some shortages in this transient period were finite, others resulted in lasting effects that are still present in business today. Economists predict that supply chain challenges will persist for the foreseeable future, necessitating a “great supply chain reset” in order for businesses to manage their products effectively. This paper describes supply chain challenges for the high-voltage power grid, including substation, transmission, and distribution networks, that persist in a post-pandemic era, and potential mitigation strategies for power companies.

As the energy industry continues to decarbonize generation and support economy-wide decarbonization, demand is increasing markedly for clean energy technologies that enable a reliable and affordable transition. At the same time, the industry must keep existing assets operating reliably and efficiently. Maintaining the existing system while expanding clean energy technology deployment requires a robust supply chain to provide components and equipment in a safe, reliable, and environmentally responsible manner.

EPRI conducts a wide range of supply chain-related research across the Institute, ranging from high-level overviews of current and future supply chain challenges and opportunities to detailed assessments and demonstrations of specific components. This paper highlights several of the recent, ongoing, and planned research projects focused on aspects of the supply chain for energy systems.

As the electric industry continues to decarbonize generation and support economy-wide decarbonization, demand will increase markedly for key clean energy technologies that enable a reliable and affordable transition. EPRI’s recent report, Strategies and Actions for Achieving a 50% Reduction in U.S. Greenhouse Gas Emissions by 2030, projects the accelerated deployment pace of clean energy technologies that could enable 2030 U.S. decarbonization goals. In addition to the deployment of clean energy generation technologies, deployment of battery electric vehicles is expected to accelerate significantly to achieve decarbonization goals.

To support this rapid growth in demand for clean energy technologies, material and manufacturing supply chains may need to be expanded significantly and transportation challenges overcome. Stresses and bottlenecks could emerge at various points of the supply chain. It is important to identify areas of potential risk and deploy research and resources to overcome and enable the market transformations required to support rapid and sustained growth.

This study addresses the following questions:

• What is the current state of the material supply chain and manufacturing capacity?
• What process or material/equipment availability bottlenecks pose risks to meeting accelerated deployment projections and targets?
• What steps could be taken to reduce or eliminate those risks?

This white paper focuses on the supply chain for wind, solar PV, and lithium ion batteries due to widespread expectations of significant near-term deployment in the United States and globally. It also examines the impact of electric vehicle deployment to the extent that it may impact demand for key minerals and lithium ion battery manufacturing.

This report examines the craft-level professional skills required to support the U.S. energy transition, providing an initial look at some of the electric sector craft labor demand implied by a 50% reduction in economy-wide greenhouse gas emissions by 2030. The study starts by developing a regional characterization of the current state of the skilled workforce versus current demands. It then explores potential electric sector workforce gaps implied by rapid decarbonization of the power generation sector and accelerated economy-wide electrification. This report identifies potential strategies and policies the construction industry and electric companies could consider to help ensure that an adequately sized and skilled workforce is available to support interim decarbonization goals.