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1.1 The context of restructuring in the electricity industry

In 1996 the Council of Ministers of the EU adopted Directive 96/92/EC concerning common rules for the internal market for electricity. The main thrust of the Directive was the liberalisation of the sector. Liberalisation has proceeded at a much faster pace than the Directive envisioned with full market opening expected to be achieved by 2009. Whilst during this period of change the European Commission strengthened the public service provision of the Directive, a process of social dialogue also began, involving EURELECTRIC, EPSU and EMCEF that considered developments in health and safety, and the impact of restructuring on employment and equality. Whilst liberalisation has in some cases initiated these changes, and in most cases accelerated them, it is not the only driving factor in the electricity sector (see Section 1.2).

Commentators suggest that, `the process of restructuring, liberalisation and/or privatisation is undeniably most often seen in the context of job losses`. In terms of net job losses, the EU-15 states experienced 246,000 reductions in the sector between 1995-2005 whilst in the New Member States, overall there has been a reduction of 44,000 jobs between 2000-04. The greatest losses occurred in the advanced open markets followed by the open markets. The least net losses to date have occurred in markets experiencing ongoing liberalisation (see below). However, with the recent European Parliament Committee on Energy decision (May 2008) to enforce Member States to break up vertically integrated companies, these figures are likely to change.

The sub-sectors of production, distribution transmission and trading and sales have been differently affected, with most losses occurring in distribution and most gains in trading, and to a lesser degree, production using renewables.

In terms of occupations, overall, there have been reductions in ‘lower skilled’ jobs, plant and machine operators, those working in elementary occupations, middle managers, semiskilled and skilled network operators. These have been mainly achieved through outsourcing, in sales, administration and customer service personnel. Conversely, there have been overall increases in senior management, professional, legal and technical positions, project management staff and those in trading and brokerage. In general, the sector is dominated by medium level educated workers, but there has been a sharp decrease in lower educated workers and a correspondingly sharp increase in highly educated workers.

The case for renewables, the shift from conventional coal, oil and gas fired technologies, is driven in part by the proposed EU Directive on the promotion of the use of energy from renewable sources. The impact of these changes is likely to be an overall increase in higher skilled jobs, especially in the engineering and marketing areas, and a correspondingly overall decrease in lower skilled jobs.