Energy Transition: There’s No Turning Back
The emergence of the coronavirus pandemic earlier this year understandably shifted the priorities of governments across the world.
The sudden and devastating effect on the global economy meant the climate change emergency was pushed further down the list.
However, it has also been recognised that the ‘green agenda’ has a key role to play at the centre of the economic recovery from the pandemic.
We recently hosted a virtual roundtable with clients and leaders from the oil & gas sector to discuss the impact of the coronavirus pandemic on the energy transition, and what areas need to be focussed upon to help industry and the nation achieve our net zero targets.
You can find the key takeaways from the event below:
There’s a desire to deliver net zero
The effects of the pandemic have largely put businesses into survival mode, which is unsurprising in the current economic situation, however there remains an understanding that working towards net zero will remain on the agenda.
The majority of operators are looking at energy transition in a constructive way and how they can make a positive contribution to tackling climate change, particularly in reaching net zero.
Although there is a clear a difference between what this means for operators and service sector organisations and what their individual opportunities are, there was a strong feeling that collaboration, clear policy and joined up thinking in the right places are all required.
Companies cannot suddenly make major changes overnight and knee-jerk solutions are likely to create more issues than they solve.
There is an appetite to provide finance
Whether it’s from institutional lenders or those looking to invest private capital, it’s clear that there is a strong interest in seeking out opportunities to put money into projects and technologies that will help deliver on net zero.
Finance needs to be targeted in the right place and it appears that there is still a degree of analysis going on as to what that is, as there is still ongoing development in areas that it is known will be attractive – e.g. platform electrification, CCUS and hydrogen.
It’s also clear that ESG and CSR are particularly important to private equity backers and will be a key driver in future investment decisions.
CCUS and hydrogen will be key
There is a sense that, for the oil and gas sector, CCUS and hydrogen are where critical mass is going to be needed – areas where the sector will play best, given its knowledge, expertise and skillset.
Looking at CCUS, it is clear that the regulation and structure in relation to the development of carbon capture and storage in the UK is lagging behind other areas (e.g. Norway).
There is a real feeling that the Government need to take this by the scruff of the neck and make sure policy, regulation and structure are developed to allow the industry to move forward.
There is a danger that the UK gets left behind other jurisdictions who develop their industry first and, therefore, have the skills, expertise and resource to be leaders in carbon capture and storage.
It is also expected that, in carbon capture and storage, for example, the process, regulation, etc will likely be aligned with how the oil and gas sector currently operates (another reason it is expected to be attractive).
An opportunity for Aberdeen
Aberdeen and the north east of Scotland has been working in the energy transition space for many years.
- the pioneering Hydrogen Bus Project
- the establishment of the Oil & Gas Technology Centre
- the European Offshore Wind Deployment Centre (a.k.a. the Aberdeen Offshore Wind Farm).
These developments have positioned the region to capitalise on net zero opportunities and investment continues with Project Acorn at St Fergus, the Aberdeen South Harbour expansion, which includes the establishment of an Energy Transition Zone, the upcoming ScotWind leasing round and the Aberdeen Hydrogen Development Programme.
In the last six months, Aberdeen City Council has published its Net Zero Vision for Aberdeen to become a climate positive city and lead in the support of the global energy transition. Its Net Zero Vision and Infrastructure Plan will help to deliver upon this.
It is clear that the energy transition is critical to the growth and economic recovery of Aberdeen and there is a solid plan on how to get there.
We continue to engage with our clients on the energy transition and would welcome you joining the conversation.
If you would like to get involved and attend one of our future roundtable sessions please get in touch.
20th November 2020
The Prime Minister announced the UK Government’s ten-point plan for a “Green Industrial Revolution”.
16th November 2020
Energy Voice have launched the Energy Transition Idea Exchange, taking place on 19 November.
11th November 2020
Neil Bruce showcases some of our clean energy highlights since lockdown.