Energy | ONE

The focus for the energy industry in the north east is twofold: it has a significant role in meeting the UK and Scotland’s net zero targets and maximising the economic recovery of the UK’s sovereign oil and gas resources.

The oil and gas sector continues to be a strategically important UK industry. The UK Government has announced its intention to develop transformational sector deal with the industry. Given the industrial challenge, there will be a significant regional place element to this; OGUK is leading this.

Decommissioning represents around 10% of the total UKCS expenditure with a stable forecast of £15.2 billion forecast expenditure over the next decade, 28% of the global total, 45% on wells and the industry halfway towards the goal to reduce costs by 35% by 2022 (OGUK 2019 Decommissioning Insight).

Opportunities for energy supply chain companies to diversify into low carbon industries continues with the March 2019 Offshore Wind sector deal pointing to the expansion of current offshore wind development from 8.5 GW in mid-2019 to a subsidy-free level of 30 GW by 2030. Offshore wind capacity in Scotland is currently around 0.95 GW with over 4.0 GW presently consented and the overall Scottish offshore wind market expected to rise to 10 - 12 GW by 2030.

On behalf of the industry, OGUK has developed Roadmap 2035 as a progression of Vision 2035, an industry “blueprint for net-zero”. The Roadmap outlines steps to help meet 50% of UK’s energy needs, grow the economy and exports, develop people and skills, create £10 billion through driving technology and innovation, and support the net zero by 2050 target with a significant focus on offshore emissions reduction. The region aims to secure a strong economic future built on offshore wind, hydrogen, carbon capture usage and storage (CCUS) alongside oil and gas.

The region will maximise its economic opportunity through energy production and the diversification and internationalisation of the energy supply chain. The goal is to anchor the high-value energy supply chain in the north east of Scotland for the long term, double the value of energy supply chain exports and make a major contribution to net zero targets. It will build on world-class energy expertise, capacity and infrastructure and work directly with the supply chain on decommissioning, internationalisation and diversification.

The UK Government and Scottish Governments have set legally binding goals to achieve net-zero carbon emissions by 2050 and 2045, respectively. Energy companies have set out their net-zero position. The wider industry and supply chain, through industry-body OGUK, has published its Roadmap 2035 plan to meet energy demand and provide large-scale industry solutions to help deliver net zero.

Having played a major role in oil and gas over the last 50 years, the north east of Scotland has the experience, expertise and capability to deliver large and complex projects and lead the UK’s transition to an integrated, modern day energy system.