Investment of £416 billion ($550 billion) in the UK North Sea energy transition to the mid-century would spring the lock on a market worth £125 billion a year to the UK economy and support upwards of 230,000 new jobs.

This is the conclusion of a cross-sectoral report produced by the Oil & Gas Technology Centre (OGTC) and the Offshore Renewable Energy (ORE).

But, according to the study, which outlines three market scenarios modelled on the UK Committee on Climate Change’s so-called ‘further ambition’ vision, failure to make this “front-loaded” capital spend would risk the country “rapidly becoming a buyer — rather than a supplier — of green energy, green technology and green jobs — leaving huge economic value on the table”.

Trio of scenarios

The three scenarios scoped out in Reimagining a Net Zero North Sea: an integrated energy vision for 2050 are:

Emerging, in which renewable energy plays a growing role in powering the UK, with gas still a “significant contributor” and a “significant requirement” for carbon capture and storage (CCS);
Progressive, where offshore renewables “dominate” the electricity market supported by a blue/green hydrogen mix, with a “major role” for CCS;
Transformational, in which an energy system is developed that is driven by offshore wind and green hydrogen, with oil & gas demand “matched by clean domestic supply”.

“These detailed scenarios paint a picture of what the UK’s offshore energy system could look like by 2050,” said OGTC chief executive Colette Cohen.

“None are definitive, but they highlight the need to drive investment and innovation today.

“There are tremendous opportunities for the UK, but we need strong alignment and urgent action from industry, governments and regulators to realise these benefits.”

ORE Catapult chief executive Andrew Jamieson said: “The UK leads the world in offshore renewable energy and we now have a very real opportunity to capitalise on this and reshape an economy around green energy.

Building on skills base

“Leveraging the innovation, skills, experience and investment of our oil and gas industry is imperative to seizing this moment, to protect and create thousands of jobs and deliver net zero.”

The report found that further fall-out from underinvestment in the UK’s energy transition could come in the form of North Sea energy sector jobs falling “by at least 20% in the coming years” rather than growing 66% to 2050 from today.

“Delivery of a transformation of this magnitude, building on the skills and capabilities already present across the UK energy sector, will not only help deliver the net zero goal but reinvent our nation for a sustainable future — creating a sector with technology, skills, services and an innovative ecosystem which will be a global leader and exporter in the net zero economy,” said ORE Catapult non-executive director Dame Anne Glover and OGTC chair Martin Gilbert, in the introduction to the report.

“There are challenges to delivering this integrated energy vision. This report outlines three possible scenarios … [that] clearly show the size of the potential prize and, importantly, the risks of inaction: the potential loss of jobs; the loss of transferable skills, and the loss of our competitive position globally.

“This is a time for action, for a clear strategy and for cross-sector collaboration.”

Calculus from research outfit Intelstor suggests the global offshore wind fleet could expand 20-fold in the next 15 years to 584 gigawatts as European and Asian market growth goes neck-and-neck but will need to unlock almost $1.5 trillion in finance to underpin this explosive build-out.

(This article first appeared in Upstream's sister renewable energy publication Recharge on 30 November, 2020.)

Energy Transition

UK risks $165bn a year offshore clean-energy market without major frontloaded investment