Aberdeen's opportunity to lead in energy transition

In the October issue of Aberdeen & Grampian Chamber of Commerce Business Bulletin, Trevor Garlick OBE chair the ONE Energy sector board reflects on the opportunity and challenge ahead to develop a competitive and sustainable oil and gas industry and take the lead in the energy transition.

The combination of the CV19 pandemic, a sharp decline in oil demand and low gas prices have rocked the energy sector and regional economy.

For many businesses and individuals, a brighter future is understandably hard to picture but we must be optimistic. The opportunity and challenge ahead are to develop a competitive and sustainable oil and gas industry and take the lead in the energy transition.

We must ensure that we have a healthy supply chain to maintain our domestic supply of oil and gas as continued production will be essential to meet the UK’s energy demands. Emissions reduction will be key to achieving net-zero operations and the supply chain has a critical role to play. The oil and gas sector also offers deep understanding of the region’s geology and infrastructure, and a digitally enabled oil and gas industry will be a core part of an integrated energy system, alongside wind, hydrogen and CCUS.

We have a quarter of Europe’s offshore wind resources. We can turn wind energy into electricity, convert gas and water into hydrogen, and then into fuel, and use subsurface aquifers in the North Sea to store carbon dioxide. This creates the opportunity for the region to lead on energy transition with the skilled people, infrastructure and innovation to create a world leading, fully integrated net-zero economy.

A pipeline of transition work could help sustain the energy supply chain and secure the workforce against an uncertain backdrop. The offshore wind developments that will be created by Crown Estate Scotland’s ScotWind leasing round should bring opportunities. ScotWind could attract up to £8bn of investment, creating new activity for local businesses in areas such as manufacturing, digitisation and underwater engineering.

To capitalise on these opportunities and transition to net zero, we need world-class facilities. Facilities to support offshore wind assembly and high-value manufacturing, research and testing to accelerate new technologies, and a focus on training and developing people in net-zero skills.

The proposed Energy Transition Zone (ETZ) in Aberdeen, is one of several regional projects identified in the Scottish Government’s £62m Energy Transition Fund and will be the focal point for this crucial activity. It will be an exemplar net-zero environment and forms part of a broader green economic vision for the city and region.

The ETZ will leverage Aberdeen Harbour Board’s £350m investment to create a world-leading facility that will offer combined marine and onshore support. Aberdeen South Harbour will be Scotland’s largest port by berthage, with no tidal restrictions and a laydown area with the capacity for large-scale operations, including the manufacturing, assembly and integration of new offshore renewables infrastructure.

Building on our existing strengths will create long term jobs, skills and training opportunities for local people. The ETZ will include the development of a skills academy to provide training apprenticeships alongside further and higher education opportunities.

With the right investment, we can create a global centre of expertise for energy transition to support emerging and future low carbon energy activity. We can sustain and develop the local energy supply chain and enable it to capitalise on substantial national and international opportunities.

The North-east of Scotland has made a significant contribution to the UK’s energy requirements in the last 50 years. Now is the time for us to also be at the forefront of the energy transition, anchor and grow a dynamic supply chain, and create new opportunities for local people.