Scotland’s opportunity to realise the full potential of the energy transition

By Jenny Stanning, External Relations Director, OEUK

OEUK is the leading trade body for the UK’S integrated offshore energies industry. Our membership includes over 400 businesses and organisaons with an interest in offshore oil, gas, wind, hydrogen and carbon capture and storage. Working together with our members, we are a driving force for offshore energy, supporng Scotland in meeng its net zero ambions while ensuring security of energy supply.

Scotland can be proud of its great heritage and central role in this evolving industry – with the most recent snapshot showing the oil and gas sector supports 90,000 jobs in Scotland of 214,000 across the UK and generates £16bn in addi onal value in economies right across the country. Over the life me of the basin, the sector has paid over £400bn in produc on tax to HM Treasury and, in 22/23 alone, the sector will pay £8bn in corpora on tax and a further £7bn in the first 12 months of the energy profit levy.

Of course, the industry is much more than a spreadsheet and it should always be remembered that – through economic, poli cal and pandemic turmoil – thousands of workers living offshore across the North Sea, and many thousands more suppor ng them onshore, powered our lives, supplying nearly half the na on’s gas, plus oil equivalent to more than 80% of the UK’S needs.

Back in 2019, we were one of the first industrial sectors to throw our weight behind net zero and publish our long-term plans for ge ng there. However, as we race to reach net zero by 2045 in Scotland, we must remember that – for the me being – the resources of the North Sea remain cri cal to mee ng our energy needs.

While much of the public debate focuses on electricity produc on, this accounts for only 22% of our total energy use. Domes c use (mainly hea ng) and transport remain our largest energy consump on sources (29% and 33%, respec vely). Transport is almost en rely fuelled by oil products (94%), and more than 80% of UK homes rely on gas for hea ng.

Energy and Innova on

While oil and gas will remain part of our energy mix for some years to come, the offshore energy industry is driving innova on to build the low-carbon energy infrastructure for the UK’S future. This includes technologies as diverse as floa ng wind turbines, facili es for the mass produc on of hydrogen and systems for capturing waste CO2 and then burying it, securely, deep under the seabed in empty oil and gas wells. Our most recent Economic Report found that the UK has the capacity to permanently store 78 billion metric tons of CO2 – roughly equivalent to two centuries of UK emissions.

And we can see this transi on to new energies happening now. Almost 44% of Scotwind capacity (60% of floa ng wind capacity) is backed by companies that would tradi onally have been viewed as oil and gas businesses. This is an example of energy integra on in ac on and demonstrates how the transfer of skills, capabili es and capital from the oil and gas sector will be a central part of the growth in offshore wind capacity.

As Scotland becomes home to a new genera on of offshore power genera on, we are working hard to support our supply chain organisa ons to move into this ever-expanding sector – helping them to innovate, win contracts, create new employment and export their products and exper se around the world. So far, the Offshore Wind Growth Partnership ini a ve has supported over 130 projects through funding of almost £13m, with the inten on of inves ng up to £250m. And in February OEUK is proud to bring back Share Fair to Aberdeen – an event that showcases upcoming opportuni es to supply chain companies, allowing operators and energy investors to increase their awareness of the exper se, innova ve products and specialised services offered by suppliers across the UK.

Scotland now has an opportunity to realise the full poten al of the energy transi on and truly reap the rewards of our industrial heritage and experience. To support this we need an integrated energy strategy that recognises our current and future needs, provides clarity for the industry and puts skills and communi es at its heart, so that together we can realise our shared ambi on of delivering net zero.