Net zero plan pushes Wood Group green projects to $1bn

THE global race to slash carbon emissions to net zero has lifted the value of Wood Group’s green projects to more than $1bn (£730m).

The FTSE 250 engineering business said its pipeline for hydrogen and carbon capture and storage (CCS) projects had been strengthened by the political focus on cutting emissions.

Robin Watson, chief executive, said: “If you had asked me a year ago, the pipeline for hydrogen and CCS was not at the billion-dollar level, that has grown exponentially with the pandemic as the pace of the energy transition has accelerated. And these are real tangible projects.”

Mr Watson said the pandemic had made “people and policymakers look at the world differently”.

He added: “It cut off demand for energy and I think it meant a lot of people questioned if we were living sustainably. There has been a psychological shift.”

That shift means projects that were just studies 18 months ago have now become large-scale operations coming on to the market. In the last year alone, Wood has won more than 30 hydrogen projects and 20 CCS projects globally.

That partly explains why Wood’s order book, an important gauge of future growth, increased by 18pc to $7.7bn in the six months to the end of June, with Mr Watson highlighting renewable energy projects such as solar, wind, CCS and hydrogen as the driving force behind this increase.

He also said he expected the company to return to growth in the second half of the year. The forecast will come as a relief to investors, who have seen

‘I think it meant people questioned if we were living sustainably. There has been a psychological shift’

the value of their shares slump by nearly half since the start of the pandemic.

It has been a tough year and a half for Wood, which still generates much of its business from the oil and gas sector, an industry squeezed by the pandemic as demand for energy shrank.

In the year to the end of June, sales fell by nearly a quarter to $3.15bn as projects and investment decisions were delayed, leaving the company with an $11m loss.

Over the past six years Wood has repositioned itself to focus more on renewable energy projects, where it believes future growth will come from.