There’s always an element of luck involved when working out the best time to launch a new report.
In supporting Robert Gordon University’s latest research, ‘Delivering our Energy Future’, the plan was to release the findings ahead of the UK General Election – we just didn’t know it would be the day before the Prime Minister made the call to go to the polls in July.
The report shows that the UK will fail to achieve a ‘just and fair’ transition by 2030 unless there is urgent alignment across the political spectrum to sustain UK offshore energy industry jobs, supply chain investments and the economic contribution of the workforce.
RGU analysed over 6,560 pathways for the UK offshore energy industry between now and 2030. The report concludes that UK and Scottish political decisions, rather than energy market economics, will determine the size of the workforce and supply chain, which makes the forthcoming election so important for the energy industry.
In its industry manifesto, OEUK states that by choosing a homegrown energy transition, “we can protect skills, secure investment and maximise sustainability”. This was echoed at our BIG breakfast event in Aberdeen last week, which featured representatives from operators, developers, investors and the supply chain.
There was considerable frustration around the table that the North Sea windfall tax, imposed by the Conservative government in response to the profits the oil and gas sector made during 2022’s energy crisis, remains in place, even though there are no longer windfall profits.
The Energy Profits Levy, as it is otherwise known, is to remain in place until 31 March 2029 and the Labour Party has announced plans to increase the windfall tax from 35% to 38% and extend it by a further year.
The SNP’s Westminster leader Stephen Flynn recently said that the windfall tax had been the “right thing to do” but proposals to increase the burden would stymie investment threatening jobs now and in the future. This was echoed last week by new First Minister John Swinney who said the tax had “gone too far”.
This year alone, several North Sea players have announced jobs cuts, blaming the windfall tax.
The fear amongst the guests at our roundtable was that the UK’s ‘energy resilience’ was under threat. Although the north east of Scotland is particularly affected, it was stressed that this is very much a national issue. Continued uncertainty is affecting investment, making domestic energy less competitive and increasing the UK’s exposure to costly imports.
The UK has a legally binding agreement to reach net zero by 2050 (2045 in Scotland) and the default line for politicians is that this very much remains the target. Fresh from the pandemic and the cost-of-living crisis, it is understandable that politicians are seeing net zero as an issue that can be addressed further down the line.
The UK became the first major economy in the world to halve its emissions between 1990 and 2022, which is a major accomplishment. However, what the RGU model highlights is that without pulling the right levers in the next five years, our hopes of achieving the mid-century ambitions in a ‘just and fair way’ hang by a thread.
What is required is a more joined up approach between industry and government. Our event showed that industry is chomping at the bit to engage with political parties of all colours and demonstrate the real impact of recent political decisions on workers.
The North Sea has the potential to be repurposed as a world-class, multi-energy basin. Only grown-up discussions can ensure that this ambition becomes a reality.
Back to blog