Mention Aberdeen and most people’s minds jump to the word 'oil'. That word association began soon after black gold was discovered beneath the North Sea in 1969.
Now, the Granite City wants to swap its title as 'the oil capital of Europe' for a greener moniker and become a centre for the renewables revolution.
The phrase energy transition is seldom far from the lips of industrialists and politicians in the North East as Scotland navigates its way to net zero carbon emissions by 2045; five years ahead of the target for the UK as a whole.
“The North East is on the cusp of truly transformational change as we work to reposition our region as the net zero energy capital of Europe,” says Maggie McGinlay, chief executive of the company set up to develop the Energy Transition Zone (ETZ) around the new Aberdeen Harbour.
ETZ was launched last April to develop the energy work begun by Opportunity North East (ONE), the body set up by Sir Ian Wood, the former boss of energy services giant Wood Group, to help diversify the region’s economy.
McGinlay describes the £350m south harbour expansion as “a game-changer”, thanks to “its deeper water, non-tidal access, and extensive quayside, providing the capacity to host the energy industry’s largest vessels”.
She expects the enlarged port will help Aberdeenshire’s businesses to win supply chain work for the offshore wind farms that will be erected as part of the recently-announced ScotWind licensing round.
Other proposals for Aberdeen’s seafront include a stadium for the Dons, the city’s illustrious football club, an amphitheatre, a pier and an upgrade for the famous beach ballroom. The plans are part of the city council’s wider £150m scheme, which includes pedestrianising the central part of Union Street and redeveloping the city market.
“These projects are truly transformative for the city centre and the beach area and show the depth and breadth of our ambition,” said council leader Jenny Laing after the council’s growth and resources committee backed the scheme in November.
“These plans are only the beginning of a process that we envisage will turn Aberdeen into a city that not only residents of the North East, but indeed the whole of Scotland, will be proud of.”
Hydrogen is another plank in the region’s energy strategy — excess renewable electricity can be used to split water into hydrogen and oxygen, with the hydrogen becoming a potential fuel for heavy transport, including aircraft, ferries and trains.
McGinlay says energy giant BP’s joint venture with Aberdeen City Council to create a hydrogen hub, which was announced last autumn, could create up to 500 jobs.
The only apparent fly in the ointment is the UK Government’s decision not to include Aberdeenshire’s carbon capture and storage project as part of its first wave of demonstration sites, which will take carbon dioxide captured from factories and power stations and pump it into empty oil and gas wells beneath the seabed.
“The geology off the North East coast provides world-class sites for large-scale carbon dioxide storage,” McGinlay said.
“This is clearly a very hot topic just now and - despite the disappointing decision not to have Storegga’s Acorn [project] as a track one contractor - it was clearly a first-class bid and ETZ is heavily involved with a range of partners, including Oil & Gas UK (OGUK) and the Scottish Chambers of Commerce, to encourage the UK Government to reconsider,” she continued, adding: “Regardless, we are sure this will still go ahead and that is very important to the regional ambition.”
McGinlay points to a study by the Energy Technologies Institute and Robert Gordon University that found 90% of current jobs in oil and gas are transferable to renewables.
ETZ runs several programmes to help businesses tap into the transition, with more than 40 companies - including Aubin, Optimus, and Whittaker - completing its Fit 4 Offshore Renewables scheme, which features guidance from the Offshore Renewable Energy Catapult.
ETZ is working with ScottishPower on its National Energy Skills Accelerator, which aims to help individuals and companies identify and develop the skills they need for the transition.
Meanwhile, 19 oil and gas operators - including Harbour Energy, Serica, Shell, TAQA, and Total - are involved with its greenhouse gas emissions reduction programme, through which the entire supply chain aims to cut its carbon.
“One of the key reasons the North East is such an attractive location for the development of low-carbon technologies is because we can draw upon an existing highly skilled workforce and the biggest concentration of energy supply chain companies in the UK,” McGinlay added.
“We must utilise long-established connections across the globe, share knowledge and expertise, create incubation and collaboration spaces that deliver the skills that ensure long-term sustainable employment.”
Doug Crawford, a corporate partner in law firm Brodies’ Aberdeen office, pointed out: “Those businesses that are just waking up to transition are behind the curve and may struggle to find investors or buyers willing to engage with them.
“With oil and gas projected to still play a key role for many years to come, current investor sentiment against hydrocarbon-focused businesses is premature, but nevertheless real and, for now, many North East-based businesses looking to attract investment or buyers will have to demonstrate robust energy transition plans and credentials.”
In tandem with switching from oil and gas to renewables, the region is also capitalising on North Sea decommissioning.
Trade body OGUK’s 2021 Decommissioning Insights report estimated that £16.6bn will be spent on removing oil and gas rigs, pipes and other equipment from UK waters during the coming decade.
“The oil and gas industry has invested hundreds of billions of pounds in offshore and onshore platforms, pipelines and infrastructure over the past 50 years with the purpose of recovering oil and gas from the UK continental shelf,” explains OGUK sustainability director Mike Tholen. “As fields are depleted, this will typically be decommissioned and removed.
“However, before doing so, companies will always check to see if the assets can be repurposed or reused, particularly with opportunities such as carbon capture in mind.
“There is also a regulatory requirement to do so, [with] which the Oil & Gas Authority has oversight,” he added. “The process of considering reuse starts at least six years before decommissioning and can lead, for instance, to pipelines being preserved for later re-use.”
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