A £62 MILLION Scottish Government support package unveiled to help oil and gas firms make a green recovery from the Covid-19 crisis has been welcomed.
The cash, focussed on north-east Scotland, is being made available over the next five years to help the industry deal with the “dual economic impacts” of the pandemic and crash in oil prices.
The Energy Transition Fund will support firms in diversifying towards net zero and help attract private sector investment into the north-east.
Major net zero projects will be “considered” for funding, such as Global Underwater Hub, previously pitched as part of an oil and gas sector deal, the Acorn Carbon Capture and Storage (CCS) project near Peterhead and an Energy Transition Zone (ETZ) in Aberdeen.
Sir Ian Wood KT GBE, Opportunity North East chair, welcomed the announcement calling it “the first step” in evolving the ETZ from a concept to a live project.
He said: “Earlier this year, ONE set out the ambition to help create a world leading Energy Transition Zone (ETZ) in partnership with Aberdeen City Council, Aberdeen Harbour Board and Scottish Enterprise.
“The Zone will create a place to attract and develop green energy related R&D, innovation, manufacturing, testing, demonstration and services, and the business and skills needed to support energy transition activities.
“We now have the exciting challenge of helping develop a carbon free economy to meet Scottish and UK Government net zero targets by 2045 and 2050.
“This will require leveraging on our existing on and offshore infrastructure, technology and skills, and diversifying our global supply chain to ensure the north east of Scotland continues to play an important role in the UK’s energy future, albeit this time with the environmentally positive on and offshore wind, hydrogen and carbon capture and storage.”
The Scottish Government said the investment “underpins” Aberdeen’s ambition to become a world-leader in the net zero transition, which Scotland is aiming for by 2045.
Colette Cohen OBE, Oil & Gas Technology Centre (OGTC) chief executive officer, commented: “The OGTC created the Net Zero Solution Centre in 2019 and in partnership with industry, has created a programme of projects focused on job creation, development of manufacturing capability and delivery of a net zero future for the North Sea.
“This new fund will play a critical role in accelerating the delivery of those projects, driving a green recovery and positioning position the North East of Scotland to play a pivotal role in accelerating the energy transition.
“Commitment like this from government is essential to accelerate the delivery of technology for a net zero future. It’s great to see this kind of leadership at a time when industry needs clear support to transition to a new and exciting future.
“We look forward to working with industry and government to deliver these exciting programmes and make sure the North East of Scotland continues to be a leader in technology and innovation for the net zero economy.”
Trevor Garlick, Global Underwater Hub and ONE Energy chair, said: “The multi-sector Hub will help UK companies win more business overseas, attract inward investment and develop the skills and technologies needed to increase our share – currently £8 billion – of a growing global market with a gross annual spend expected to reach c.£100 billion by 2035.
“It will play a significant role in furthering Scotland’s and the UK’s net zero ambitions, connecting companies, universities and R&D institutions across the UK to leverage the collective strength of the UK’s underwater industries – from offshore renewables and oil and gas, to marine science and defence.
“We look forward to continuing to work closely with underwater engineering and technology companies, Subsea UK and other trade associations, governments, academia and regional development agencies to deliver this exciting project.”
Neil Gordon, Subsea UK chief executive, said: “We welcome the funding from the Scottish Government who have been supportive of the proposition for the Global Underwater Hub and the subsea industry in general.
“The worldwide underwater engineering market is expected to grow significantly – annual global spend could be as much as £140 billion by 2035. The UK has the competitive edge and has a real opportunity to gain a larger share of this growing market.
“While Aberdeen is home to the majority of underwater engineering and technology companies, there are significant clusters across the UK, including Scotland’s central belt, the North-East England and South of England, supporting a range of sectors including offshore wind, marine renewables, aquaculture, oil and gas as well as defence.
“As the industry’s trade body, Subsea UK has been central to the development of the Hub concept, working in partnership with industry, governments and academia and we will lead the delivery of the Hub.”
Jean Morrison, Aberdeen Renewable Energy Group (AREG) chair, said: “This news will be greatly welcomed by the north east energy sector.
“It’s an industry that has experienced highs and lows throughout the decades but this could be the toughest recovery yet, so it’s important we use this crisis as a catalyst in the transition to net zero.
“The Energy Transition Zone at Aberdeen South Harbour looks set to provide a first-class base to develop renewable and low-carbon technologies and the city is already home to some of the most ground-breaking hydrogen initiatives.
“With decades of experience and knowledge, the north east is not only well placed to deliver on energy transition but also attract investment and create jobs for the region.”
