The UK offshore energy sector must invest now in technology innovation to create a net zero North Sea or it will not become a global leader in clean energy, a report has warned.
On 30 November, the Oil and Gas Technology Centre (OGTC) and the Offshore Renewable Energy (ORE) Catapult published a report, Reimagining a Net Zero North Sea: an integrated energy vision for 2050, setting out a direction for the UK’s net zero offshore energy system. It stated that investment at pace – up to £416bn over the next 30 years – would accelerate new job opportunities, potentially mitigating major job losses otherwise expected over the next decade, while resulting in up to £125bn per year for the UK economy and delivering savings of £154bn by 2050.
The vision is built on four main pillars – offshore wind, oil and gas, hydrogen, and carbon capture and storage (CCS) – all of which are considered interdependent and interacting to achieve the 2050 goal. Deployment of between 60GW and 150GW of offshore wind by 2050 is considered central to a net zero North Sea, supporting green hydrogen production as well as electricity for domestic consumption and export, while electrification and integration with renewables of oil and gas was cited as critical, together with technologies that deliver net zero production emissions from the sector.
The report highlighted hydrogen as a “substantial economic opportunity” for the UK, with blue hydrogen becoming a critical intermediate solution in the transition and acting as a bridge to green hydrogen. It would help to build a hydrogen economy and create demand which, without, the ability to harness the full potential of green hydrogen could be at risk. It added that action and investment in green hydrogen is required now as part of a long-term strategy with the aim of replicating the success of cutting the cost of offshore wind.
Widespread deployment of CCS, meanwhile, will decarbonise oil and gas, as well allow for blue hydrogen production, while enabling the development of a net zero North Sea. Early adoption would dovetail with demand for blue hydrogen in the near term, laying the foundations for large-scale production of green hydrogen in the medium term.
Based on the Committee on Climate Change’s Further Ambition scenario, the report explored three scenarios of its own, each of which see the UK reach net zero by 2050 using a combination of energy solutions to meet demand – though resulting in differing levels of economic benefits and green jobs. It set out that at present (2020), blue and green hydrogen are not commercially available, gas import dependency is rising year on year, floating wind is being trialled in UK waters, and CCS is under development though not operational. The North Sea has a total economic impact of £40bn, 140,000 direct and indirect jobs, UKCS imports stand at around 45%, while average investment is £10bn per annum.
In an “Emerging” 2050 scenario, where renewable electricity plays an increasing role with gas still a significant contributor to the overall energy mix, alongside a significant requirement for CCS, there is an £80bn economic impact, 113,000 jobs – a 20% decrease from 2020 – and £6.5bn investment per year. A “Progressive” scenario would see blue and green hydrogen playing a major role, with an increased share of offshore renewables dominating the electricity market and CCS once more playing a significant part. This would see a £100bn economic impact, 158,000 direct and indirect jobs, with £9.4bn investment.
It’s under the report’s “Transformational” scenario, however, where the greatest change is seen in an energy system driven by offshore wind and green hydrogen.
This would see an economic impact of £125bn, 232,000 direct and indirect jobs, which would mark a 66% increase in 2020, UKCS imports falling to around 10% and investment of £13.4bn per annum. Driven by £416bn cumulative investment through to 2050, the report set out how realising this vision would require floating wind to access deeper waters and increased capacity; a scale-up of green hydrogen, requiring significant cost reduction and efficiency gains; a scale-up of blue hydrogen, with cost reduction and efficiency gains by 2035; a fast-track consenting process for new offshore deployments, both wind and hydrogen; and oil and gas electrification to extend field life and secure domestic supply.