New funding for projects in Scotland, Humberside, Teesside and Merseyside
The investment in the UK offshore energy industry outlined in Wednesday's Comprehensive Spending Review is progress towards a clearer picture of how the government will support homegrown energy.
Offshore Energies UK has repeatedly highlighted the need to prioritise domestic energy production to unlock economic and industrial growth and safeguard jobs and energy security, as well as meeting net zero targets.
The announcement of new funding is an important move towards final investment decisions in this parliament for the Acorn carbon capture and storage (CCS) project in Northeast Scotland and the Viking project on Humberside, alongside the expansion of existing carbon capture projects on Teesside and Merseyside.
CCS is a key technology for the UK’s goal of removing 30 million tonnes of CO2 a year from the atmosphere by 2030 to decarbonise and help grow UK industry.
Further details of long-term support for these projects will be required from government for industry to take advantage of the economic opportunities carbon storage presents to the UK.
With supportive policy the carbon capture and storage sector could protect over 100,000 jobs in industrial regions across the UK, contribute billions to the economy this decade and be worth £100bn to the supply chain by 2050.
Independent research has demonstrated that the existing domestic oil and gas supply chain already has at least 80% of the resources required to deliver these projects which are critical to decarbonisation of our energy intensive industries from power generation to chemicals, refining, glass and cement production.
Today’s announcement comes at a critical time for the offshore energy sector and the drive to reduce reliance on overseas oil and gas. Ongoing consultations will shape the future of the North Sea and the role it will play in providing energy in the coming years.
The government also reconfirmed its £300 million commitment to support the offshore wind supply chain through GB Energy. Details of the UK government’s forthcoming wind and renewable energy auction round (AR7) are still to be spelled out ahead of its launch later this year.
Domestic oil and gas production from the North Sea is crucial to reducing the UK’s dependency on imported power and is a vital pillar in the development of offshore wind energy which is expected to fuel a major new energy export industry.
The UK offshore energy sector currently supports more than 200,000 jobs in oil and gas alone and generates some £25 billion a year in gross value added to the UK economy.
David Whitehouse, OEUK’s CEO says:
'The Chancellor was right to say that energy security is national security and also to recognise the need to reduce reliance on overseas oil and gas. Domestic production is the path to energy security and economic growth.
'The support for the next phase of carbon storage projects in Scotland and Humberside is welcome, and an important step towards final investment decisions later in this parliament. Together Viking and Acorn have the potential to unlock over £25 billion of investment by 2035, creating over 30,000 jobs at peak construction.
'These projects will provide the pathway to support the decarbonisation of UK industries and are critical to the government’s clean power objectives. We will continue to work with government to detail the long-term support required to deliver these projects and unlock the UK’s wider CCS ambitions.
'We agree with the chancellor that it matters where we make things and who makes them. Homegrown energy production which will protect security and jobs, must be at the heart of our industrial strategy.'
Source: OEUK
