Economics of Independence News

Transition from oil to renewables about to ‘transform’ Scotland’s energy industry

Written by News Team

Three quarters of contractors working in the oil and gas sector in the Aberdeen area expect to move into renewable energy in the next three to five years.

The scale of the expected transition from fossil fuels is revealed in a report published today  by Aberdeen and Grampian Chamber of Commerce (AGCC).

The findings are revealed in the 33rd AGCC Oil and Gas Survey and the number of contractors expecting to make the transition is at its highest level since the question was first asked in 2015.

It’s more positive news for Scotland’s booming renewables in the same week that plans were unveiled for a major £40m infrastructure development at Leith.

The Aberdeen survey found that almost half of the respondents expected to recruit new staff in the next 12 months.

The industry is on the cusp of transformation and much of our findings reflect the collective sense of anticipation

The survey covered the six months to April and was carried out in partnership with the Fraser of Allander Institute and KPMG in Aberdeen.

Martin Findlay, senior partner at KPMG in Aberdeen, said: ‘’The industry is on the cusp of transformation and much of our findings reflect the collective sense of anticipation.’’

The survey also found contractors expected oil and gas activity would account for less than three quarter of their business activity by 2025. The current average is around 86%.

The survey follows a report by experts at Aberdeen University on Tuesday which said the majority of the UK offshore workforce could be employed in the delivery of low carbon energy by 2030.

The experts said that the skills of the current offshore workforce could easily be transferred into the renewables sector.

The transition to renewables will play a big part in meeting the Scottish government’s target of net zero greenhouse gas emissions by 2045.

However optimism over the potential of Scotland’s renewables sector was tempered with a warning yesterday that charges levied by UK regulator Ofgem could dash hopes that the green revolution will provide a huge boost for Scotland’s economy.

A report published by a RenewableUK member organisation said that Ofgem are putting Scotland’s predicted sustainable energy boom at risk by presiding over a system which levies far higher electricity transmission charges on Scotland than exist south of the Border and Europe.

The analysis shows that Scotland is charged an average of £6.42 per megawatt hour (MWh). The average transmission charge in England and Wales is just £0.49/MWH.

The difference is even more stark in the north of Scotland, where transmission charges are £7.36/MWh, with prices forecast to rise further still. EU generators pay an average of just £0.46 (MWh) in transmission charges.

The transmission charges are used to build and maintain the electricity network.




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News Team

Articles by News Team may be written by various members of the Business for Scotland team.

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