Aberdeenshire has a new energy industry and it’s green. From being the dream of a few individuals probably written off as slightly barmy, offshore wind has become a major part of the energy transition, for the UK as a whole, but also for north-east Scotland. Just take a look off the beach at Balmedie where the piles for the Aberdeen Bay Offshore Wind Farm are being installed as I write. Work is also continuing apace in the Moray Firth where the last 12 months have seen installation of all the offshore piles and a third of the jackets for the 84-turbine, £2.6billion Beatrice Offshore Windfarm. The first electricity could be generated as early as July and the operator, SSE, expects the farm to generate up to 588MW of power – enough for about 450,000 homes – once it is fully operational, which is expected in 2019.
The UK Government’s decision to end wind farm subsidies, including closure of the Renewables Obligation to nearly all new generating capacity, has raised concerns across the nation’s renewable energy sector. New renewable generating stations will now be expected to seek support under the Contract for Difference (CFD) mechanism but this is only open to emerging technologies such as offshore wind. The more established means of renewable power generation including onshore wind, solar and biomass are currently excluded from CFD support.
Notwithstanding a degree of stability during 2017, the “lower for longer” oil price continues to affect the industry, and while these pressures can be positive, forcing efficiencies and stimulating innovation, they also bring challenges, and at times disputes.
December is always a good time to reflect on what we’ve seen in the past year and consider what the next 12 months might hold for the UK’s oil and gas sector.
Who takes the risk in an offshore construction project if the design imposed by the contract terms is wrong? The company which has required the use of that design, or standard, or the contractor which agreed to design and build using it?
As 2017 progresses, the Oil & Gas Authority (OGA) will have a lot on its plate as it clarifies expectations, identifies priorities and grows more confident in applying its powers.
Decommissioning and security related issues have been one of the principal barriers to upstream oil and gas mergers and acquisitions activity in recent years.
There may not appear to be an obvious link between the prospects for North Sea oil and gas and the recent successes of British Cycling.
But the innovative thinking which delivered Olympic gold medals and Tour de France victories could also benefit the UK’s energy industry.
