Sustainable energy, making it work for everyone
Post info
8 Nov 2022
Sustainability is central to all conversations currently, especially in energy production and consumption. Petroleum reserves whilst providing a reliable source of energy are a huge source of pollution and therefore renewable forms of energy such as wind power, hydro power, solar power, biomass and geothermal heat power have naturally become the focus of many of our clients.
The UK government has been proposing the idea of sustainable energy for years including a white paper from over a decade ago in July 2011 when they published ‘Planning our electric future: a white Paper for secure, affordable and low-carbon electricity’. This paper set out key measures to attract investment, reduce the impact on consumer bills, and create a secure mix of electricity sources including gas, new nuclear and coal-fired power stations with carbon capture and storage (CCS) and renewables. Another was written earlier this year in April 2022 which looks at the British Energy security strategy
These plans are noble and needed but what is the reality of bringing these plans to fruition and resourcing these projects?
Matt Halle, CEO of Applica gives his view on how these aspirations and issues are being addressed in the energy markets.
“Oil and Gas as we know has been and still is the main energy source across the globe In order to reduce carbon emissions we undoubtedly need to work with more sustainable sources of energy and encourage new technologies to reduce carbon emissions, but this is far from a straightforward task…
Infrastructure
In determining the success of renewables as an alternative source of energy we need to consider infrastructure. Solar and wind are uncapped sources of energy, but these technologies do not yet have an entrenched infrastructure. In comparison to oil and gas, renewables as an industry has only been around for a relatively short period of time and were introduced into an already established market which is efficient, reliable and cost effective to run. Oil and gas as a source of energy has had 175 years of development in its infrastructure, pipelines, oil rigs etc.
CEO of National Grid, John Pettigrew, addresses these challenges in his recent interview with the BBC.
The full interview can be read here
Skillsets
For the UK to gain energy security by 2030 it is estimated that around 120,000 skilled personnel will be needed in the next five years. Currently there aren’t 120,000 people with a skill set labelled ‘sustainable” or “energy transition” but skill sets are interchangeable between disciplines and can be applied to a wide variety of projects and applications. When renewable and sustainable energies came onto the market the skill set of someone working on a solar panel project or windfarm were worlds apart from someone working in oil and gas. However, as projects are becoming more complex the skills are becoming interchangeable and this is exactly what is needed if we are to move towards reliable sources of sustainable energy.
Return on investment
Increasingly projects are being planned with sustainability in mind. Adding future hydrogen capability to pipeline networks or hydrogen capability to onshore processing facilities gives banks the comfort that their investments will still have return on investment beyond the traditional lifecycle of an oil and gas asset.
However, the return on investment of a standalone energy transition project, such as carbon capture or hydrogen, is less obvious than a traditional oil and gas project. Limited case studies coupled with increasing costs of raw materials and labour means many of these projects remain in a holding pattern, even during a period of energy crisis.
The future
Clear policy is required from the UK government on the future energy mix if we are ever going to reach a position of energy security, or even become an energy exporter. We need assurance that all energy sources are considered equally important, rather than following one that appears to satisfy public opinion. It needs to be clear, consistent and incentivize energy companies across the supply chain to invest in the technologies to build a sustainable future, whilst not compromising the lifestyle we have all become accustomed to. We are doing our bit by working closely with clients to plan and execute projects that contribute to net zero goals but also maintain long term return on investment for shareholders.