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New Energy World magazine logo
New Energy World magazine logo
ISSN 2753-7757 (Online)

Delivering our energy future – pathways to a ‘just and fair’ transition

19/6/2024

5 min read

Head and shoulders photo of Professor Paul de Leeuw,, with trees and grass behind him Photo: RGU
Professor Paul de Leeuw, Director, Energy Transition Institute, Robert Gordon University

Photo: RGU

Transforming the North Sea to a multi-energy basin is certainly possible, but action on employment and skills retention is needed now if the transition is to be in any way just or fair, argues Professor Paul de Leeuw, Director, Energy Transition Institute, Robert Gordon University.

The UK offshore energy industry has been a UK and Scottish success story for over 50 years and its commitment to achieving net zero by 2050 (2045 in Scotland) has meant an opportunity to re-position itself as a world-class, multi-energy hub.

 

Although the destination has been clear – the route towards it still needs urgent definition. While there is consensus across stakeholders, including governments, politicians, industry organisations and economic development bodies that we need to realise a ‘just and fair’ transition, a far more agile and joined up approach is required to address how the country can best secure its energy ambitions while also addressing the cost of living crisis, managing energy security and delivering on the net zero agenda. This will require some fundamental questions to be answered.

 

First of all, what does a ‘just and fair’ transition for the offshore energy industry look like, and how will we know when it has been accomplished? Robert Gordon University (RGU) used the United Nations definition of a ‘just and fair’ transition: ‘ensuring that no one is left behind in the transition to low carbon and environmentally sustainable economies and societies’. RGU defined this further by linking it to sustaining the UK’s 154,000 direct and indirect offshore energy industry jobs, maintaining the supply chain and sustaining the offshore workforce’s economic contribution at 2023 levels or better by the end of this decade.

 

Secondly, how do we get there? The answer inevitably lies in a permutation of three central factors: the extent of investment in renewable sources of energy, the degree of UK content associated with this investment and the rate of decline in oil and gas production.

 

In Delivering our Energy Future – pathways to a ‘just and fair’ transition, RGU analysed over 6,560 pathways for the UK offshore energy industry between now and 2030. The report concludes that UK and Scottish political decisions, rather than energy market economics, will determine the size of the workforce and supply chain.

 

Only a few paths are just and fair
Of the thousands of pathways analysed, fewer than 15 (or <0.3%) meet the ‘just and fair’ transition principles. Even these limited scenarios require success by the renewables sector in achieving higher levels of ambition through billions of pounds of additional investment over the remainder of this decade. However, when combined with an accelerated decline in oil and gas production, and the consequential loss of jobs and skills, the number of viable pathways is reduced to fewer than five.

 

The report also reinforces the need for urgent alignment across the political spectrum to agree the short-term actions that will deliver a ‘just and fair’ transition and the associated economic benefits for the country. To sustain the offshore energy workforce at 2023 levels, the UK must deliver close to 40 GW of installed offshore wind capacity (compared to around 15 GW cumulative capacity in 2023) and up to 40% of the investment needed to achieve this to be spent in the UK by 2030.

 

The RGU report further highlights that the ongoing decline in the oil and gas industry needs to be offset much more rapidly by both identifiably greater levels of activity and higher UK content in renewables if any of the pathways to a ‘just and fair’ transition are to remain open. Otherwise, interim steps will need to be taken to address the decline in activities (including oil and gas production, which is currently expected to reduce by more than 40% by 2030) to retain the UK’s world class offshore energy workforce and sector leading supply chain, and to sustain the economic contribution from the sector.

 

To achieve this outcome, the UK offshore energy sector needs to deliver on spend of up to £200bn over the remainder of this decade across offshore wind, hydrogen, carbon capture and storage (CCS), and oil and gas projects. Almost 50% (£100bn) of this is still subject to approval by operators and developers and is therefore not a given.

 

The ongoing decline in the oil and gas industry needs to be offset much more rapidly by both identifiably greater levels of activity and higher UK content in renewables if any of the pathways to a ‘just and fair’ transition are to remain open.

 

Retaining key skills
The RGU analysis indicates that close to one in 220 of the working population in the UK are currently employed in, or support, the offshore energy industry, compared to one in 30 in Scotland. The numbers for the north-east of Scotland are even more stark, with one in five of the working population in this region currently directly or indirectly employed in the offshore energy industry.

 

If there are delays to delivering the UK’s renewables ambitions, if activities are scaled back, or if the UK isn’t able to scale up local content, other activities (including oil and gas) may need to be sustained over the remainder of this decade to meet the specific objectives of retaining key skills and capabilities and ensuring a ‘just and fair’ transition for the UK’s offshore energy workforce and the supply chain.

 

There is still a unique opportunity to re-purpose the North Sea as a globally-leading multi-energy basin, powering the nation for decades to come, but decisive action is needed now to achieve this and, in the process, to realise a ‘just and fair’ transition.

 

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.