As renewable energy comes of age and global hydrocarbon operators shape strategies to move towards a zero-carbon future, those businesses with the foresight to grasp the nettle and embrace this new seascape will prosper and excel.
One recent example of a Scottish business which has leveraged a 40-year track record of service in the UK Continental Shelf to carve out a new revenue stream in the renewables sector is Aberdeen-based North Star Shipping.
North Star is long established as the owner and operator of the largest British wholly-owned fleet of vessels engaged in the UK offshore industry, supporting more than 50 offshore installations.
But it was the award of a £270 million contract by Dogger Bank Wind Farm to North Star Renewables, which underlined the massive opportunities available to companies looking to transition into the green energy space. The contract represents a transformational step forward for North Star’s energy transition ambitions to become a major player in the global offshore wind sector.
As energy transition gains pace, this is a growing trend which is seeing increasing numbers of our clients who traditionally work in the oil and gas sector, pursuing exciting new opportunities in the renewables sector.
To underline the pivot of traditional oil and gas businesses into renewables and energy transition, a report last month (May 2021) by the Robert Gordon University predicted that by 2030 the majority of UK offshore workers would be involved in the delivery of low carbon energy.
The UK Offshore Energy Workforce Transferability Review found that more than 90% of those currently working in the oil and gas sector have “medium to high skills transferability” which will allow them to switch to roles in offshore wind, carbon capture and storage, hydrogen and other green energy jobs.
The review’s lead author, Professor Paul de Leeuw, said energy transition provides a unique opportunity for the UK to retain its world-class reputation for a highly skilled energy sector workforce, which could secure around 200,000 jobs in 2030 for the offshore energy workforce.
Those working in the industry share that view. The 33rd Aberdeen and Grampian Chamber of Commerce Oil and Gas Survey found that 75 per cent of contractors surveyed, anticipated moving into renewables work over the next three to five years. This is the highest level recorded since the question was first asked in 2015.
Additionally, contractors believe oil and gas activity will account for less than three quarters of their business activity by 2025 - down from the current average of 86 per cent. It is clear those working in the industry are aware of their role in the transition to low carbon energy.
The renewables space represents a huge opportunity for many well-established oil and gas businesses. While the risk and reward associated with renewables projects may be different to typical hydrocarbon projects, those companies would be foolish to rest on their laurels and not to attempt to carve out a share of this fast-emerging market.
Neil Hehir, Legal Director and energy sector specialist at Pinsent Masons