ICE Offshore report - .PDF file.
Vice President, Institute of Civil Engineers
The UK is in the grips of a security of supply crisis. By 2025 we will lose over a third of our electricity generation capacity with the closure of several of our largest power plants, under the European Union, Large Combustion Plants Directive. At the same time, to have any hope of meeting pressing environmental targets which are essential in our fight against climate change, we need to urgently decarbonise our energy supply – electricity, heat and transport.
OFGEM has estimated the energy sector needs to invest £200 billion just to maintain and upgrade our existing infrastructure. The costs of fully transforming the sector to actually meet future needs is much higher. In order to cut 80 percent of emissions by 2050 we will need to fully exploit all forms of renewables, including emerging technologies, as well as upscale CCS and nuclear significantly. This is all on top of the work we need to do to bring our existing infrastructure into line with new targets and increasing demands.
As daunting a prospect as it is, ICE does not believe it is unachievable. But it presents challenges that need to be addressed now – not tomorrow, not next year, but today. The energy sector underpins our economy – if confidence in the security of UK energy supply is lost our global competitiveness will be severely affected
In our recent report Offshore Renewables – Unlocking the Potential ICE points out that the rapid up-scaling of offshore renewable resources could provide a solution. (The full report can be downloaded at the bottom of this page – Ed)
The UK possesses some of the richest natural energy resources in the world, with the potential to supply up to half our energy demand. Harnessing the UK’s abundant wind, tidal and wave resources could provide a clean and reliable source of energy, as well as make a massive contribution to the economy with the creation of over 40,000 jobs.
In January this year the third round of tenders for offshore wind sites was announced, representing over £100 billion of private investment and 32 GW of projects. If achieved, these projects, combined with advances in wave and tidal energy generation, could contribute significantly to plugging the energy gap faced by the UK.
However, achieving all this will require rapid expansion of the sector, on a similar scale as the North Sea oil and gas sector in the 1970’s. Currently it is unclear how industry is going to be able to deliver on this opportunity. Lack of clarity around funding, regulation and carbon pricing has created an environment of uncertainty, and we will need massive investment in key areas of the supply chain, such as port developments and supporting onshore infrastructure, to support such significant growth.
Although recent announcements by Government of a Marine Action Plan and a training centre for offshore wind technology are excellent steps forward, we still urgently need action to ensure we have the workforce to deliver the plan and a secure environment within which industry can invest, including clarity around funding and regulation.
ICE recommends three course of action. Firstly, Government must take the lead, providing a supportive financial framework and efficient planning system within which industry can invest with confidence. Secondly, there must be a reassessment of OFGEMs remit, taking into account uncertainty around carbon pricing and long-term
security of supply. Finally, support and development of the required skills areas and supporting sectors will be essential to be able to meet this challenge on the ground.
It is our hope that we will see action in these areas in coming years, regardless of the political agenda. To avoid the lights going off in the future and to retain the UK’s global competitiveness we must exploit our offshore resources, with a vision that extends over and beyond the political lifecycle.
Now is the time for the UK to move out of the rhetoric and into reality. It would be a terrible shame if in 20 years we are forced to admit ‘we missed a trick’.