Frequent sense tells us that the UK is a dinky island with depleted oil & gasoline reserves and high costs, and that corporations ought to nonetheless be rising their export focal point to live on and prosper. All of us fetch this, however the stats are in actuality telling…
The UK greenfield CAPEX market in oil & gasoline and offshore wind, current and announced tasks 2020-2025, is $164bn, which is 3.3% of the worldwide $4.9tn market. This sounds extensive and thrilling, however the devil is in the detail.
If truth be told, UK only accounts for 1.3% of the worldwide oil & gasoline CAPEX market ($57bn of $4,362bn) – and this proportion is worsening rapid on account of European decarbonisation pressures.
The UK fares better in offshore wind with 15.8% of the worldwide CAPEX market ($107bn of $570bn) – however this proportion would possibly per chance be reducing rapid because the UK will rapidly concede its converse because the #1 global offshore wind developer.
More devilish detail is that the UK’s present chain is a lot stronger in oil & gasoline than offshore wind and but the offshore wind market in the UK is now with regards to two instances that of oil & gasoline. Of the 3,500 UK energy present chain agencies now we grasp, 3,000 are energetic in oil & gasoline, versus only 900 in offshore wind, and upright a reminder we import 100% of offshore wind turbines, mainly from Europe.
Energy transition applied sciences are deliberate to enable the UK to fulfill its 2050 win zero carbon commitments, and in addition they’d synchronize nicely with our sturdy oil & gasoline present chain means.
International hydrogen and CCUS tasks are already expected to top $80bn by 2030, and there are fresh bulletins practically day-to-day by varied international locations across the sphere pushing up this estimate. The UK accounts for a quarter of those project bulletins, however the lion’s fragment nonetheless await authorities approval.
Time is passing us by and if we don’t develop energy transition means contained in the UK, then we are in a position to be unable to export the aptitude in the slay.
UK agencies are factual exporters, nicely regarded by potentialities globally, and certainly energy corporations moderate 60% of their present revenues from legacy export markets, developed in better instances sooner than the 2014 oil crisis that changed the whole lot. Since then, only 10-15% of agencies grasp invested in creating fresh export markets, looking for faster returns with lower dangers by innovating and diversifying contained in the UK.
In conclusion, the stats are compelling and being concerned – the UK energy CAPEX market is alarmed hasty on all fronts, and but present chain behaviour continues to shrink back from investing in fresh export markets. One thing has to offer. Will authorities lend a hand – by approving fresh assemble nuclear energy vegetation, or utilizing COP26 to approve grand extra heroic energy transition investments? Or will present chain bosses look for the gentle and grasp in mind beyond UK shores for sing as soon as extra?
This conundrum is why the EIC, along with our authorities and industry companions, are taking part to carry the Energy Exports Conference to the UK all as soon as more, to lend a hand agencies to shortcut the export path of, to effectively target fresh project opportunities, to fulfill key selections makers and re-assemble global networks. The tournament is free to aid, and we hope it helps.
Register to aid the virtual Energy Exports Conference at www.the-eic.com.