Why the UK needs a balanced and reimagined energy system to deliver skills, jobs, and growth

By Colin Elcoate, CEO of Alderley

7 April 2022

Today’s new Energy Security Strategy is an important step change in policy

The UK Government today published a new energy security strategy.  It comes off the back of rising consumer energy costs, war in Ukraine, and a long-term drive to secure Net Zero in the UK by 2050.

We should very much welcome the new strategy and prioritisation of the energy sector.

The UK’s energy market is facing huge challenges and with energy a growth driver we should all be concerned by the rising cost of energy for consumers and industry.

However, there are many exciting things happening in UK energy that the government is trying to support and augment. 

We should applaud this – not the least a commitment to double the level of hydrogen production from 5GW to 10GW by 2030 and to ensure that ‘green hydrogen’ is 50% of the mix.

The recognition that new nuclear must play a large part in UK baseload is welcome as are the upgraded plans to increase offshore wind production.  This plays to the UK’s unique island geography.

Moreover, domestic UK oil and gas production has received a timely boost.  A new licensing round for North Sea oil and gas projects is scheduled for Autumn with a new taskforce providing bespoke support on new developments. 

This is clear recognition of the vital nature of hydrocarbons to the energy transition and to energy security.    

It seems crazy to seek expensive foreign sources of hydrocarbons when we have the resources on our doorstep and the world-class industry and supply chain to deliver secure, reliable, and affordable domestic energy supplies.

As the strategy rightly states, “producing gas in the UK has a lower carbon footprint than imported from abroad”.

While the UK hydrocarbons industry remains economically viable, we should tap into it particularly as it acts as a bridge to a decarbonised future composed of hydrogen, CCUS, renewables and other complementary technologies.

For energy security, decarbonisation as well as economic reasons, the sooner the new security strategy is implemented and funded the better. 

Ultimately, it will enable us to get to a more sustainable, lower carbon system with the UK more ‘energy secure’ and less dependent on often volatile foreign sources of energy and technical expertise from abroad.

This brings me to a few other key points. 

The UK energy system to 2050 must have a well-balanced mix of nuclear, renewables, hydrocarbons, and emerging technologies, like fusion and storage. 

The good news is that it appears that the government has realised this and is working hard to deliver on that vision.  That deals with the supply side.

Often neglected is the demand side.  It is crucial that we maintain focus on helping business, industry and consumers become more efficient with their energy usage. 

If we get this right, this will truly represent an integrated systems approach.  For example, Alderley’s work in the UK and globally, is focused on delivering bespoke solutions that enable clients to develop energy as efficiently and as safely as possible.  Demand for efficiency is there from industry.

On the hydrocarbons side, we should endeavour to decarbonise and make the whole production process more efficient through transformational digital technologies and existing applications such as CCUS. 

Developing skills further in these areas will serve to future-proof the deployment of other global technologies in the UK later down the line.

Indeed, as CEO of a UK supply chain business, the single most pressing challenge over the next decades will be developing the human capital able to respond to the needs of the new energy landscape captured in the Energy Security Strategy.

By focusing on what we know works, by integrating new digital technologies and by developing new skills to drive efficiencies, I am confident that a more balanced and secure UK energy system will emerge in the years to come.

 Colin Elcoate is CEO of the Alderley Group and has worked in the energy industry for 30 years.

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