How UK Supply Chain Companies are ideally placed to capitalise from the Global Energy Opportunity
A view from the Middle East
Much has been made of recent attempts by the US and EU to capitalise on what many call the ‘once-in-a-century’ opportunity to accelerate the development and deployment of ‘green’ technologies such as hydrogen, carbon-capture and storage, batteries, wind and solar.
The US’s Inflation Reduction Act has upended the model for funding green technology by pumping $369bn of subsidies to kickstart the country’s leadership ambitions in renewables and low-carbon technology with the further goal of tackling climate change. The EU has followed suit with its own Green Deal Industrial Plan spending plan allowing more national support for low carbon projects in an attempt not to be left behind by the US.
However, while the US and EU continue to gain positive media headlines there is a much deeper story to be told about what is happening on a global level as we collectively seek to develop green technologies, which will enable us to transform our energy systems.
The Middle East perspective is particularly instructive and timely – I write this from Alderley’s busy regional headquarters in Saudi Arabia and feel well placed to give my thoughts.
First, in the Gulf, various governments have outlined the vision for each country in a coherent strategic plan. For example, Saudi Arabia has Vision 2030 as its guiding policy towards societal transformation through the private sector, which aims to shift the country’s economy away from hydrocarbons.
This strategic vision is being supported by leading regional companies, which are now actively seeking low carbon solutions to improve the efficiency and ‘green’ their operations at every turn.
This is creating incredible opportunities for growth and positive change that we all should welcome. It has stimulated fantastic prospects for UK supply chain companies in the energy sector that have established business links to the region and deeply value long-term relationships with Gulf-based clients.
This strong overarching platform has also resulted in the development of green economic hubs – particularly in Saudi Arabia and the UAE – which, given strong government support, have been able to grow quickly and deploy new technology rapidly and at scale. Look at the ambition of NEOM where plans are underway for the city to run on renewable energy. Masdar in the UAE has been the jewel of that country’s strategic plans for well over a decade.
The speed of deployment in energy projects and low carbon solutions is remarkable and is in stark contrast to what we as a company have often experienced elsewhere. This makes project times quicker and demand for executing orders tight.
The order pipeline for low carbon technology is developing accordingly. In the region, Alderley has recently delivered a metering skid for a blue hydrogen site for a carbon capture project. Plans are underway for more such skids to be developed and deployed.
There is high demand for consultancy and digital solutions to support emissions monitoring and reporting and there is a real drive to understand where carbon emissions are occurring and what can be done to reduce them.
There is also an ambition where possible not just to improve the efficiency of existing operations and ‘green’ them but to make the leap directly to developing some of the most advanced technologies on the planet.
The work of Alderley Group company SMS with Cambridge-based clean tech leader Levidian is one such example – the solutions we are jointly developing will be deployed in the Middle East.
Levidian’s LOOP technology converts hydrocarbon gas into graphene – a super material as well as hydrogen – a fuel that emits zero carbon when combusted. Levidian’s technology has already been deployed to the UAE and these LOOP systems are being prepared in response to significant client demand, with their final locations to be determined during the course of assembly.
That is but one example of the kind of cutting-edge low carbon technology that is being developed, in this instance by two British companies, that will serve the economies of the Middle East.
In short, the Middle East opportunity is huge and multifaceted – imagine the possibilities to create green hydrogen from the region’s abundant solar resources. No wonder that countries in the region have identified hydrogen as a major play in their renewable energy growth strategies. COP28 – to be hosted in the UAE – will bring the region’s clean energy ambitions into sharp focus.
What’s also clear is that the countries in the region are gearing up to export the new technologies being developed and deployed in the region to the rest of the world. Therefore, it’s highly likely that some of the technologies that Alderley and other UK supply chain companies are developing for the Gulf will be used to produce the hydrogen and ammonia that might be shipped to the UK in years to come.
This is an exciting prospect and brings into sharp focus the way in which low carbon technologies are reconfiguring the global energy market. It highlights the fact that Gulf-based countries that we have relied upon so much for our energy needs for the last 60 years are not content to stand still but are actively seeking global leadership.
Finally, I’d like to draw another conclusion – that is for companies in the UK, and indeed the UK government, not to become complacent about the future. The UK government could take a leaf out of the book of many of the countries of the Gulf region and build a strategic long-term vision for our energy sector.
We, the UK energy supply chain, needs this urgently.
While Alderley, like other UK businesses, seek new opportunities and grow within this new global market paradigm of greening technologies and low carbon solutions, we must not take the current situation for granted and believe that this will always be the case.
We must continue to evolve as rapidly as the fast-moving global market. But by understanding the drivers for this change we give ourselves a fighting chance of competing well in an ever-evolving global energy landscape.
Colin Elcoate is CEO of the Alderley Group and has worked in the global energy sector for 30 years. Alderley established operations in the Middle East in 2001 and currently has facilities in Qatar, Saudi Arabia, and UAE with decades of expertise in measurement and metering, hydraulics, and digital engineering solutions for the global energy sector.
