The UK supply chain needs urgent clarity on the future of the North Sea – if we get it right, we can all prosper from the transition

An article by Colin Elcoate, CEO of SMS & The Alderley Group

15 September 2021

The North Sea region has been a major growth driver for the UK economy for well over 40 years. 

The development of the region’s resources has delivered jobs and investment.  It has helped us to embed new skills and capabilities, technology, and infrastructure within the economy. 

Often overlooked, the region has enabled the UK to be far less reliant on foreign energy than it otherwise would have been.

But the North Sea region is at an inflection point.  As noted in the OGUK’s recent Economic Report 2021, as the region’s economy moves away from a reliance on the extraction of hydrocarbons, it needs a ‘managed, fair and inclusive’ transition as envisaged in the North Sea Transition Deal

If implemented correctly, the North Sea Transition Deal could see communities right across the UK’s eastern coastline flourish as a combination of new and existing skills, technologies, and knowledge mix to create one of Europe’s most dynamic energy producing regions. 

What other country has over 1,000 highly specialised supply chain companies ready to transfer their world-leading experience to new growing sectors like hydrogen and CCUS?

A well-managed future for the North Sea must be secured and implemented across the region that provides clarity to supply chain companies like Alderley and group partner SMS, which require certainty to develop unique competitive solutions that match UK engineering heritage with competitive manufacturing and digital-led approaches.

Moreover, there is a whole supply chain that sits behind companies like Alderley all hoping to secure orders, maintain jobs and keep their businesses moving in uncertain times.

This need for clarity is acute given the North Sea’s potential for a transformation that embraces existing and new energy sources.  We must bridge this gap.  If we don’t, we will be at risk of repeating the mistakes of offshore wind, which while a resounding sectoral success, has been led mostly by European companies.

It’s clear to all that the UK must seize the opportunity to become a leader in low carbon technologies such as hydrogen and CCUS, but to do this properly the UK must utilise its existing skills base, knowledge, and expertise already in the North Sea region.

Companies like Alderley will continue to invest giving UK projects in the region every chance of succeeding.

But as we enter Party Conference season, I’d like to see politicians from all sides recognise the unique contribution that the North Sea region has made to the prosperity of the UK.  This should be translated into action that gives companies working in the North Sea the reassurances they need to build for now and the future.

If we do this correctly, there is every reason that this region will continue to deliver growth, jobs, investment, and exportable UK expertise for decades to come.

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Colin Elcoate is CEO of Alderley plc and has worked in the energy industry for over 25 years.  Alderley is an integrated solutions provider for the global energy industry with operations across the UK, the Gulf and Asia.  See:  https://www.alderley.com/

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