Scotland's energy sector - unlocking investment: joint business plan

Annex: Oil & Gas Transition

Barriers and actions

Barrier #1: Levels of Investment Required to Reduce Operational Emissions of Oil and Gas Production

Stakeholders: Scottish Government; UK Government;

• Implement a Robust Emission Trading Scheme that provides a level playing field and prevents delocalisation (carbon leakage).
• Implementation of new OGA Strategy.

Barrier #2: Lack of Investment Required to Support Offshore Electrification

Stakeholders: UK Government;

• Use of auction revenues for certificates to promote deep decarbonisation efforts: fuel switching electricity invest in cables transformers.
• Coordinated investment to achieve economies of scale in different parts of UKCS basin (OGA responsible).

Barrier #3: Complex Skills Landscape and Risk of an Unmanaged Transition for the Oil and Gas Workforce

Stakeholders: Scottish Government; UK Government;

• Continued support for the Energy Skills Alliance and it's initiatives
• Continued support for North Sea Transition Deal
• Alignment with UK green skills initiatives (e.g. Green Jobs Task Force)

Barrier #4: Need for Greater Support for the Supply Chain to Continue Developing

Stakeholders: Scottish Government; UK Government;

• Provide international support for supply chain companies active in the supply decarbonisation and energy transition space (e.g. through bodies like SCDI)
• Showcase downstream local capabilities in emissions reduction for use in offshore application
• Support cross-sector knowledge sharing e.g. with marine renewables cluster

Results

• Continued oil and gas production and development to provide secure energy sources during transition
• Scotland as a leading global provider of low emission oil and gas.
• Jobs and maintaining supply chain in support of energy transition
• Integrated offshore electricity networks with renewables and taking advantage of synergies
• Integrated energy companies and supply chains across offshore sector

Example projects

• Orion project (Renewables / O&G Integration) Provision of clean energy from renewables. Orion will de-risk future hubs via learnings and technology identification. It will create employment across Scotland, deliver between £31 and £220bn in economic impact and aid offshore electrification.
• Alternative Fuel Gas Technology Zero-carbon retrofit solution for existing gas turbines, enabling to run a blend of 100% zero carbon fuel. It will result in significant inward investment and sustain significant number of O&G jobs.
• Axis Tension Leg Buoy (TLB) Floating Wind Foundation FEED study to generate employment, subsequent fabrication and demonstration deployment activity, generating £5-6m. Resulting in significant job creation in Scottish fabrication and reduction of CO2 emissions.
• QL Tech PowerLink Enabling green power from shore to offshore assets. Demonstration unit to be built and tested in Aberdeen resulting in new product line with Scottish IP, and global potential.