Reactions to UK energy strategy

Stakeholders from across the oil, gas and electricity generation sectors welcomed the UK government's confirmation that more hydrocarbon licences will be offered later this year, acknowledging the move as key to sustaining UK energy security in the medium term.

Analyst firm Wood Mackenzie cited research on UK Continental Shelf production that showcased the sheer variance in possible production outcomes at the end of the current decade, meaning there is still much for the upstream sector to play for.

By 2030, North Sea oil and gas output could be anywhere from 600,000 barrels of oil equivalent/day to 1.6 mn boe/d. The range for hydrocarbon demand is wider still, as the impact of energy transition policies - everything from nuclear to geothermal energy and renewable gas - remains unclear. Current estimates suggest the UK produces around 1.5mn boe/d on average.

WoodMac's upstream North Sea director Neivan Boroujerdi said on April 7: "By 2050, UK North Sea production will have largely ceased. But even in a net zero scenario, demand will persist with emissions being offset by CCS and nature-based solutions."

"Current levels of production could be maintained for the next decade, underpinning energy security and safeguarding jobs. But the UK is sorely lacking in gas and will be heavily reliant on imports in all scenarios," he said.

Elsewhere, NGO Net Zero North West hailed the government's decision to double hydrogen production with a new site - HyNet North West - in its local area. "We'd previously called for more ambitious hydrogen targets so welcome the government's plans to double hydrogen production with HyNet North West able to deliver a significant proportion of this," said CEO Ged Barlow.

While backing new hydrogen capacity, Net Zero North West also believes the central role of natural gas in the new UK energy strategy vindicates its position that the transition fuel should not be demonised.

"Reaching net zero is a journey and we will require carbon capture and blue hydrogen to get us there," said Barlow. "This does not mean a step back from net zero. In fact, we suggest that the additional tax income from more UK produced natural gas could be used to fund the transition to net zero."

A new era of pragmatism was also hailed by the director of University of Aberdeen's Centre of Energy Transition, Professor John Underhill, who said it marked the first time in "decades" that Whitehall had recognised the role of UK oil and gas in the energy mix.

Three quarters of the UK's current energy requirements are met with oil and gas-based products, and roughly 40% of electricity output comes from these fossil fuels.

"The strategy recognises the inherent complexity of our energy supplies and shows an appreciation of what contributes to our current energy system, as well as identifying the low carbon technologies needed in the future," Underhill said. "It presents a holistic approach governed by the need for secure, affordable, ethical, environmentally sustainable, and low carbon energy supplies."

However Myles Kitcher, the executive director of Peel NRE, a clean energy and economy subsidiary of infrastructure developer Peel L&P, was disappointed that Whitehall did not carve out a greater role for offshore wind. The UK aims to source 95% of electricity from low carbon sources by 2030, and Kitcher believes wind energy holds the key. 

"Reaching [the target] is going to require a huge roll out of renewables. We would have liked to [have seen a firmer commitment to the role that onshore wind can play and a removal of the current moratorium as well as recognising the huge potential of solar farms. These are the projects that will delivery in the short term, before new nuclear and offshore wind come online."