POWERING UP BRITAIN

EIC CALLS POWERING UP BRITAIN PLAN “UNDERWHELMING”

In response to the Powering Up Britain Plan, industry-leading associations have been commenting on the action plans and what this means for the shape of the hydrogen economy.

The EIC expressed the need for clarity on project timelines may be causing uncertainty for supply chain businesses across the energy industries.

The Energy Industries Council described the UK government’s Powering Up Britain plan as underwhelming, saying the muchawaited announcement is not likely to encourage supply chain businesses to remain in the UK.

More comprehensive measures needed to catch the EU and US

They have called for more comprehensive measures to be implemented in support of the UK’s energy industry. Additionally, it has been noted that there currently needs to be a timeline in place for the projects detailed in the government policy documents, including CCUS.

The EIC stressed that the scale of these announcements needs to be revised to counter major green energy initiatives by the United States and Europe and does little to encourage businesses to stay in the UK. Highlighting this, Neil Golding, the Head of Market Intelligence, said: “Our impression is that this [the announcement] is underwhelming in terms of scale and clarity and does not appear to add anything new. The lack of clarity is causing uncertainty for supply chain businesses across the energy industries.”

Continuing, he firmly stated: “There appears to be very little new in the announcements made today, more a rebadging of previous announcements. The supply chain is continually waiting for new pipelines of projects to develop. However, we always seem to fall short of setting timescales and clear objectives. This means that we are failing to seed and root our supply chain in the UK.”

The announcement seemed to underappreciate the significant contribution of the oil and gas supply chain to the UK’s energy security and economy, as well as its role in the transition to cleaner energy sources.

The EIC welcomes an open dialogue with the UK Government to discuss how we can work together to develop more robust and sustainable policies for the energy sector.

Neil Golding Head of Market Intelligence EIC

With today’s statements, the government aims to deliver almost half a million new green jobs by 2030, supporting a shift towards cleaner energy sources to power more of Britain from within the country.

Reaffirmed commitments but no new investment

The plan includes reaffirming a previous commitment to Carbon Capture Usage and Storage, the launch of a £160m fund to support port infrastructure projects for floating offshore wind, the backing of green hydrogen production projects and £380m investment in EV charging points.

Many had hoped that this would be the UK’s response to the Biden administration’s Inflation Reduction Act, which has already prompted some of the EIC members to explore the American market as a more viable option, according to the association.

Vysus Group’s SVP Commercial, Malcolm Cameron, said: “We are acutely aware of the challenges associated with achieving our net zero ambitions in the UK. We need to ensure investors have confidence in the UK energy sector if we are to have any chance of speeding up the energy transition and closing the gaps to meet our global targets.”

He added: “While we would have to say these measures do not go far enough, anything that the government can implement to accelerate a cost-effective, balanced transition to a lower carbon economy through clean and sustainable technologies whilst acknowledging the role hydrocarbons still have to play in our energy mix, is to be welcomed.”

The government made no reference to an anticipated reduction of the Energy Profits Levy, which has already reduced investments in the North Sea.

“Various projects and commitments that would have otherwise been awarded to the supply chain were postponed or withdrawn entirely as operators revised their plans and reduced spending in response to the windfall tax, which left them with less available cash,” said John Petchey, EIC Membership Manager for Scotland and Northern Ireland.