The United Kingdom’s offshore energy industry has been a success story for over 50 years. Its commitment to achieving net zero by 2050 (2045 in Scotland) has meant an opportunity to reposition itself as a world-class, multi-energy hub. 

Although the destination has long been clear, the route towards it still needs urgent definition. While there is consensus across stakeholders (including governments, politicians, industry organisations, and economic development bodies) that a “just and fair” transition is needed, a far more agile and joined-up approach is required to address how the country can best secure its energy ambitions while also addressing the cost-of-living crisis, managing energy security, and delivering on the net-zero agenda. Some fundamental questions must be answered.  

First of all, what does a “just and fair” transition for the offshore energy industry look like, and how will we know when it has been accomplished? According to the United Nations, a just and fair transition means “ensuring that no one is left behind in the transition to low-carbon and environmentally sustainable economies and societies.” In the context of the United Kingdom, this could be further defined by linking it to sustaining the country’s 154,000 direct and indirect offshore energy industry jobs, maintaining the supply chain, and sustaining the offshore workforce’s economic contribution at 2023 levels. 

Secondly, how do we get there? The answer inevitably lies in a permutation of three central factors: the extent of investment in renewable energy sources, the degree of British content associated with this investment, and the rate of decline in oil and gas production. British content is defined as the percentage of products or services made or provided by a domestic supply chain and delivered by a British-based workforce (rather than being imported). 

To sustain the offshore energy workforce at 2023 levels, the United Kingdom must deliver close to 40 GW of installed offshore wind capacity and up to 40% of the investment needed to achieve this to be spent in the United Kingdom by 2030. 

In Delivering the United Kingdom’s Energy Future – Pathways to a “just and fair” transition, Robert Gordon University analysed over 6,560 pathways for the United Kingdom’s offshore energy industry between now and 2030. A pathway highlights what needs to be done, when, where, and by whom, and is a roadmap to deliver a “just and fair” transition. The report concludes that political decisions, rather than energy market economics, will determine the size of the workforce and supply chain. 

Of the thousands of pathways analysed, fewer than 15 (or less than 0.3%) meet the “just and fair” transition principles. Even these limited scenarios require the renewables sector to achieve higher levels of ambition through billions of dollars of additional investment over the remainder of this decade. However, when combined with an accelerated decline in oil and gas production and the consequential loss of jobs and skills, the number of viable pathways is reduced to fewer than five. 

The report also reinforces the need for urgent alignment across the political spectrum to agree on the short-term actions that will deliver a “just and fair” transition and the associated economic benefits for the country. To sustain the offshore energy workforce at 2023 levels, the United Kingdom must deliver close to 40 GW of installed offshore wind capacity (compared to about 15 GW of cumulative capacity in 2023) and up to 40% of the investment needed to achieve this to be spent in the United Kingdom by 2030. 

Delivering the United Kingdom’s Energy Future further highlights that the ongoing decline in the oil and gas industry needs to be offset much more rapidly by both identifiably greater levels of activity and higher levels of British content in renewables if any of the pathways to a “just and fair” transition are to remain open. Otherwise, interim steps will need to be taken to address the decline in activities (including oil and gas production, which is currently expected to reduce by more than 40% by 2030) to retain the United Kingdom’s world-class offshore energy workforce and sector-leading supply chain as well as to sustain the economic contribution from the sector. 

The analysis indicates that close to 1 in 220 of the working population in the United Kingdom are currently employed in or support the offshore energy industry, compared to 1 in 30 in Scotland.

To achieve this outcome, the United Kingdom’s offshore energy sector needs to deliver on spending of up to USD 260 billion over the remainder of this decade across offshore wind, hydrogen, carbon capture and storage (CCS), and oil and gas projects. Almost 50% (USD 130 billion) of this is still subject to approval by operators and developers and is therefore not a given.

The Robert Gordon University analysis indicates that close to 1 in 220 of the working population in the United Kingdom are currently employed in or support the offshore energy industry, compared to 1 in 30 in Scotland. The numbers for the northeast of Scotland are even more stark, with 1 in 5 of the working population in this region currently directly or indirectly employed in the offshore energy industry. 

If there are delays in delivering the United Kingdom’s renewables ambitions, if activities are scaled back, or if the nation isn’t able to scale up British content, other activities (including oil and gas) may need to be sustained over the remainder of this decade to meet the specific objectives of retaining key skills and capabilities and ensuring a just and fair transition for the country’s offshore energy workforce and the supply chain.  

There is still a unique opportunity to repurpose the North Sea as a world-leading multi-energy basin that powers the United Kingdom for decades to come, but decisive action is required now to achieve this and, in the process, to realise a just and fair transition. 

Professor Paul de Leeuw is Director of the Energy Transition Institute at the Robert Gordon University in Aberdeen, United Kingdom.