Following a turbulent 2020 and the focus on a "Green Recovery", the energy mix is now at the forefront of many oil and gas company agendas with operator and supply chain companies recognising that diversifying is essential to ensuring the longevity of their businesses. Existing North Sea infrastructure, along with the knowledge and skills base of the industry, means that oil and gas companies are well placed to develop carbon capture and storage ("CCS"), hydrogen, and offshore wind projects. While some companies are already involved in planning such initiatives, many are keen for the industry to move from planning to delivery.

The latest UK Government announcement in relation to green recovery comes in the form of a high level 10-point plan aiming to achieve net zero greenhouse gas emissions by 2050. With the UK in the spotlight over the next 12 months in advance of COP26, does the plan serve as an effective catalyst to move from project strategy to delivery?


The plan confirms that £1billion will be invested into the CCS Infrastructure Fund (established in March 2020) supporting four industrial clusters to be established by 2030. As CCS is viewed as critical to net zero, this increased recognition (along with the plan's investment announcement) may well make CCS an attractive option for many North Sea operators who have already identified existing platforms, pipelines and historic wells which can be adapted for CCS use.

There are currently several CCS projects at different stages of development throughout the UK. BP and its co-venturers (Eni, Equinor, National Grid, Shell and Total) are in the process of developing projects in both Teesside and the Humber, demonstrating commitment from several oil and gas super-majors. However, until there is more clarity on business models and detailed policy (which is expected to take until at least 2022), it is unlikely that companies without deep pockets will be able to meaningfully commit to such projects.


The plan commits £240million of investment into a net zero hydrogen fund with the aim of 5GW of low carbon hydrogen production capacity by 2030. This is a positive step, but initial feedback is that more is needed – for example, further investment (each of Japan, South Korea and Germany have invested billions in hydrogen), and details on how hydrogen will be developed on a national scale. Furthermore, a scaled roll out of hydrogen will depend on the successful use of technology. While the plan's investment will assist companies in technology development, clarification on how the Government intends to support the creation of sound investment conditions would be helpful.

Hydrogen projects have already commenced in the Dutch sector of the North Sea, with Neptune Energy teaming up with Gasunie on plans for the world’s first offshore green hydrogen project; PosHYdon. This is a notable move with the aim being to gain experience of integrating working energy systems at sea and the production of hydrogen in an offshore environment. It is hoped that learnings from this project will be brought to an equivalent project in the UK. Along with increased investment in hydrogen and more comprehensive models being developed, regulatory alignment will also be needed to stimulate projects in this area. For real success, this should be done simultaneously across all energy types.

Offshore Wind

The plan aims to turn the UK from one of the leaders in offshore wind to the "Saudi Arabia" of the sector. The target is for 40GW of offshore wind to power every home in the UK by 2030.

One of the UK's flagship wind projects, Dogger Bank, is an innovative partnership between Equinor and SSE renewables and has been years in the making with the development first announced in 2019 and transportation and installation of the turbines due to take place in 2023.

While the UK has significant experience in onshore wind development, in order for this ambitious target to be met (and at pace), detailed commercial models along with conditions which allow the scaling up of floating offshore wind projects (for example, the setting up of a grid between oil and gas platforms and offshore wind farms), will be vital.


The plan is intentionally brief; however, an energy white paper and a Net Zero Strategy are expected by the end of 2020 which should contain further detail. Comprehensive policy backed up with realistic, tangible business models will allow commercialisation and scaling up. Real-life successful projects will be the most reliable evidence to factor into such models. For now, it seems that only the big players have the appetite and security to commit to the delivery of new energy systems, with more detail and assurance required to enable other companies to commit to such large-scale projects.

Nonetheless, this is a step in the right direction and sends a clear message of the UK Government's intent. The plan will certainly have an impact on oil and gas companies and their strategic plans as they face the brave new world of 2021.


Clare Munro