Looking around the room as I stood up to present at a recent Scottish Renewables Forum event in Aberdeen, I was disappointed but, frankly, not surprised by the lack of subsea oil&gas industry people.
Yet there is a huge opportunity for the UK subsea oil&gas sector to show the marine renewable industry a thing or two and, in the process, capture a sizeable chunk of the global renewable energy market.
There is a window of opportunity for Britain to lead the way in marine renewables, but that window is already closing, and if we are going to do anything about it, now is the time to get moving. Joined-up thinking and immediate action are required.
The subsea oil&gas sector already leads the way around the world with a wealth of experience, expertise and technology. The challenge is that our market continues to grow, as do our exports.
UK Continental Shelf production may be in decline, but subsea is becoming an increasingly important element, particularly in challenging deepwater projects, where we are performing really well.
The outlook is good for at least the next decade, albeit in a very competitive marketplace with onerous factors driven by safety, working environment, extended service requirements and exotic materials.
All of these determine the cost, not supply-chain efficiency, as is being often suggested. Standardisation has played a strong role in reducing cost and risk. Certain one-off projects may still require one-off solutions but, in the main, major subsea components are predominantly common modules, such as trees and controls, and can be reused across projects and clients.
However, skills remain an issue and, even in today’s current climate, labour will not come cheaper as the market has too few skilled engineers, and the levels of supply and demand will continue to reflect a higher salary for engineering personnel in the marine and subsea sectors.
If we turn to the renewable market, we see different patterns. For a start, the industry is still immature and has only begun to scratch the surface in terms of potential. Activity levels in the UK are low and imported expertise and services are high.
We need to carefully consider what it is we want from marine renewables – energy is one aspect, but we could have a global centre for technology and products, too. This will only happen, however, if there is a supply chain and product to sell.
There is a little more UK activity in terms of offshore wind, with some UK-based innovation to enable the installation process.
We need to start to think about enablers rather than necessarily trying to do everything – not that we do, as 90% of what is needed is imported. There is, especially, a niche opportunity for our subsea expertise, experience and products. Aberdeen company Subocean demonstrated by winning a Scottish Renewables Green Energy Award in December.
Looking to deepwater wind, it would appear that even Norway has stolen a march on us with its Hywind development. We may still see some work come through the UK on the construction side, but the intellectual property will reside in Norway.
With our knowledge of spars, I am at a loss to understand how we missed that opportunity, and the same thing will happen again unless we get smarter and grasp the initiative early on.
There are valuable lessons to be learned from how we started our subsea oil&gas success story in the UK.
Firstly, collaboration with other sectors was key. We worked with the defence and oceanographic industries to use the expertise that existed, adapting it to fit the requirements of oil&gas.
This was, in effect, a two-way street, with all parties benefiting from the capability and equipment developed.
We used international contacts to gain experience and find work in other regions using skills that were there.
We established an overall project base that created revenue, and we used innovative enablers to command a bigger position.
Our work was based on tangible projects, not nebulous energy targets, and we chased the lower hanging fruit to get started. The tougher challenges that followed were then easier to overcome.
In short, we created a supply chain that functioned well with all the major parts, including safety, capacity, skills and tools, to deliver. Our current subsea supply chain is large and strong and can handle pretty much anything.
There are codes of practice to make business easier; an understanding of how to do things safely and efficiently, and design standards to make sure things fit together and work – and both safety and operability come as standard, too.
Safety is going to be a major issue for marine renewables. Just as the oil&gas industry is judged on it, the renewable industry will be, too – make no mistake about it.
People’s lives will literally depend on how equipment is designed, installed and maintained. I am not convinced that the importance of this is fully understood in the renewable sector yet.
Specific issues arise when working underwater; the whole safety mindset has to change.
Reliability also impacts on safety – more repairs mean more exposure to risk, and things can go badly wrong if safety is not considered when designing equipment, installing it, operating it and maintaining it.
A lack of awareness of safety issues and competency will expose people to hazards. The subsea oil&gas supply chain has matured to deal effectively with these issues.
This valuable supply chain needs to be transferred to the renewable energy market, and it is something that Aberdeen Renewable Energy Group (AREG), in particular, is working on.
As AREG has preached these several years past, effective collaboration between the subsea oil&gas sector and the renewable energy industry in the UK to deliver a collective approach to marine renewables must be a priority.
Sadly, right now, there is little evidence of any meaningful collaboration. The misconceptions and poor attitudes between the two industries must be addressed.
On the one hand, the renewable energy lobby almost delights in its portrayal of the demise of the hydrocarbon industry, and on the other, increasing global demand and significant money being made, alongside a perception that there is no margin in renewables, act as a barrier to entry for the oil&gas supply chain.
Neither position is defensible or productive and this pointless debate has consumed energy that could be put to far better use.
We should not be reinventing the wheel and trying to spawn a whole new industry supply chain. We have the skills and the technology to be a world-leading force in marine renewables.
However, with the current global demand for subsea oil&gas, and therefore high activity levels, there is not much incentive to engage with marine renewables.
If Britain is serious about achieving a more sustainable balance of energy, and if we want to see consumer energy prices driven down, then we must be serious about our approach to marine renewables.
The time for debate is over; now is the time to act for the sustainable future of the subsea industry and the UK’s energy supply.
A focus for Subsea UK in the coming months will be to act as a catalyst in bringing the two sectors together.
We aim to facilitate discussions between industry leaders to focus on identifying the real opportunities in terms of subsea developments, securing commitment from the parties involved and making the first major development happen.
We will also increasingly look to Government to support our renewable agenda. But we must act now or we will miss the boat and spend the next 10 years wondering how we could have let it happen.
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