Nial MacCollam is a former petroleum industry technologist who made a leap of faith into the world of green energy barely a handful of years ago. Today, this one-time Exxon employee is a senior at fast-growing energy services group Senergy, of Aberdeen, and responsible for its renewable business.
In the renewable world, he is perhaps best remembered for the roles he played at Scotland’s Intermediary Technology Institute for Energy, at least for the time being.
MacCollam, who recently also joined the board of Aberdeen Renewable Energy Group, suggests that the challenges for him are well understood and debated by many of those attending All Energy in Aberdeen this week.
“It comes down to nitty-gritty issues like planning consent, grid connection and financial stability, and because renewables technologies are often at a relatively early stage of development, there needs to be Government participation and support for that,” the managing director of Senergy Alternative Energy told Energy.
“From the financial stability point of view, there need to be Government mechanisms in place to encourage and support development of projects and assets and technology.
“But often there is uncertainty of continuity of those support mechanisms, and that imposes a further uncertainty over and above what is already a very fragile financial landscape at the minute.”
According to MacCollam, for petroleum-rooted Senergy, the challenges boil down to offering the renewable world – basically the developers of projects and owners of generating assets – “insightful capabilities” to help them address the challenges they face.
“When I was formulating the strategy for Senergy Alternative Energy a little over 12 months ago, the thing I was looking for was what areas of Senergy’s oil&gas capability translate across to renewables.
“In many ways, what is going on at Senergy is almost a microcosm of Aberdeen’s quest to become an all-energy city rather than an oil&gas town.
“If you look at some of the areas of excellence in the group, such as geotechnical and geo-survey for the oil&gas industry, these same capabilities are absolutely critical to offshore wind as new territories are prospected.
“I would say also that the general knowledge and experience of operating in an offshore environment is absolutely imperative. This understanding of the basic issues that oil&gas people take for granted … it’s in their blood … about weather windows, the challenges of managing logistics and projects and putting assets into the offshore environment and then maintaining them over a 20-year life span is totally relevant.”
That said, MacCollam is also checking out other industries to see what can be garnered from those, too, with a view to reinforcing Senergy’s offering to the renewables world.
This includes issues such as parallel electrical engineering, something which comes from the power sector, not offshore.
“The acquisition of Econnect in October last year is an example of what we are doing to broaden what is already offered. It is about providing a set of integrated services that can be as effective in renewables as the company is in oil&gas.
“This is a perfect example of what the two sectors need to be doing more of. And we’re not finished; indeed, we’ve only started and so we will be making further acquisitions … integrate, build together a service package that’s tailored to the particular areas of renewables that we feel that we have some value to offer clients.
“I think it makes sense, for instance, for Senergy to see if there is an obvious partnership or acquisition to do around environmental impact assessment, which means having environmental engineering capabilities.”
But it’s not just about acquisition as Senergy has also opted for strategic alliances, where appropriate. For example, the company has an alliance with Edinburgh company Atmos – part of West Coast Energy.
“In this, we combine their environmental impact assessment capabilities with our power engineering and survey capabilities under the banner of the Offshore Energy Alliance.
“But that doesn’t mean we’re ruling out the possibility of doing an acquisition of an environmental consultancy or engineering company at some point.”
Aside from front-end new project involvement, MacCollam is also looking for lifecycle opportunities in developments, which means operations and maintenance, upgrades and decommissioning.
Senergy is going for growth, though MacCollam insists there is no ambition to become a large turnkey contracting company that does everything.
“We’re not aiming to be a KBR or a Bechtel; we’re trying to be a business that provides the smart services and clever thinking at different stages of developing projects.
“We will stretch into different parts of the supply chain if we think it’s warranted and where there is a gap that genuinely needs to be filled.
“There’s huge value in adopting that flexible approach, but we have to be very cautious about adding some of those risks and issues and doing it at a pace and scale that is realistic.
“We want to be a worldwide, diverse energy services company. How we get there, we have a pretty good idea, but it will evolve over time.
“I could imagine, for example, if there were gaps in the supply chain to the offshore wind market as it grows into a multibillion-dollar per annum business, we might stretch to getting involved in the supply chain.
“And, when we look for acquisitions, we’re particularly looking at engineering/technical companies with a particular niche or strength that is high value-added to the client.
“However, we’re not looking at areas that are commoditised with single-digit margins. We’re looking at the higher-value side of things.
“While there might be 100 or so different companies out there spanning the lifecycle of a project that we could look at, only a few would make sense to us.
“It’s all about being service-based, driven by knowledge and technical horsepower as well as commercial innovation.
“That’s the approach that we see ourselves extending into alternative energy, just as we’re expanding in oil&gas.”
So what is the scale of MacCollam’s ambition as a part of the overall group, bearing in mind that renewables currently account for about 10% of turnover?
“Five years from now, my goal as MD of Senergy’s renewables business is to drive forward with very fast growth – organic and through acquisition – to the point that we account for 30-50% of the overall group in five years.
“Would I be happy just touching 30% while the oil&gas side of the group grew as fast as it has over the first three to four years? I’d be delighted.
“That would mean growing from about £5million to about £70-80million a year for alternatives.
“So if we continued on the planned trajectory and I did my damnedest and kept it just scraping in at 30%, I think that would be a remarkable result, and I think Senergy shareholders would think so, too.
“But for me, I wouldn’t limit it at that; if we can get Senergy to 50% alternative energy, that would be a fantastic achievement.”
However the pace of alternatives growth pans out, MacCollam is keen to ensure that the company breaks conventional moulds – promotes fresh thinking.
“I would like Senergy to be the sort of company that challenges the thinking of people outside. I don’t want it to be, ‘Oh, they’re one of those tick-the-box outfits’.
“There are companies and individuals out there that find the fluid, challenging vision of what Senergy wants to be immensely attractive.
“They don’t want to be just part of a small cog in a big global engineering consultancy firm. They don’t want to be acquired as a large multinational utility’s development arm.
“They want to be part of a story that’s a bit more visionary, a little bit unclear and a lot more dynamic … where they feel that, by becoming part of that story, they will actually make a big impact on the ultimate shape of the group.
“In fact, there’s a genuine possibility that it could be one of the smaller acquisitions that we do in the next two or three years that becomes the defining moment for what Senergy becomes in 10 years. I don’t think there are many companies in the energy space that have that level of creativity and vision.”
