Following COP26, there was already a major drive in the UK to reduce our dependence on fossil fuels in the UK. But with the war in Ukraine, and rising gas prices globally, a new pressure has been introduced.
In theory, recent events in Ukraine reinforce both current UK energy security policy (and energy independence) and the drive for decarbonised energy system by 2035. So why has the UK just opened a new licensing round for companies to explore for oil and gas in the North Sea, with as many as 100 licenses awarded?
Well, in the UK governments Net Zero Strategy, there is a clear target is for a fully decarbonised power system by 2035. However, as of last year, the UK uses about 40% of fossil fuels to meet its energy demand, predominatly by gas provided via UK North Sea reserves, Norway or via LNG imports. And the reality is that the UK will continue to need this supply in some way, shape or form. In its Net Zero Strategy, the UK government is clear that natural gas and oil could remain to play a part in the UK energy mix as identified in the below graph showing a high resource energy generation mix in 2050 (source: gov.uk Net Zero Strategy: Build Back Greener)
However, fossil fuel use in 2050, particularly natural methane gas, is heavily dependent on the reliability of two factors: 1) a stable and secure supply from UK controlled resource and 2) the ability for carbon capture storage to effectively store carbon generated through ‘blue hydrogen’ energy generation.
Clearly, new investment in North Sea oil exploration will only continue to support both energy security policy and the UK’s net zero ambition if corresponding investment is also made into hydrogen. Time will tell whether UK government initiatives such as its Hydrogen Investor Roadmap will provide the platform for this to happen.
At Procur3d, we understand the UK’s energy challenges and how to prepare for future procurements. Find out how we can help your business get ready for net zero.