OEUK: Cut demand, boost UK energy production, and prepare for a clean energy revolution

The UK must launch a national effort to cut energy demand, promoting measures like home insulation, heat pumps and hydrogen, alongside maintaining its own oil and gas resources, Offshore Energies UK’s acting chief executive has said in a speech today.

Mike Tholen told an audience of energy experts that accelerating such measures was the best long-term way to cut consumer bills and reduce greenhouse gas emissions. He also said that a new licensing round for oil and gas exploration, announced this year, was key to supporting the UK’s near-term energy security.

His remarks came in a speech at the launch of OEUK’s Economic Report: A Focus on UK Energy Security, attended by more than 300 senior figures from the UK’s energy industries. The speech is set out in full below.

In the speech, at the P&J Live venue in Aberdeen, Mr. Tholen said: “Long-term management of demand is essential. Simple measures such as improving energy efficiency cannot be ignored, even if they take time to implement. 

• Insulating homes and other buildings must be a priority
• Solutions like heat-pumps should be embraced to help us use less energy,
• And electric and hydrogen powered vehicles can also cut our consumption.

“These are all known and trustworthy technologies that can not only drive down consumer bills but also cut carbon emissions. However, such changes will take years – during which the nation should also maximize the energy from offshore resources, meaning gas, oil and offshore wind.”

He added: “We must also make the most of our own energy resources.

“The North Sea still offers oil and gas resources aplenty. The North Sea Transition Authority estimates the equivalent of 15 billion barrels of oil could be accessed over time.

“And of course, opportunities for significant wind power, too – there have to be some perks to working in one of the windiest countries in Europe!

“We must maximize production in a sustainable way and continue to replenish our reserves through more exploration. We cannot delay, the clock is ticking. We need the support of regulators and government.

“That includes having the anticipated Climate Compatibility Checkpoint published as soon as possible.

“Then we need a new oil and gas licensing round – ideally announced well before Christmas. “

Mr. Tholen also called for a review of electricity tariffs. He said: “We need to take a step back and look at our energy systems and markets and see whether they are truly up to the task. In particular, we need to look at the link between electricity prices and wholesale gas prices.

“Because, our systems and markets were built for a very different time, and for very different circumstances. At present, the price of gas sets the price for the whole electricity market – even though gas generates only 40% of our power.

“This is why we are fully supportive of the Government’s ongoing current review of electricity markets. We need a tariff and pricing system that is fit for the challenges we face now, and indeed the energy landscape of the future.

“That means fit for a world where we’re moving towards low carbon and renewable sources.

“What’s more, those sources should be under our control – operating in the UK and its surrounding waters where we can take charge not just of supply but, as the proportion of low carbon generation grows, of pricing too.”

Mr. Tholen also welcomed the UK’s new government and said the offshore industry was keen do build on its existing partnerships with all the governments of the UK.  “Our first message to all politicians and parties is that whatever your politics, our industry is very definitely part of the solution.

“We’re now on the verge of an energy revolution – moving on from an era dominated by fossil fuels to one where our country runs on low carbon energy.  Our industry will play a key role in that revolution.

“But we can only do it as partners, in a long-term, stable and solid relationship with politicians of all parties – and with consumers. We need action now to make sure that revolution goes smoothly.”