Climate action must enter DNA of oil and gas industry

Malcolm crop 2

Malcolm Brinded CBE FEI, President of the Energy Institute

There’s an elephant in the room of the global energy system and it’s called natural gas. It looks like a golden age for gas in many ways, with unconventional production soaring and global liquefied natural gas (LNG) trade forecast to more than double by 2040. But at the same time the world has committed to keeping global temperature increases within 2°C, requiring net zero emissions in the second half of this century.

Even natural gas’s cleaner-than-coal and friend-to-renewables advantages will not be enough to square this circle. For it to fulfil its potential long-term role in the future low carbon world, more must be done to clean up how it is produced and how it is burned.

At last year’s International Petroleum Week in London, the UNFCCC’s Patricia Espinosa applauded action to tackle greenhouse gas emissions by some in the oil and gas industry, but called for it to enter the DNA of all.

The International Energy Agency has since assessed that much more could technically be done during production and distribution to reduce leakage of methane, a greenhouse gas 28–36 times more potent than CO2 over 100 years, to a large extent at net zero cost. Further, it suggests that one of the reasons why this potential exists is lack of awareness.

So the Energy Institute, which works closely with its members and partners to ensure energy is produced safely and securely, decided to gauge this awareness by surveying the views of professionals working in oil and gas around the world.

Could it possibly be the case that awareness and behavioural – not just technological – issues are holding back progress towards a viable, long term role for natural gas in the future low carbon energy system?

Most respondents are bullish about the role of natural gas through to 2050. They expect it to still play a major role across the heat, industrial and power sectors, but also in transport, where it currently plays only a minor role. Such growth is expected to be partly due to conversion to hydrogen – and inevitably will come at the expense of oil. Much of this use of natural gas is expected to be abated, particularly in the electricity sector. While this is an encouraging assessment, a gap still exists to achieve the ambition set out in the Paris Agreement.

Oil and gas professionals take a largely positive view of the potential to tackle carbon emissions from combustion. Those surveyed believe carbon capture and storage (CCS) has the greatest potential of any technology to reduce emissions in the natural gas lifecycle. Of those working in potentially relevant organisations, just over half report that their organisations are active in advancing the CCS case. It is likely that moving from a few demonstration projects to full-scale implementation will require much more widespread policy support. However, nine out of ten respondents believe that industry has a role to play in developing and implementing CCS, with half of these emphasising the need for government-industry cooperation.

But on methane leakage during production, the Institute’s findings are less encouraging. Too many professionals underestimate the significance of fugitive emissions, and the possibilities for reducing it cost effectively. Two thirds of respondents expressed surprise at the extent of the problem and these possibilities.

This lack of awareness around methane suggests a significant opportunity may be being missed by the industry within its own operations – an opportunity that is likely to be very cost-effective compared with other greenhouse gas reduction measures.

The Energy Institute, as the sector’s independent professional body, is here to help address the realities of the energy system. In most scenarios gas has a significant and positive role to play for decades into the future. Similarly, the evidence around climate change, and the need to avert its worst impacts, are beyond doubt. The solution to this particular elephant will be technological, but must also be behavioural.

The Institute’s findings are a call for action across the industry to make ‘the best’ ‘the normal’. Just as health, safety and environmental protection are now embedded in operating cultures, tackling climate change in all ways needs to become equally – and profoundly – part of business-as-usual. It is central to our future licence to operate; it must enter all our DNA.

You can read the full Future of Gas report here.

Unsung professionals putting safety first

Louise Kingham OBE FEI, Chief Executive, Energy Institute

Louise Kingham OBE FEI, Chief Executive, Energy Institute

In December the Forties pipeline system was closed, as a precaution, following the detection of a hairline crack just south of Aberdeen.

As a result, 40% of North Sea oil and gas production was shut in, and the media’s attention understandably focussed on supply impacts, prices at forecourts, and the wider market.

But that is not the full story. Look behind the headlines and there are skilled professionals working day in, day out, often in very challenging conditions, to keep our energy system safe.

In this case, although the root cause of the crack was still under investigation at the time of the writing, technicians and engineers worked in sub-zero winter weather to assess the damage, prevent any danger of oil and gas release into the local environment, and set about repair.

Thankfully, in the final days of 2017, the pipeline owner Ineos announced that repair work and pressure testing had been completed, and the system had been returned to full functioning order.

For me, this story hits home the often unsung role of energy professionals. Before any of the commercial interests that influence our industry, we find their skills and dedication guarding the real bottom line – health, safety and environmental protection.

The Energy Institute has over the decades been central to supporting the development and recognition of individual professionals; to building the body of the health, safety and environment guidance used by the sector, and to the training that helps improve practices across the industry.

Looking back over 2017, we produced more than 50 technical guidance documents – more than any previous year – helping ensure installations offshore and on are safely operated and maintained. And, as oil and gas installations in the North Sea and elsewhere near the end of their lives, our work on asset integrity and corrosion will play a vital role in their responsible decommissioning.

But there is even more to the EI’s role and ambition in the fast changing world of energy.

Around 20,000 individual members see EI accreditation as the key to a successful career, in 120 countries, across the entire energy system.

As the international community’s determination to shift towards a low carbon economy has intensified, the EI has focused on transferring its expertise and activities into the new, low carbon technologies needed to keep global temperature increases within 2C of pre-industrial levels.

You are now as likely to find EI members working in energy efficiency, low carbon finance or offshore wind, as in oil as gas.

We are home to the G+ Global Offshore Wind Health and Safety Organisation, working with nine of the biggest players to promote and maintain the highest possible standards of health and safety throughout the life cycle of offshore wind farms.

This coming year we turn our attention to energy storage, one of the most critical technologies needed to support the decarbonisation of the energy system, with guidance for battery storage operators covering fire safety, maintenance risks, disposal, and working with local planning authorities.

And we will continue to extend the international reach of our health and safety expertise, with a second health and safety forum being hosted in October in the Middle East.

Safety is paramount

Health and safety is paramount to our industry. Whatever energy sources or technologies they operate in, energy companies have a duty of care to their workforces, the wider public and the natural environment. Shareholders, too, have a heightened interest in the very best standards of operation.

There is a premium on ensuring energy supplies to the public and wider economy are maintained in line with standards, guidance and expertise developed independently, at arms length, insulated from any suspicion of commercial influence or interest.

That is what the EI has always been here for and it is why more and more energy players, from conventional oil and gas through to the most innovative renewable and smart energy technologies, see collaboration with us as central to their health and safety strategies.

Postscript

As I write the close of this column, severe snow storms have for the second time this winter hit the UK, interrupting power supplies to tens of thousands of homes. And I am once again reminded of the individuals working in the harshest of conditions to restore supplies safely and securely to the public, and proud of the Energy Institute’s role in this profession.

This blog first appeared as an article for the Feb 2018 edition of Petroleum Review.

Cognitive technology for the oil and gas industry

LNIAZI Photo 2017

Luq Niazi, Global Managing Director, Chemicals & Petroleum, IBM

Luq Niazi, IBM Global Managing Director, Chemicals & Petroleum Industries, guest writes our blog ahead of speaking at IP Week 2018, 20-22 Feb…

The oil and gas industry is experiencing the largest transition in its history, driven by changing needs and approaches to the world’s energy, transportation and manufacturing systems, as well as the changing dynamics of product portfolios, and increasing demand for greater advances in molecular science and product innovation.

With cost pressures remaining and customer expectations continuing to rise, the need for improvements across the entire value chain are seismic. Businesses are looking at new strategies to grow and differentiate. Digital transformation is opening more doors to new markets, enabling new business models across ecosystems to form and driving new levels of performance and enhanced organisational capability and knowledge.

The challenge for oil and gas companies is where best to apply digital solutions, how fast and how far to go. This will be the focus of my contribution at IP Week next month, alongside others working in this sphere.

There are four key technologies – cloud, cognitive/AI, internet of things and blockchain –  that are combining to generate this significant transformation across industries. As a global leader in services, technology, industry and R&D, IBM is spending almost all of its time focused on driving these capabilities forward with clients, partners and the wider chemicals and petroleum industries.

What we are finding is that forward-thinking industry leaders have already identified the potential of these digital enablers and are building new strategies and capabilities to address the skill gaps they have in their organisations that are required to develop the potential of digital opportunities.

To accelerate adoption, organisations will need to combine deep industry skills, digital technology expertise, research capability and a culture of continuous experimentation and learning. Together, when applied in a focused way to key business challenges, they have the potential to deliver significant innovation and improvement to both top and bottom line performance.

Focusing on cognitive technologies for the oil and gas industry, these solutions are able to process huge volumes of structured and unstructured data – from chemical formulas, to visual images and sound – to derive new levels of insight and deliver recommendations, often close to real time, to industry professionals through a portfolio of cognitive advisors.

For example, there are over 150,000 SPE reports written about experiences in upstream. The ability to garner deeper insight from all of this information can accelerate and considerably improve decision making, as well as drive increased performance.

Based on our Institute for Business Value research and our operational experience, we are seeing cognitive technologies unlocking value when applied to solving complex problems. Across the 30 plus projects we have in the chemicals and petroleum industries, we see the application of cognitive/AI initiatives as broadly being split 60% in upstream and 40% in downstream, manufacturing, supply chain and retail.

In my session at IP week I will share more details, with specific examples to show how we are helping clients further advance the adoption of cognitive technologies as part of their digital transformation journey.

Industry digitalisation is a key session at IP Week 2018, taking place on day one of the conference. For more information and the full agenda, please visit www.ipweek.co.uk

Warming up low carbon heat

Louise Kingham OBE FEI, Chief Executive, Energy Institute

Louise Kingham OBE FEI, Chief Executive, Energy Institute

Louise Kingham of the Energy Institute (EI) surveys the prospects for low carbon heat…

This is proving to be a year of symbolic firsts on the UK energy system’s road to its low carbon destination.

One weekend in March, there was so much distributed solar PV on the system that the amount of electricity demanded of the grid was, for the first time ever, lower during the day than it was during the night. In April we saw our first day without any coal power since the 1880s. And in September offshore wind projects were awarded contracts at record-low strike prices, challenging new gas on cost competitiveness.

This is the energy transition happening before our eyes, it builds on a decade of tremendous progress in the power sector, something that’s crucial as large parts of our economy will in future be shifting onto the grid.

But we have yet to see comparable milestones in relation to low carbon heat.

Heat accounts for about 40% of UK energy consumption and about 20% of greenhouse gas emissions, the majority from residential use. Reducing heat emissions is therefore non-negotiable if the UK is to reach its climate targets.

At present only about 2.5% of heat comes from low carbon sources, compared with more than 45% for electricity. The Committee on Climate Change believes UK heating must be virtually zero-carbon by 2050.

This is not for want of solutions, many of them increasingly cost effective, even in a country with such a mixed housing stock and large dependence on a natural gas distribution system for heating and cooking.

Recent work by the Energy Technologies Institute estimates for example that the UK could save up to £30 billion through the adoption of district heat networks, supplying heat to homes and businesses through pipes carrying water heated using waste heat from power stations and large-scale heat pump deployment.

The Energy Institute’s recent Energy Barometer survey found a majority of UK energy professionals foresee a gradual transformation of the sources of heat used in the UK.

While gas is expected to remain the dominant heat source, its share is predicted to decrease from 70% in 2015 to 55% in 2030. Interestingly there was significant variation between the survey’s respondents – with previous assumptions about heat decarbonisation being achieved by way of electrification being superseded by a multiple technology approach involving bioenergy, hydrogen, solar thermal, waste heat and heat pumps.

This perhaps reflects uncertainties following a period of frozen government policy. 60% of energy professionals believe policy to date on developing low carbon heat has had either a negative or negligible effect and a majority see the need for new financial incentives and mandatory standards in this area.

But despite the uncertainties, the mood of the low carbon heat industry remains confident. The upside of a challenge this big is the scale of the market opportunity, and it was clear from November’s Heat and Decentralised Energy conference, hosted by the EI and the Association for Decentralised Energy, that this industry will be the next big player in the UK energy system’s journey to low carbon.

The conference heard from a BEIS official about the recent Clean Energy Strategy, which gave renewable heat a welcome shot in the arm.

The existing Renewable Heat Incentive is already being refocussed on longer term decarbonisation options such as heat pumps and biogas. It will spend £4.5bn to support innovative low-carbon heat technologies in homes and businesses by 2021. A new £10m innovation programme will support new heating technologies in homes and commercial buildings and policy is proposed to phase out installations of high-carbon fossil fuel heating in homes not connected to the gas grid.

But more heavy lifting is needed on low carbon heat. The Clean Growth Strategy recognises the need to set out further detail, which is promised over the next twelve months. That’s an opportunity for industry, to help an interested Government fill in the gaps.

Almost ten years on from passing the Climate Change Act, the UK has so far met its statutory carbon targets. Emissions are now 42% lower than the 1990 baseline.

But from here on in the task gets more complex. Reaching the fifth carbon budget of a 57% cut by 2030, and delivering on our commitments under the Paris Agreement, will require real and concerted inroads into decarbonising how we heat our homes and power our industries.

This blog first appeared as an article for the Dec/Jan 2018 edition of Network magazine.

10 gigawatts and counting – offshore wind in the UK’s sails

Jonathan Cole, Scottish Power Renewables offshore manging director.

Jonathan Cole, MD Offshore Wind, ScottishPower Renewables

As Offshore Wind Week is marked in the UK, Jonathan Cole, Managing Director Offshore Wind at ScottishPower Renewables and Chair of the G+ Global Offshore Wind Health and Safety Organisation sees a technology in robust health.

The journey for offshore wind has been far from plain sailing. Challenge after challenge has been thrown at us. Our sector has been required to mature and industrialise a supply chain, whilst building ever more physically challenging projects, at the same time as maintaining health and safety and achieving huge cost reductions. Those waters are choppy enough, but when you also consider the volatile macro-economic, regulatory and political conditions of the last few years, it is amazing that we haven’t capsized.

Yet we have more than clung-on. In fact, the good news is that we’ve risen to meet and surpass every challenge. There is 10 gigawatts of offshore wind now in operation or construction, 8 million homes are being powered by our clean energy every year, and £30bn of private capital has been deployed. This has seen 10,000 high quality, well-paid jobs supported, many of them in parts of the country that need them the most. To top it all off, now we’re delivering at a lower cost than any other large scale low carbon source.

Shared vision is also helping to drive our sector forward. Our Fifty50 Vision is to meet 50% of UK’s electricity demands from Offshore Wind (which is around 50GW) and to create more than 50,000 new high quality jobs in the process. And this shared direction is also evident on all matters Health & Safety, which needs to be prominent in our minds as we deliver more and more challenging projects at a larger scale. The G+ group is helping to ensure that the highest safety standards originating in Britain will be exported globally, and that projects around the world can be delivered safely.

We do have more challenges ahead, but our sector has a history of turning challenges into opportunities. For example, we’ve turned the problems of an immature supply chain into an industrial opportunity, and we should view our future challenges in the same way.

Many people refer to the problems of integrating high volumes of variable generation into the grid system as we decarbonise our electricity sector. This isn’t a problem caused by offshore wind, nor is it a problem that only the UK faces. But there is an opportunity for both offshore wind and the UK to perfect the solutions. All developed nations are moving to energy systems which better correlates demand and supply of electricity, that has flexible generator technologies, as well as smart grid and storage capabilities. Maybe once we meet these challenges in the UK, we will create more opportunities for our supply chain companies to export these solutions all around the world.

The momentum behind offshore wind continues to grow even stronger. We have moved from being a niche part of the energy sector, to the backbone of our modern power system. Offshore wind continues to ride the wave of challenges it faces successfully, and the future holds much promise for our sector. The recent successful CfD auctions and continued support from Government in the Clean Growth Plan highlight that we have come a long way in a short time, but we have far from reached our peak.

Clean energy is a smart move for British exports

Malcolm crop 2

Malcolm Brinded CBE FEI, President of the Energy Institute

The Government’s support for clean energy technology is right for the planet and for Britain’s future as a global trading nation, says Energy Institute President Malcolm Brinded CBE FEI.

Climate change is a threat. It threatens the delicate balance of the Earth’s ecosystems and the plants and animals that inhabit them. And according to recent polling across 38 countries it ranks alongside ISIS as the biggest threat to security.

But can a threat also be opportunity? For UK ministers seeking to marry the need to meet ambitious carbon targets with maintaining Britain’s global economic standing post Brexit, there is certainly potential.

This was the rationale behind the Smart Systems and Flexibility Plan and the Faraday Challenge announced recently by Greg Clark, “to put UK businesses in a leading position to export smart energy technology and services to the rest of the world.”

It was music to the ears of an industry that has been waiting for a fresh sense of leadership from ministers.

Brexit and the snap election have left their mark. Clean energy investment plunged in the first quarter of 2017 to around $1bn, the lowest since 2010. Three quarters of professionals surveyed for the Energy Institute’s Energy Barometer agree with the Committee on Climate Change that meeting our 2030 carbon target will prove challenging.

All eyes are therefore on the Government’s Clean Growth Plan and Industrial Strategy and, if July’s announcements were the preamble, I am encouraged. Energy professionals rank smart grids and energy storage as the most important changes needed to develop our energy system.

Ministers are right not to be caught napping. New technologies have too often been viewed with suspicion, rather than as an opportunity to build a more efficient energy system. Smart grids, storage and interconnection could save consumers up to £8bn a year by 2030.

But this isn’t just important for our domestic goals. It’s also central to maintaining the UK’s place on the world stage through applying our ingenuity to the challenges posed globally by climate change and the pressing need for improved access to energy in developing nations – where lack of affordable and reliable energy remains a major barrier to economic and social development.

The UK has already accumulated considerable exportable expertise. But we need to be cannier about commercialisation and acquiring intellectual property if we are to grab a share of huge potential global markets. It’s estimated small scale battery storage alone will be worth $250bn by 2040.

Clean energy research, innovation and early stage technology piloting are vital. If smaller British innovators are to succeed, government funding needs to flow more quickly, calculated risk-taking is needed in backing early stage innovators and the rules of the game need to be simpler and more predictable.

The prospects seem good for the Faraday Challenge, which will I hope break the mould of recent stalled government competitions.

If we get this and other initiatives right, far from a retreat from the international stage, we could see great British invented, designed, manufactured, exported and project-managed technology right at the heart of the global green technology boom.

This blog post first appeared in Politics First on 15 September 2017

Ministers must act to attract energy investment

Louise Kingham OBE FEI, Chief Executive, Energy Institute

Louise Kingham OBE FEI, Chief Executive, Energy Institute

Brexit uncertainty is scaring off investors, and with the UK set to lose £2.5bn in European Investment Bank loans and EU funds, we need long-term policy to boost confidence.

With Brexit eclipsing all other debates, plus the hiatus caused by the snap general election, climate and energy policy has largely been on hold for more than a year. This political uncertainty is contributing to a risky investment climate in energy and it’s affecting immature low-carbon technologies most acutely.

I hear this message frequently from senior figures across the industry, and it’s reflected in the recently published Energy Barometer survey of Energy Institute (El) members, who rank Brexit-related uncertainty among the five most pressing concerns.

Due to its complexity, investment lead times and the potential loss of EU funds, energy is in critical need of an effective, clear and far-sighted government strategy.

So what’s our prescription? First, the transposition of EU energy legislation into UK policy post-Brexit must be a top priority for the government. Retaining energy-related EU directives in UK law across the system, from air quality and emissions controls, to regulations on energy efficiency and renewable energy is a clear preference. Only in the case of state aid rules would most El members prefer to change or abandon the legislation.

Second, we need continued cooperation and resource sharing with European counterparts. Britain may be an island, but even post-Brexit. it would be a mistake to treat the energy system in that way. While most of our members surveyed view the UK as an appropriate level for policy decisions in the areas of energy security, energy efficiency, research and innovation, and energy markets, a large minority of members feel that the EU is an appropriate level for policymaking in these areas. Perhaps the
best example of this support for continued cooperation with the EU is our concern about the planned exit from the EU atomic energy regulator, Euratom. which could negatively impact the cost and delivery of new nuclear projects as well as the supply chain in the UK.

Third, we need to see government efforts to ensure a sufficient supply of workers to the industry, prioritising engineers as well as qualified and unskilled manual workers. Nearly 60% of Barometer respondents expect a fall in the number of skilled workers, and more than 40% foresee a drop in qualification levels if free movement of labour is curtailed after Brexit. Mitigating measures should include training to facilitate transition from other industries, providing apprenticeships and vocational courses, encouraging closer cooperation between academia and industry, and allowing immigration of skilled labour.

Finally, clear and long-term government policy that boosts investor confidence in specific technologies and the system as a whole is critical. Bloomberg New Energy Finance reports investment in clean energy plunging in the first quarter of 2017 to around $lbn, the lowest since 2010. It was encouraging to see the recent publication of the government’s smart systems and flexibility plan, but ministers still need to press play in other key policy areas and. in particular, deliver on the much-delayed clean growth plan and the evolving industrial strategy.

Clear and long-term state policy that boosts investment confidence is needed as the UK will lose EU funds and European Investment Bank loans, which account for around £2.5bn of the UK’s energy-related infrastructure, climate-change mitigation and R&D funding per year.

Replacing EU funding will be a challenge if domestic spending constraints are maintained, and should be a central focus for the government’s industrial strategy. Support for energy infrastructure and R&D should flow from the National Productivity Investment Fund, alongside indirect incentives such as tax breaks for R&D and support for academia-industry collaboration.

Getting both energy strategy and the post-Brexit relationship with the EU right will determine how we successfully deliver a secure, clean and affordable energy system, vital to sustaining our economy and society.

This blog first appeared on ENDS Report online on 11 August 2017

Could Clean Energy Be Brexit Britain’s Get Out Of Jail Free Card?

 

Malcolm crop 2

Malcolm Brinded CBE FEI, President of the Energy Institute

In Whitehall, Ministers and their advisers are wrestling with a policy conundrum like no other. It’s one that will be make-or-break for the UK economy. And it will define the UK’s standing on the world stage for decades to come.

But it’s not Brexit I’m talking about. It’s how to set the UK on course to climate change leadership and to leverage that as a central plank of our industrial growth strategy.

Almost ten years on from passing the Climate Change Act, the UK has so far met its statutory carbon targets. Emissions are now 42% lower than the 1990 baseline.

Coal use has bombed as quickly as the price of renewable energy technologies. There can be days now on which coal plays no role in the UK. Wind and solar provided 14% of the UK’s electricity last year; on some days, this can double.

While some mistakes have been made, and the cost of subsidies has never been far from the headlines, this progress has been achieved in parallel with economic growth – in fact GDP has grown by 60% over the same period.

But you don’t need to look far into the future to see trouble ahead.

Ministers have accepted an emission reduction target of 57% by 2030 but have so far offered no means of achieving this. Aside from giving a costly government guarantee for Hinkley Point C nuclear power station, policy has largely been on hold since the Brexit vote.

More than three quarters of the Energy Institute’s professional members, surveyed for the annual Energy Barometer, currently believe the UK will fall short of this target.

But a Clean Growth Plan is expected to be published within weeks. And it couldn’t be better timed. As the UK faces the economic realities of Brexit, clean energy could just become the ‘get out of jail free’ card the country needs.

The same Energy Barometer points to two big opportunities that must be grasped.

First, being smarter with energy would significantly increase the resource efficiency of UK plc.

Energy efficiency is the lowest hanging fruit but it remains the neglected Cinderella of energy policy. Energy Institute members don’t only see it as a priority for meeting emissions targets, they also rate it as lowest risk in terms of investment, and believe it offers the biggest opportunity for the UK’s future economy.

Britain’s homes and commercial properties still offer significant scope for smarter use of energy and the Conservative manifesto promised an industrial energy efficiency scheme to help large companies reduce their energy use.

Greater resource efficiency can only be good for the competitiveness of an economy in which productivity is some 18% below the OECD average.

Second, clean energy innovation could offer a major trade dividend for post Brexit Britain.

Technology transformations often take a long time to arrive – and then move at high speed. All too often in the UK they’ve been treated with suspicion until it’s too late and the commercial advantage has gone elsewhere.

Energy Institute members believe the UK should support emerging clean energy technologies – such as smart technologies and energy storage – at an early stage, capitalising on the UK’s strengths in research, academia and our ability to nurture technology-based start-ups.

The UK has already accumulated considerable exportable expertise. But we need to be faster at commercialisation and better at protecting intellectual property to grab a share of huge potential global markets. Small scale battery storage alone will be worth an estimated $250bn by 2040.

And whilst energy demand plateaus in the OECD, there is still a huge need to improve access to energy in developing nations – which will more than double the energy they source from renewables, gas and nuclear combined by 2040 – all fields where UK capability is already significant.

Clean energy research, innovation and early stage technology piloting are vital. If smaller British innovators are to succeed, government funding needs to flow more quickly, calculated risk-taking is needed in backing early stage innovators and the rules of the game need to be simpler and more predictable.

Withdrawal from the EU block, with whom we committed to the Paris Agreement, must not mean a retreat from Britain’s climate ambition.

Now is the time to plant the seeds from which the UK can develop substantial domestic supply chains and become one of the world’s leading exporters of clean energy skills, services and products, helping to improve access to energy in developing nations and building the global low carbon energy system demanded by the Paris Agreement.

This blog post first appeared on HuffPost on 31 August 2017. 

Women on boards is a business imperative

Alex Chisholm

Alex Chisholm, Permanent Secretary, BEIS

As POWERful Women turns three, the man in charge of the department responsible for energy commits to reaching parity between men and women within his senior ranks by 2025 and calls for more change in the sector’s boardrooms.

When I first joined the civil service over 25 years ago my boss was a woman, her boss was a woman, and her boss’s boss was a woman too. In the early 1990s, this was unusual even in the civil service. In the present day, would anyone find that notable? In the modern civil service, probably not. But in the energy sector? Yes, even today. Very unusual.

Since government and business launched the Women on Boards initiative in 2011, the percentage of female directors in the FTSE 100 has more than doubled from 12.5% to 27.3%.

Unfortunately, research undertaken by POWERful Women and PwC shows us that very little has changed in the UK energy sector, which continues to lag behind at 9%.

PWCs ‘Igniting Change 2’ report shows us that only 6% of UK energy firms sampled had female executive board members (it was previously 5%), which is a fifth of POWERful Women’s executive board level target of 30% by 2030. The proportion of female board executives across key energy sectors also remained unchanged (nuclear at 8%, oil and gas at 7%) with the exception of power and utilities which has risen by 1% to 18%.

Energy companies are clearly some of the worst offenders.

That’s why it’s so important that organisations like POWERful Women exist and I salute the other movers and shakers behind this network. Independent accountability, bringing together research and best practice, is central to creating change.

I am sure for most people this is a moral and social imperative. But it is also a business one.

The McKinsey ‘Diversity Matters’ report, proves that diverse organisations perform better. A bigger talent pool, improved employee engagement, improved understanding of customer base, improved decision-making and problem-solving.

Within the civil service we understand how important it is to reflect the public we serve. The civil service is 54% women and four departments are 50:50. But overall only 40% of Senior Civil Servants are women. This is why it is a focus area for us and my department has pledged to reach 50% women in the senior civil service by 2025.

We will achieve this upturn in diversity by continuing to focus on areas such as improving recruitment practices (for example, no all-male interview panels), targeted talent schemes, mentoring and reverse mentoring and ensuring development opportunities are based on merit.

Finally, to the two most important groups involved in this battle for change.

To aspiring women in energy – this is your sector, your organisation, your project. Have confidence in yourself and your abilities, we need you here. If there are things that need to be changed, be a part of that change. It’s never easy to challenge the status quo but there are people out there who will help you. Get a mentor, get a sponsor too – someone to advocate for you. Take the development opportunities that are offered to you.

And of course, leave the ladder down. Make sure that’s a ladder that can be climbed by every type of woman.

To those in charge of energy companies – this isn’t easy, it takes a lot of sustained effort and it doesn’t happen without being brave. Women are 50% of the population, and not only deserve to represent 50% of your business at all levels, but need to be there in order for you to be the best that you can be.

If you are a leader of an energy company taking steps on women’s equality and facing some challenges – I applaud you. If you’re lagging behind – buck up! This is a priority for every progressive leader today.

Your workforce, your customers and your peers are watching. This matters to them as it should to you.

This blog post is based on a speech given by Alex Chisholm, Permanent Secretary, Department for Business, Energy and Industrial Strategy at the POWERful Women 3rd Anniversary Reception at the House of Lords on 15 June 2017.

Read more about POWERful Women here: www.powerfulwomen.org.uk

UK is no energy island

Steve Holliday

Steve Holliday, Vice President of Energy Institute and former CEO of National Grid

Red flags have this week been raised by engineers and other professionals who work to provide a reliable supply of energy to our homes, workplaces and roads, that energy must be a serious priority for Messrs Davis and Barnier at the negotiating table in Brussels.

During my decade at the helm of National Grid I was acutely aware of the interconnected nature of the UK’s energy system. As an island nation we enjoy enormous indigenous energy resources. But the efficiencies available through trading energy with our European neighbours offer huge benefits to consumers, the resilience of our economy and the environment.

We are physically connected. Vital electricity cables lie on the sea bed connecting the UK to France, Ireland and the Netherlands. Gas pipelines link our system to Belgium, Ireland and the Netherlands. About 5% of the UK’s electricity is imported from the EU, and 38% of its gas.

Interconnection is the most tangible manifestation of collaboration with our European neighbours in the energy sphere. There are many others – standards on cars and kitchen appliances; targets on renewables energy efficiency and carbon reduction – these provide a level playing field for mutually beneficial gain.

Membership of the EU is not essential to a fruitful relationship with European neighbours – after all Norway provides up to a fifth of the UK’s gas – but what will be complicated is disentangling decades of carefully crafted market integration and finding new mechanisms for achieving similar benefits.

So I’m not surprised that the Energy Institute’s new 2017 Energy Barometer ranks Brexit uncertainty among the five most pressing concerns of energy professionals. And those surveyed are very clear on the four big signposts for the new Government as it navigates Brexit.

First – existing EU energy laws that govern how Europe’s energy markets work should be transferred into UK policy post-Brexit as a top priority and as seamlessly as possible. Second – the UK must retain the closest possible cooperation with the EU. It would be a mistake to assume going it alone is an option – not least in the case of Ireland and Northern Ireland, who presently share a single all-Island Energy Market. Third – the Government needs to act to ensure the necessary skilled workforce is available to the energy industry, prioritising engineers in particular. Nearly 60% of those responding to the Barometer anticipate a fall in the number of skilled workers, if free movement of labour is curtailed.

Lastly, energy investors are desperate for a predictable, no-surprises policy environment. Energy and climate policy has been on ice for the best part of a year. After a decade of tremendous progress in decarbonisation in the power sector, investor confidence has also chilled. Investment in clean energy plunged in the first quarter of 2017 to around $1bn, the lowest since 2010. Add to this the potential loss of around £2.5 billion of EIB bank loans in energy each year and the need for government to defrost its strategy is critical.

That means bringing clarity, soon, through the much heralded Industrial Strategy, a Clean Growth Plan to meet our carbon reduction targets, and breaking the logjam of delayed policies.

The UK is no energy island. Energy, due to its complexity, investment lead times and importance to our economy and society, stands out as a special case among industries which are heavily integrated at the European level in need of an effective, clear and far-sighted government strategy. And it must be one that retains essential links – and future ambition – to make the most of collaboration with our energy neighbours on the European mainland.

The Energy Institute’s Energy Barometer 2017 is available here.

This blog post first appeared as an article for the Times comment online on 29 June 2017