Offshore Energies UK’s (OEUK) most recent economic report states that the UK’s energy security, economic resilience and transition to net zero are increasingly dependant on maintaining a strong domestic energy sector.
The report warns the ongoing conflict and tensions in the Middle East have increased volatility across global energy markets, with disruptions to supplies through the Strait of Hormuz pushing oil and gas prices up.
OEUK says that the UK’s resilience on imported energy is a growing strategic risk. Imports now meet more than 40% of the country’s energy needs as oil and gas account for around three-quarters of energy consumption.
There is concern surrounding the competitiveness of the UK industry. Industrial electricity prices reached 24.91p/kWh in 224 compared with 11-15p/kWh among several G7 countries.
OEUK argues that reducing energy costs and strengthening domestic supply chains will be essential to prevent further deindustrialisation and retain investment in the UK.
The report does however claim the offshore energy sector remains a contributor to the UK economy and estimates oil and gas, wind, carbon capture and hydrogen collectively support round 245,000 jobs and £36.7 billion in annual GVA.
It also argues that replacing the Energy Profits Levy (EPL) with the proposed Oil and Gas Revenue Levy (OGRL) next year could generate an additional £14.9 billion in tax and payroll revenues over the next decade.
Overall, OEUK is calling for a more integrated offshore energy strategy, combining all offshore sources to support jobs, investment and provide infrastructure and skills needed for the UK’s energy transition.
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