2024 – Opportunity Knocks
The new year is always a great time to take stock and set out with refreshed vim and vigour to lay out the steps towards our key objectives as individuals and businesses.
As a sector we ended 2023 on something of a high note; we had made progress on reversing some of the most damaging actions on investment attractiveness through positive moves in the UK Government Autumn Statement, had seen grid rocket up the political agenda and have averted complete disaster on some of the most worrying aspects of offshore economics.
Even one of last year’s biggest crunch moments – the halting of progress on the Boreas Windfarm – looks to be salvaged following RWE’s announcement of its purchase which came after the UK Government’s sharp industry engagement post-auction.
All good news but the macroeconomic picture remains exceptionally challenging and something as an internationally connected industry we need to be mindful of. The threat of recession still looms albeit with less confidence that it will be the destination and interest rates are still a key concern given the need for so much capital flow over a number of years. Supply chains and movement of goods are still incredibly sticky as is the issue of getting the right people with the right skills in the right place.
As we see more than half the world voting in elections next year literally anything could happen in an international picture within which climate and energy policies will remain at the forefront.
In the last two years the US has probably been the driving force in the pace of the energy transition through strong signalling to the finance and manufacturing markets via the Inflation Reduction Act (IRA). While any political change in the US could see our old adversary Donald Trump re-emerge, even he couldn’t fail to be taken with the 170, 000 jobs and massive investments in factories to build EVs, batteries, wind and solar but ideological standpoints could still prevail which presents a possible banana skin for the States. Here is where the UK’s slow and thankfully now steadier approach could prove valuable.
However, there are also many reasons to be cheerful despite these stresses and strains.
So many targets are pinned to the 2030 point and all these elections, including those in the UK sometime in 2024 and then Scotland thereafter, mean that whoever wins is in the hotseat up to and likely at that 2030 deadline. Better get moving and find some quick wins.
Conditions here in the UK are far better than when I considered the picture last year but overwhelm is the risk and what is required is clever, thoughtful, targeted approaches laser focused on building the key foundations required for success; grid in the right place and at the right pace, consenting processes with speed and predictability in-built, infrastructure handling and manufacturing zones (ports!), an open and steady flowing investment environment (which includes a refreshed CfD) and a people strategy that will tackle both skills gaps and shortages in numbers. Huge opportunities lie in a variety of areas. If we approach them with clarity of purpose and honesty about what can be achieved by when, we can use them as another way of truly selling ourselves globally as the crucible of the Energy Transition. All the while steadily growing our prowess in reinvigorated manufacturing for the energy industry and building on our success as an exporter of skills and services.
Grid is the clear space for us to use our core strengths of capability and expertise in regulation to create the transformation of both the physical and financial infrastructure.
This needs to match the change in energy inputs being fed in. That’s one of the most exciting challenges we have ahead and recent moves prove that regulation can indeed be agile and enabling.
Next, getting to grips with hydrogen. That grid infrastructure needs to work hand in hand with our plans and aspirations to continue to serve the world with energy from natural resources based in Scotland but transported and used all over the world.
Defining our role but also sketching out the reality of being a hydrogen exporting nation is crucial.
2024 will, I think and hope, see us really tackle the way in which we deploy heat pumps. The Scottish Government has set out some really game-changing plans in this space and that marks the start of grown-up conversations and about how we eat the elephant on domestic and industrial heating to ensure that we do manage to reap the benefits of the cheap power we have at our fingertips. Tidal is at a pivotal scale-up point and the leaders space is for the taking. How we ensure the deliverability of projects and support that scaling of manufacture and deployment will help us to secure that spot.
Our most recent jobs figures show the incredible boost that a firm and moving pipeline of renewables projects bring; 42,000 people being paid either directly or indirectly in Scotland to deliver clean energy, a future grid, carbon reduction and pushing cheaper energy into the UK system. My new year objective? More of that please.
- Blog by Claire Mack, Chief Executive of Scottish Renewables