ABERDEEN, Scotland, July 18 (UPI) -- A British energy entity established to champion the offshore industry said diversifying into the wind energy sector is necessary for long-term growth.
"While oil and gas remains the dominant energy industry in the UK, companies are quickly beginning to realize the vital role that offshore renewables will play in the future energy mix," Neil Gordon, chief executive of Subsea U.K., said in a statement Monday. "Offshore wind is a growing market which presents exciting new business opportunities for the U.K. supply chain."
The industry body, which represents the business interests of more than 300 entities, said it expects offshore wind to be the target of as much as $275 billion in new spending over the next 10 years. The spending forecast for renewables comes as North Sea investors are making preparations for a potential decline sparked by field maturation and lower crude oil prices.
Oil prices are down about 50 percent from 2014 levels, leaving energy companies with less capital to invest in exploration and production. A report from Oil & Gas U.K. warned exploration activity offshore was at an all-time low and there were no signs of improvement. Less than $1.4 billion in spending on new projects is expected in 2016, compared with an average of around $7 billion in the past five years.
In contrast, Subsea U.K. said the region is ripe for offshore wind energy breakthroughs, with as much as 90 percent of the installed capacity deployed in Scottish, Danish and German markets. Combined with Belgium and the Netherlands, the region is expected to represent about a quarter of the planned capital expenditures in offshore wind.
Nine countries that share a border with the North Sea -- Belgium, Denmark, France, Germany, Ireland, Luxembourg, the Netherlands, Norway and Sweden – agreed last month to improve infrastructure to support offshore wind.
In a recent report, the European Commission found better connectivity and coordination in the regional offshore wind market could lead to up to $5.8 billion in savings.
"If we can help companies to access the offshore wind market ahead of the predicted $275 billion global deployment boom, exporting their wealth of skills, innovation and experience, the rewards will be huge," Gordon said.
