Net Zero Will Make or Break One of the UK’s Wealthiest Cities

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Oil prices may be booming again, but growing demand for cheap home-grown energy as Russia’s war in Ukraine squeezes supplies is giving Aberdeen another reason to shift its focus to renewables, reports Bloomberg.

Oil prices booming again

Shell Plc Engineer Denise Neill knows as well as anyone in Aberdeen, the UK’s oil capital, that the fortunes of a city that gets its income from one source can change quickly. The daughter of a farmer, she witnessed in the 1970s how the discovery of North Sea oil transformed the lives of local people, including her father who switched to selling rock from a quarry on his land for the expansion of the city’s airport.

You had a lot of people suddenly going into businesses they’d never worked in before and within a very short space of time,” Neill, 55, said from Shell’s Scottish headquarters in the city.

Now as a deputy project manager for two giant floating offshore wind farm developments, she’s at the forefront of another transition that could make or break the Granite City. Oil prices may be booming again, but growing demand for cheap home-grown energy as Russia’s war in Ukraine squeezes supplies is giving Aberdeen another reason to shift its focus to renewables.

Transition to renewables

In the process, the city is constantly finding itself beholden to the will of politicians in Westminster and Edinburgh who regularly use the energy sector as a pawn in arguments over Scottish independence and keep flip flopping over whether they want to shut down fossil fuel production as soon as possible or keep investing until the transition to renewables is well underway. Just this year the UK government has switched from begging the industry to invest more in North Sea oil and gas in the wake of Russia’s invasion of Ukraine, to slapping a three-year windfall tax on those same companies’ profits as energy prices surged.

Decades of declining North Sea oil production and back-to-back price crashes in recent years have given residents a taste of what the future holds if they don’t make the transition. Even with oil near $100 a barrel, Union Street, the city’s main thoroughfare, is dotted with boarded up shops and restaurants.

Dan Andreson, co-owner of nearby Contour Cafe says business is down about 50% since before the pandemic because many clients worked at energy firms which have laid people off.

The city wants to turn the tide on that trend by leveraging its decades of experience in complex energy projects to turn itself into a renewables hub for the UK or even Europe. Get it right and it could hold on to its status as one of the richest cities in the UK. Get it wrong and that oil wealth could depart as quickly as it arrived.

Read more here.

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Source: Bloomberg

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