UK Energy Policy - Driving the Transition

UK ENERGY POLICY Driving the Transition

Large-scale electrification will be required to support the more significant emissions reductions. This requires a more concerted effort from industry, government and regulators and is one of the key components of the NSTD. In particular, rapid development of the offshore electricity transmission network is needed in the early 2020s, accompanied by reforms to the regulatory framework to ensure competitive supply of electricity to offshore users. The commitment expressed in the White Paper to tackle regulatory and policy barriers to the use of clean electricity, such as offshore wind, for powering offshore oil and gas facilities is therefore appreciated. A key issue identified in the Energy Integration report coordinated by OGA, is the need for an overarching framework to bring together the various regulatory bodies onshore and offshore. Access to affordable sources of electricity is of central importance to the viability of the proposed electrification projects. Electrification means that operators will move from a situation of producing their own electricity to being a customer of another provider which could be accessing supplies from the wholesale power markets in the UK or elsewhere. Offshore electricity supply is currently subject to class exemptions which could be extended to support electrification projects. 12 Another potential intervention would be the extension of the exemptions already provided to many other energy- intensive sectors to the oil and gas sector. 13

Some additional support to major decarbonisation projects (both on and offshore) may also be required where the capital costs of converting existing assets are particularly high.

12 https://www.gov.uk/government/consultations/exemptions-from-the-requirement-for-an-electricity-licence-call-for-evidence 13 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/942616/CFD_RO_FIT_Exemption_ Guidance_Revised_December_2020.pdf

March 2021

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