The future of Norfolk and Suffolk’s energy contribution to be scrutinised

By BEN WOODS, Energy Writer Monday, March 4, 2013
10:58 AM

The opportunities and investment born from the burgeoning offshore energy sector have been well documented, but as business leaders descend on the Norfolk Showground for one of biggest energy conferences in the country tomorrow, what is the future for the region’s offshore energy sector?

The East of England is no stranger to the country’s ever-demanding need for power.

For the past 40 years, businesses across Norfolk and Suffolk have played a major role in reaping the economic potential of the Southern North Sea, from drilling for gas, to creating vast swathes of towering wind farms.

And tomorrow, the future of the region’s energy contribution will be placed under the microscope when business leaders from across the globe gather for the biggest energy event in the region: the Southern North Sea, Sea of Opportunity conference.

The two-day event, held at the Norfolk Showground, will feature dozens of key speakers from across the sector, including energy chiefs from Shell, Perenco and Scottish Power.

But as business leaders get ready to descend on the event, it begs the question: what are the future opportunities for the region’s offshore energy industry?

To date, the east’s energy sector employs more than 103,000 people, and generates more than £12.9bn – while 30pc of the country’s gas is still sourced through the Bacton terminal in north Norfolk.

And Simon Gray, chief executive of the East of England Energy Group (EEEGR) – which organised the conference – believes this “pivotal role” is likely to continue for generations to come thanks to a raft of new offshore energy projects.

He said: “The dramatic scale and attendance at EEEGR’s flagship conference shows the importance of the energy sector to the East of England and cements our regions pivotal role in keeping the nations lights on.

“Many people, including a large part of our own local population, do not realise that we are in a major industrial region.

“We just don’t realise it because the ‘factories’ (in the form of platforms and allied infrastructure) are actually a few miles off our coast and we can’t see them, but the reality is that the sector is a major employer and wealth creator for the East of England. In addition to the jobs and employment from the offshore platforms, helicopter and marine support, onshore processing and supply chain, the region also exports skills and experience around the world and it is often said that wherever you go in the world where gas is present you are likely to hear a Norfolk or Suffolk accent.

“Our experience and skill in the offshore gas industry can now also be harnessed to exploit the opportunities that will arrive as the southern North Sea sees the increasing numbers of offshore wind turbines planned off our coast.

“The next generation of offshore wind farms, such as the East Anglia offshore wind zone provides an insight into the future of the industry on our doorstep and the instrumental role the East of England could play in helping to meet security of supply, and work towards achieving the UK’s challenging renewable energy production targets. In recognising the unique opportunities that these investments will bring to the region, we must also make sure that we win the required investment in our infrastructure and here we have seen some significant progress with the establishment of the enterprise zone in Great Yarmouth and Waveney and the recognition of our region as one of the six CORE (centres for offshore renewable engineering) areas in England.

“These initiatives will help the region in attracting businesses and investment from outside of the area and assist in the development of additional employment.”

The conference comes during a period of transformation for the southern North Sea – and it is not the first time.

Since gas was first discovered off the Norfolk coast in 1965, the area has become a treasure trove of energy reserves, which have changed the face of communities like Great Yarmouth and Lowestoft, as well as bringing a wealth of investment from offshore companies looking to capitalise on East Anglia’s emerging energy market.

But in recent years that opinion seemed to have changed. Many had written off gas exploration as a dwindling sector that would be nothing more than a bit part player in the government’s future plans for a new energy mix.

Instead, the future was set to come from fields of offshore wind farms and a series of multi-billion pound nuclear new builds that would help drive down green house gasses, while making the country less dependent on imported gas from abroad.

But that strategy seemed to be turned on its head last week, when findings from a new study focusing on the southern North Sea unveiled a five-year vision of fresh investment and new drilling projects that will unleash a revival for the offshore gas industry.

Sparked by tax changes, more than £3bn is expected to be ploughed into 10 new drilling projects in the southern North Sea over the next five years, with an additional 24 explor-ation wells drilled over the next three years, and £13bn spent on exploration across the North Sea as a whole.

Evidence of this can already be seen in the £1.4bn Cygnus project – in which energy giant Centrica has majority share – which is expected to bring more than 4,000 new jobs, a portion of which will be in the east.

And elsewhere in Great Yarmouth, gas extractor Perenco UK has announced its intentions to drill a new well at the Inde platform 56 miles off the coast of Bacton.

It comes after the firm demonstrated its confidence in the southern North Sea last year when it purchased the £251.7m BP southern North Sea gas assets, which will extend the life of the field, sustain jobs and bring fresh opportunities for supply chain businesses across East Anglia in the years ahead.

While offshore wind farms and the use of fossil fuels still cause controversy in some quarters, David Odling, energy policy manager at trade association Oil and Gas UK, said that while the evidence shows that the southern North Sea is on course for a revival, supply chain businesses across Norfolk and Suffolk will still need to seize the opportunities and win the business if they are to create jobs for the region.

He said: “We have seen some of the best opportunities for many years as far as the southern North Sea is concerned. In the last 10 years it has been fairly quiet, but it is on course for a revival.

“We have 10 new projects that the supply chain is involved in in the southern North Sea that will bring £3bn investment in the next five years through increased drilling activity. We expect that the supply chain will get a lot of benefit.

“Of course they have to win the business from the operators, but the opportunities are there and that just wasn’t the case in recent years.

“We would encourage the supply chain to get involved as soon as they can. I think the mood around gas has changed significantly in the last 12 months.

“There is a realisation in the power sector that we are going to need a lot more gas in the next 15 years and we think that gas is now being looked at much more favourably.”