Renewables engineering worth £500 million to oil and gas supply chain contractors

 

Mabey Bridge wind turbine tower factory, Newhouse, South Wales
A wind turbine factory

Scotland’s North Sea oil and gas contractors have already diversified into major engineering and power generation sectors – according to the latest annual industry survey published by Scottish Energy.

Renewable projects provide some £500 million (18%) of revenue for oil and gas supply chain contracts, with another £500 million-plus (20%) coming from other power generation.

This is perhaps not so surprising given that much of the engineering skills and technology required in oil and gas fabrication work is similar to that required for manufacturing wind turbines.

Using only data from businesses delivering at least 30% of their sales from the Oil & Gas sector, It is clear that ‘other’ energy sectors and general engineering activities contribute the largest share of ‘other’ business as the Diversification Table, below, shows:

  • Other general engineering 50%  (£1.4 billion)
  • Power generation 20%
  • Defence 5%
  • Renewables  18%  (£500 million)
  • Other civil engineering  1%
  • Carbon capture and storage 2%
  • Nuclear 3%

A lack of skilled staff was reported as the main limiting factor to export activity with 45% of respondents citing this in their top five barriers.

The second most cited barrier is also closely linked to skills with ‘capacity and resource to explore international activity’ being mentioned by 44% of respondents.

Political risks/ uncertainty’ was a concern for one-third of businesses when investing overseas.

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