In Aberdeen and the North East of Scotland, we have been aware of the need for energy transition away from fossil fuels to renewables for many years, and we are strong supporters of this process. The North Sea oil and gas industry should be seen as part of the solution to climate change as opposed to being part of the problem.
The pandemic brought with it an acute focus on sustainability; a national mood focused on energy transition and a desire for a more immediate change away from fossil fuels. However, at a local level, Aberdeen’s occupational market continued to suffer from oil and gas jobs disappearing more quickly than renewables jobs appeared.
As we emerge from the pandemic facing significantly higher oil prices as a result of macro geopolitical uncertainty, energy security in the UK is now acknowledged by most as being of huge importance. To this point, where it is necessary to consume fossil fuels in the transition period, many believe we should be aiming to rely on those extracted domestically, in a highly regulated environment, than importing from across the globe, with the associated carbon costs of doing so, and from less regulated markets.
Political rhetoric from the UK Government appears to have shifted in support of further (sustainable) exploration and production. As a consequence we anticipate an increase in occupier activity from oil and gas operators in Aberdeen over the short term.
We have already seen many oil and gas clients dust off projects which had previously been paused in anticipation of a change in stance and take-up activity in the first quarter of 2022 supports this. However, while oil and gas will continue to play a part of Aberdeen’s economy throughout the UK’s energy transition period, what defines the current market unlike previous years is the far greater spread of sectors driving office demand.
What is now viewed as tangible demand from the renewables sector will be amplified with supporting industries to the recently awarded ScotWind licenses. With 17 licences awarded in the first Scottish offshore wind leasing round in over a decade, and the first ever since the management of offshore wind rights were devolved to Scotland, the area of seabed covered by the projects will exceed 7,000 km sq with an associated supply chain investment of $150 billion, according to Aberdeen Grampian Chamber of Commerce. Aberdeen’s established supply chain infrastructure, and transferrable skills from the oil and gas sector, is well positioned to support the growth of the offshore wind industry.
In the short term, renewed activity in Aberdeen’s occupier market is focused around better quality, energy efficient office space and given the non-existent development pipeline, we anticipate a tightening of supply of the best space.
Further information
The renewable energy sector is future-proofing Aberdeen's economy
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