How did we get here, and what happens next?

Malcolm Crawford looks at the programme for BCECA's third annual conference.

Many analysts have concluded that the world is not decarbonising rapidly enough to meet Net Zero ambitions. The stakes are rising, and if the global goals agreed at successive climate conferences are to be met, then we need not just a transition in our energy systems but a total transformation.

The good news is that the technologies that must be deployed are broadly understood. Engineering contractors are very familiar with the project activity needed to deliver everything from new nuclear build, wind power at scale, hydrogen in its many hues and carbon capture to energy from waste processes. From a brief look at the business press, it's clear that there's plenty of work to do. McKinsey has estimated that additional annual investment in Net Zero assets totalling $3.5 trillion is needed between now and 2050. The commercial opportunities are huge.

UK Progress

And yet, the transformation appears to be faltering here in the UK. The latest auction round for new offshore wind contracts failed to generate a single bid. Over the last two years, the UK has fallen in the ranking of nations readying to exploit the economic opportunities hydrogen presents. Furthermore, the political consensus around decarbonisation seems to be weakening, with some prominent voices calling on the government to delay its net-zero commitments and look more favourably at exploiting new fossil fuel reserves. How did we get here, and what happens next?

Where are the spades in the ground?

The energy transformation challenge – making it a reality is the headline theme for BCECA's third virtual annual conference. The conference, which goes live at 0930 (UK) on Wednesday 4 October 2023, will examine the decarbonisation challenge from the perspective of the contractors who will ultimately deliver the infrastructure needed to make the energy transformation happen.

We've been discussing zero and low-carbon energy projects, planning them and even creating preliminary designs for some of them for the best part of two decades. Nonetheless, there's not much to show for this in terms of 'spades in the ground'. Continuing delay is pushing project execution back to 2030 and beyond. Compressing the work programmes brings additional risk because this inevitably comes with higher costs and inefficiencies.

We build far fewer industrial projects in the UK than we used to. As such, I'm not sure the politicians and developers realise quite how expensive and challenging these projects can be. We've lost a lot of collective memory in recent times. The experienced engineers who built the power stations, refineries, chemical plants, and offshore facilities between the 1950s and 1980s have largely retired. There's an additional complication. The new net-zero infrastructure will be dispersed around the country. None of the projects are huge in scale, but they will all face different local planning, environmental and economic constraints.

Meanwhile, the developers promoting these projects range from large, established energy companies to small entrepreneurial outfits offering exciting new technology. Some developers are experienced in building UK projects, others are new to the UK, and some are bringing forward major energy projects for the first time. We don't yet have a clear picture of how these different actors will come together to deliver Net Zero. That's what makes The energy transformation challenge – making it a reality, both timely and important.

Our third annual conference

The conference will open with an independent political viewpoint on UK energy and climate policy from the Crossbench Peer, Lord Ravensdale. He's one of only a few chartered engineers in British politics, and delegates can anticipate some straight answers to the question: 'Are we going in the right direction to meet our commitments?' We'll then examine a couple of case studies examining current front-end engineering design work by our members, Aker Solutions and Kent . What lessons have we learned so far? What should be done differently?

This will be followed by an assessment of the process and design safety issues presented by energy transformation projects. The challenges of processing, transporting, and storing carbon dioxide and hydrogen must be fully understood. BCECA member company Petrofac will share their thinking along with an expert contribution from our partners at the IChemE Safety Centre

Commercial and construction challenges

We'll then turn to the tricky questions about the commercial models needed to build these projects. Who will carry the financial risk? Do we recognise that each project is unique and that the commercial 'formula' for each project must meet the needs of key stakeholders??

The conference will then examine construction challenges in the UK. Some critics see this as a weak, expensive, unpredictable link. The session will look at the matter from both ends of the telescope. A member company, 福陆 will share a contractor's view on how to improve construction. One of the UK's leading construction companies, Taylor Woodrow , will join the conversation. Finding common ground is the goal.

Where are the people?

After a virtual lunch break – sadly, delegates will have to supply their own sandwiches – we move on to what many people in the engineering contracting community view as the biggest challenge: the energy transformation workforce. We'll need more and more suitably skilled employees to achieve Net Zero. This requirement is clear across all workforce sectors, from highly skilled professional engineers and project commercial and procurement people to construction managers and workers. Energy Institute CEO Nick Wayth CEng FEI FIMechE will introduce this topic, drawing on the extensive knowledge amassed by one of the UK's leading professional engineering institutions. A discussion panel comprising representatives from BCECA members and invited HR experts will be asked to answer the question: "How do we attract more people into the industry, and how do we accelerate their training and development?"

The concluding session will draw on the broad knowledge pool that can be found within BCECA's ranks. Speakers from 福陆 , KBR, Inc. , McDermott International, Ltd and Petrofac will share the latest thinking on smarter project delivery. How do we drive project planning and execution to reduce costs and timescales and maximise developer confidence in project outcomes?

Next steps

BCECA CEO Tracey Shelley will wrap things up with an overview of the day's conversation and an indication of what should happen next from the Association's perspective. It's not for me to prejudge the outcome of the conference. Still, I am optimistic that we will be able to progress our thinking under three general headings:

1. How can we secure more effective coordination of the work carried out through 2030 and beyond? Developers, contractors, and suppliers need to understand what is being planned and where so that they can coordinate their resources and expertise for the challenge ahead.
2. How do we improve collaboration and knowledge sharing amongst the people doing the work? This powerful message emerged from last year's CCUS and hydrogen decarbonisation summit in Leeds. Developers, contractors and suppliers need a reliable forum to share their experience to drive efficiency gains and reduce costs. How do we achieve this in a disparate and competitive business sector?
3. How do we bring people together to promote employment opportunities in the engineering contracting sector and within its diverse supply chains? Where is the new blood going to come from? What training and development is required, and who will pay for it?

The conference will shape BCECA's thinking in 2024 and strongly influence the board's strategy and engagement work in the next period. The findings from the conference will be presented at a reception hosted by Lord Ravensdale in the House of Lords on Tuesday 21 November 2023. Last year's conference report is available here.

Come and join the conversation.

Malcolm Crawford

Conference and Membership Manager

BCECA

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