City leaders have welcomed a £62 million funding package to support energy businesses in the north-east.
The Scottish Government announced the creation of the multi-million-pound Energy Transition Fund to help the oil, gas and energy sectors recover from the impact of coronavirus over the next five years.
It will focus on several major projects in the region – including plans for an underwater hub in Aberdeen, and a hydrogen production facility.
The funding could also provide a boost for the wider Scottish energy sector.
And it has been welcomed by Aberdeen City Council, which earlier this year announced plans for an energy transition zone around the new South Harbour development.
Co-leader Jenny Laing said: “The announcement is an important first step in delivering on our priority of ensuring Aberdeen is at the forefront of Scotland’s ‘green recovery’ whilst demonstrating the importance of the city region to the UK’s and Scotland’s success.
“A commitment to combating climate change was the central theme of this year’s council budget and, building on that, the council approved a net zero vision and strategic infrastructure plan for energy transition.
“To have secured funding so quickly to advance these projects is clear recognition that Aberdeen City Council is leading the way and a model for the drive towards net zero carbon emissions.”
Fellow co-leader Douglas Lumsden said the funding would help keep jobs in the north-east.
He said: “The inclusion of the energy transition zone recognises its significance as a transformational project for the UK economy.
“We anticipated its national importance in March with its inclusion and a policy for an energy transition zone in the proposed local development plan.
“Our net zero vision and infrastructure plan provides Aberdeen with significant opportunity to safeguard skills, jobs for our young people and retain and attract new talent and investment here in Aberdeen.
“I am particularly pleased that the Scottish Government has recognised Aberdeen City Council’s plans for a hydrogen hub, which has the potential to be Scotland’s first commercially viable ‘green’ hydrogen production facility.”
The funding will support the Global Underwater Hub and Energy Transition Zone
The plans for an underwater hub – which would bring together experts from across the UK to develop subsea robotics, remotely operated vehicles and maritime support vessels – were previously backed by former Prime Minister Theresa May.
The funding will also help support ACORN Hydrogen, located at the St Fergus gas terminal.
News of the fund was also welcomed by leaders in the north-east oil and gas sector.
Chair of Opportunity North East Sir Ian Wood said: “We very much welcome today’s timely funding announcement from the Scottish Government to help strengthen the north-east of Scotland’s growing position as a global integrated energy transition cluster creating a lot of employment over the next 20 years.”
Oil and Gas UK chief executive Deirdre Michie said: “The support from the Scottish Government today is good news for jobs, supply chain companies and energy communities.
“This significant funding recognises the essential role of Scotland’s offshore oil and gas industry in realising a net zero Scotland by 2045.”
Chief executive of the Oil and Gas Technology Centre Colette Cohen added: “The creation of this fund to accelerate the transition of the energy sector to a new and exciting net zero future is very welcome news.
“We look forward to working with industry and government to deliver these exciting programmes and make sure the north-east of Scotland continues to be a leader in technology and innovation for the net zero economy.”
Meanwhile Jean Morrison, chair of the Aberdeen Renewable Energy Group, said it had the potential to attract investment to the north-east.
She said: “This news will be greatly welcomed by the north east energy sector. It’s an industry that has experienced highs and lows throughout the decades but this could be the toughest recovery yet, so it’s important we use this crisis as a catalyst in the transition to net zero.
“The Energy Transition Zone at Aberdeen South Harbour looks set to provide a first-class base to develop renewable and low-carbon technologies and the city is already home to some of the most ground-breaking hydrogen initiatives.
“With decades of experience and knowledge, the north-east is not only well placed to deliver on energy transition but also attract investment and create jobs for the region.”
Announcing the funding package, the Scottish Government’s economy minister Fiona Hyslop said: “This is an extremely difficult time for our business community and we recognise the need to do all we can to help the recovery of key sectors of the economy and Scotland’s regions.
“This package of investment for the north-east will support our energy sector as it recovers from the impact of Covid-19 and will help us make significant progress as we move towards net zero by 2045.
“Aberdeen is recognised globally as a centre of excellence in oil and gas and this funding will help ensure that the knowledge, skills and expertise it has to offer will play a vital role in the energy transition.
“It is vital we move quickly to seize the opportunity to take forward a green, low-carbon recovery and support the workforce as the energy sector diversifies. Now is an opportune time to re-imagine the Scotland around us and to begin building a greener, fairer and more equal society and economy focused on wellbeing.”