Member News: Global Underwater Hub calls on government to deliver an industrial strategy to boost investor confidence

December 11, 2024
Member News: Global Underwater Hub calls on government to deliver an industrial strategy to boost investor confidence

The UK’s underwater industry has grown from £8bn to £9.2bn in the last 12 months and now supports over 51,000 jobs. 

New research from Global Underwater Hub (GUH) reveals that the industry has both the capacity and capability to accelerate the global energy transition but only if project certainty is secured.  

According to the 2024 Business Survey from the leading trade and development body for the UK’s underwater industry, there is a more positive assessment of supply chain capacity and, overall, market prospects remain high driven by the wide range of opportunities across all its markets, but most notably, in offshore energy. 

However, confidence in whether or when projects will be delivered has declined – 62% believe that project timelines will be missed. 

The lack of project surety and a “concerning” uncertainty about timelines is making it tough for companies to tie business and investment plans back to Final Investment Decisions (FID), tender awards and project sanctions. 

Despite the challenges the industry is continuing to grow, with 57% of respondents confident that roadblocks to success can be overcome. However, only 11% believe there is enough visible commitment to projects in the form of appropriate policy and finance. The lack of positive market signals is prompting UK companies to consider relocating overseas.  

To counteract this, GUH has called on the UK Government to recognise the scale and potential of the underwater industry to generate wealth, jobs and exports and ensure its industrial strategy provides what is needed to reach that potential. 

Neil Gordon, GUH chief executive, said: “Our world class underwater supply chain rightly sees itself as having the necessary, leading capability to harness the opportunities across all its markets, particularly in offshore energy. It is closing the gap towards having the necessary capacity to meet demand but does not have sufficient confidence in project timelines and returns to trigger the necessary investment.  

“If these businesses are to invest and plan for the coming decades, they need strong market signals and commitment at various stages of a project and market development. Aligned policy, timely consenting, sensible financing, concrete project timelines and clear supply chain investment are imperative to move projects from the drawing board to the seabed.” 

While 80% of respondents to the survey said they have confidence in global underwater markets, with significant overseas opportunities for companies headquartered in the UK, GUH warns that exports could transform into wholesale moves abroad, significantly reducing the domestic footprint.  

Mr Gordon added: “The UK has cultivated a world-leading underwater sector with a supply chain that continues to report robust growth and is ready to support projects around the world. But we risk losing these organisations without an industrial strategy which supports both a just transition and our ability to take a world-leading role in new markets by leveraging our supply chain’s excellence across most project lifecycles. 

“Our supply chain has the capability and capacity to take on global projects, but we must ensure that the UK remains an attractive location from which to manage these and that UK projects are internationally competitive when compared with opportunities elsewhere. 

“With an industrial strategy that encompasses multiple underwater markets and recognises that most supply chain companies will service a mix of these markets, we can sustain and grow the capacity and capability of the underwater industry through the transition in areas where the UK has a global competitive advantage  

Headline findings from the 2024 Business Survey, which was compiled by GUH’s Strategic Intelligence team, include:  

  • Capacity has increased from 55% to 67%  
  • Nearly 90% of companies believe they have the necessary capabilities to meet demand 
  • Only 38% of respondents believe that project timelines will be met 
  • 92% consider offshore wind a primary or secondary market 
  • 60% say that the oil and gas market remains their short-term priority 
  • 70% of respondents will need more people to deliver current and future projects 
  • A 25% increase in technical roles is predicted to meet future market demand 
  • 52% will require significant levels of investment in the next 4 to 10 years, with 35% requiring major investment now 

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AREG is the original energy transition organisation, working on behalf of members to empower the energy supply chain and champion its expertise. Please get in touch if you have any questions or would like to find out more about membership.

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AREG has played an important role in the growth of Scotland’s renewable energy sector, engaging the supply chain and developing the European Offshore Wind Deployment Centre. However, we are only at the very beginning of the transition that AREG was established to both lead and support so there are still opportunities for companies to get into the constantly evolving renewables supply chain. We look forward to continuing our work together as renewables builds on its place as Scotland’s main source of power, and as we seek to deliver real change in the crucial areas of heat and transport.

Scottish Renewables
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Aberdeen & Grampian Chamber of Commerce has worked closely with AREG since its formation. The recent progress in the developments of offshore wind projects by Equinor and Vattenfall are as a result of the work of the group over many years. The north-east is known as the oil and gas capital of Europe. At the Chamber, we believe the region must evolve its position to being recognised as the energy capital. Whilst hydrocarbons will continue to be essential in driving our economy for years to come, the generation of renewable resources will play an increasingly important role in providing cost-effective power, innovative development and economic growth.

Aberdeen & Grampian Chamber of Commerce
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The enthusiasm and dedication of the early group that would become AREG was fundamental in us choosing to launch All-Energy in Aberdeen. The first tiny show was held in 2001, and AREG’s Chairman at the time, Jeremy Cresswell, played such an active role that I often describe him in terms such as All-Energy’s ‘midwife’. All-Energy is now the UK’s largest renewable and low carbon energy exhibition and conference in terms of number of attendees, space booked, and number of exhibiting companies. As AREG became firmly established, their presence and support for the event grew spectacularly over the years. We thank them most sincerely for their invaluable input.

All-Energy
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Vattenfall has forged a strong working relationship with AREG through the development of the European Offshore Wind Deployment Centre. AREG has worked tirelessly on behalf of the North East and it can take enormous credit for the growth of sustainable energy in the region and the path it has cleared for the region to capture further investment.

Vattenfall
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Aberdeen City and Shire is emerging as a key location for renewables by successfully transferring its world-class oil and gas expertise into the sector and AREG has done much to advance this through a broad range of initiatives. It has acted as a catalyst in driving further investment in the local economy by engaging with companies, Government, public bodies and existing projects and we have been pleased to support their efforts. Scottish Enterprise will continue to engage with AREG as we increase Scotland’s use of renewable energy.

Scottish Enterprise