Equate sat down with Liam Macintyre, Strategic Director of the Energy Transition for UK & Global IRM from Subsea 7 to discuss the challenges of a 21st-century energy transition.
How do we produce reliable, affordable, and sustainable energy for our societies?
The energy transition we are currently experiencing is one of the most complex challenges faced by our industrialised societies today. It requires a collective effort from a variety of stakeholders and involves both social and technological changes. Simply put, it is the process of reducing greenhouse gas (GHG) emissions to ‘net zero’. It is also referred to as the ‘decarbonisation’ of the energy system. In the UK, there are different plans for achieving a net zero emissions economy by 2050, while Scotland has an even more ambitious target of getting to net zero by 2045.
Transitions between major energy sources have occurred before, with the shift lasting a hundred years due to different causes such as resources shortage, labour costs or technological innovations. One of the main challenges we are seeing today is the rapidity in which we are expecting our industries and societies to transition to greener energy – the clock is ticking, and a collective effort is required to get where we need to be!
In this context, oil and gas companies need to make critical decisions. They also need to decide how to position themselves, how to compete and where to focus their efforts to play their part in a low-carbon future. This is not an easy task and needs to be balanced against reputational and financial risks. In 2021, McKinsey published an article in which they summed up the strategic responses among oil and gas players in three broad archetypes: the resource specialist, the integrated energy player, and the low-carbon pure play.
To learn more about the offshore energy industry and the role it can play in the energy transition we spoke with Subsea 7 – a global leader in the offshore energy industry, delivering engineering and project management services for oil and gas and offshore wind farm developments.
We have interviewed Liam Macintyre, Strategic Director of the Energy Transition for UK & Global IRM at Subsea 7. Liam sits in the regional leadership team and has a mechanical engineering background alongside a business school education. He started as an engineer working offshore before moving to more commercial and senior management positions throughout his career.
What is your role within Subsea 7?
My role is to develop and drive the energy transition strategy throughout Subsea 7’s UK and Global IRM business. It’s a business that includes all of Europe, except Norway, and employs over 1,000 people. Our mission is to enable and accelerate the energy transition for our society. Up until now, the energy industry in Europe has been siloed, electricity and gas networks are planned and managed independently from each other. But we believe the future of energy is an integrated system where the coordinated planning and operation of the energy system will be conducted ‘as a whole’, across multiple energy carriers, infrastructures, and consumption sectors.
What does that mean in practice?
We work closely with our clients and try to help them unlock the energy transition challenges they are facing. Our clients are diversified and often come to us with a vision for their business. However, they don’t necessarily have all the answers to translate this vision into an actionable plan and strategy and that is where Subsea 7 can support them. No one has all the solutions, but we believe collaboration and coming together is key to finding the best and most relevant solutions for their business and society as a whole. In short, we support them in the reduction of their carbon footprint to facilitate their energy transition.
How does Subsea 7 support this transition?
We’ve supported oil and gas projects for over 40 years, and offshore wind projects since 2009. This differentiates us from other companies that have specialised expertise in offshore wind, but don’t have our experience working in oil and gas. We understand the mindset and challenges of our clients, and this adds value to our offering. We bring both worlds together, because this is the only way to meet our net zero target: by building an integrated energy system.
What skills are or will be in high demand tomorrow in your sector?
It is hard to know the implications in the long-term. I read recently that 70% of all the jobs in 2030 have not been invented yet. What we know for sure is that the pace of change in the job market is happening faster and faster. If you look at our organisation and the type of roles and functions involved in the business, it is very broad. Half of our workforce is made of engineers and the rest is a variety of support functions such as human resources, legal, supply chain, health and safety, environmental, accounting, etc. One thing that is increasing for sure is a need for data and digital skills helping us accelerate design and verification by moving physical work into the digital environment.
What advice would you give to people in their early careers who are not sure what engineering subject to pick?
I would recommend core engineering to start with because it gives you increased flexibility in terms of what you can do and provides a solid foundation. So, for instance, mechanical, chemical or electrical engineering can be a good place to start if you are not sure. Selective or targeted specialities are interesting, but things are changing so fast that it is hard to predict which one will be the most relevant.
Also, it is one thing to have a degree, but our industry needs behavioural skills and a mindset in line with what the sector needs: collaboration. There is a misconception that we are born with these skills, but this is only true to a certain point. I believe that we can all develop more skills and learn so my real advice to students would be to identify the ones you have today and the ones you need to develop going forward.
Are there opportunities in the sector for people who do not come from a STEM background?
If you go back 15 years all project managers were engineers but that is not the case anymore. When you are a project manager you work with engineers who can help you. And we are seeing more and more project managers coming from a legal or commercial background for instance. What matters most in our industry is wanting to learn, being curious, being able to deal with ambiguity and building resilience.
What are the main challenges you are seeing in the sector today?
There are three main challenges: commercial, technical and societal.
On the offshore wind side of the business, we have challenging contractual terms with high risk rewarded with low margins. Some of our competitors have experienced large financial losses as a result. Change is required to provide sustainability of the business environment.
Thinking about the technical aspect, we are in the midst of a historically defining period of the development of international energy systems. Collaboration is a word used often, everyone has a desire to do it, but it is not easy to implement within a contractual framework. Collaborative contracting requires us to move away from traditional procurement based on a transactional model with short term objectives, and into longer term sustainable relationships which strive for a win-win outcome.
Another challenge is the perception of the oil and gas sector within our society and the fact that it can often be demonised. I believe this needs to be addressed to realise a ‘just transition’ for society where we balance reliability and affordability while being deeply committed to decarbonisation. Did you know that the UK has some of the lowest carbon footprint fossil fuels in the world? If you look at the UK Government Energy Whitepaper, 60% of net zero solutions are predicted to be created from the offshore energy infrastructure.
How do we build an effective integrated energy system?
We need to balance out the following factors: reliability, affordability, and sustainability. We have a special focus today on the last one – sustainable energy – and for good reasons. But we have to recognise that the other two are also important, and it goes back to what our society needs.
Today in Scotland, 25% of our population is in fuel poverty. We know that greener energy will imply that prices will go up, so this is something that we need to consider and balance through government policies and other levers. New energy has to be affordable.
If you now think about reliability, one of the main challenges is energy storage. How do you store energy from one season to another? Hydrogen is one solution, and we are looking into it, but realistically it is likely 10+ years away from being commercially scalable. Extreme weather conditions or seasonal unpredictability can impact our ability to deliver reliable electricity to communities. We are so used to having energy available all the time that we only realise this is not a given when we experience a power outage. Reliability is also linked to where we source our energy geographically and whether we can rely on political stability.
Who are the key stakeholders involved in the energy transition?
Governments play an important part in terms of policy, but I think that businesses and industry partners have a responsibility to come up with ideas and push them forward. We need to propose something and frame what the solutions are, or could be, based on our technical and industry knowledge. And this is very much what we are doing at Subsea 7 – it goes back to the importance of collaborating across sectors and across stakeholders.
What are you doing at Subsea 7 to play your part in the energy transition?
Even installing offshore wind turbines requires us to burn large volumes of fossil fuels in our construction vessels. Sustainability is one of our core values and we announced last year our target to achieve net zero greenhouse gas (GHG) emissions by 2050. These targets are based upon plans to decarbonise Subsea 7’s operations, implementing changes and solutions available today, as well as the deployment of new, cleaner technologies as they become commercially available at scale in the market.
We are seeing digitalisation as a key lever. We are in the process of deploying fuel meters across our entire fleet that allow us to understand our energy consumption and analyse how we could operate our vessels in a smarter way to achieve fuel savings, potentially up to 7%. Other levers include the hybridisation of our vessels, with one hybrid vessel in our fleet today and ongoing study work to explore additional conversions. Further to this we are exploring the use of bio-fuels and conducted the first full scale trial in one of our operational vessels in February.
Any final word you would like to share with Equate Scotland community?
I believe there has never been a more exciting time for power and energy systems. Trillions of dollars are going to be invested in rewiring and replumbing the worlds energy system over the next few decades. The interconnectivity in terms of the energy mix and international relations creates challenges for our societies but also exciting opportunities for all. I believe these challenges would benefit from increased diversity of though amongst our energy problem solvers, so we must take strides to further improve our support to women and people from minority ethnic backgrounds. I believe the energy transition is the challenge that will attract young people into engineering, applied sciences and technology.