The Energy Economy – A Skilled Crunch?
University of Hull
Dr Eddie O’Connor, CEO
Mainstream Renewable Power
28 March 2012
I want to start with a vision of the future Energy Economy which I hope will excite you because whether you are a student or academic you should be constantly excited by what’s going on around you, by what you hear and what you read, by what you think and, above all, by the future.
I know I was constantly excited by ideas throughout my student life – and I still am as an adult. Maybe one of the secrets of a happy life is to be a perpetual student, to be always learning, to be open to new challenges and to be responsive to new challenges. Otherwise you die intellectually and you begin to dry up inside and cease to be of use to anybody.
So, the place to start with the rest of your life is right here, in this wonderful university, with such a proud academic record and with such a strong commitment to serving the community around it.
I accepted the invitation to speak here today because I wanted to encourage you to be excited by the future Energy Economy and by the wonderful economic potential of this region. I am glad to make a contribution to this strategy conference on the Energy Economy and how to avoid a skills crunch.
I will begin by presenting you with some facts about climate change. Then I will outline what we need to do to meet the challenges it presents, including the training of a skilled labour force. Finally, I will spell out the enormous possibilities the energy economy will create for this region in terms of jobs and economic growth.
Let me begin with an inescapable fact. If we continue with ‘a business as usual’ scenario in the burning of fossil fuels then this planet of ours will suffer from irreversible climate change.
The temperature will increase inexorably, sea levels will rise, coastal regions will be inundated and islands will disappear, hundreds of species will die and the human species itself will be threatened by unimaginable dangers, such as desertification at one extreme and incessant flooding at the other.
What we call the world community has been discussing this threat for the past three decades or so and, with the exception of the European Union, has responded slowly, or not at all, as in the case of the United States. But there has been progress in building a consensus around the proposition that we must limit the rise in temperature to two degrees Celsius, otherwise the damage to the planet will be lethal.
To achieve that objective we must limit the concentration of carbon in the atmosphere to not more than 450 parts per million.
And to achieve that goal we must cut the 1990 level of Green House Emissions by 80% before 2050, long before most of you here reach the age of retirement.
In short, the world is on a once-off transition to a low carbon society. That is the vision I put before you: a world without fossil fuels. No coal, oil or gas in power generation. No petrol or diesel in cars, trucks or trains. We are entering the era of electricity. The oil age is coming to an end. Hydro carbons will be replaced by renewable energy.
To generate electricity we will mainly use wind or solar power for they are the only sources of renewable energy that are commercially deployable at scale. In the case of wind, I reckon about 80% of wind power will be generated offshore in the seas around Europe, predominantly in the North Seas and the North West Atlantic.
In other words, much of the electricity that will power Britain and the European continent will come from the seas off the East Coast of Britain on your door step here in Hull.
I promised I would spell out what we had to do to realise the vision of a low carbon society. Well here’s one of the things we have to do. Between now and 2050 we will have to install somewhere between a million and a million and a half Megawatts in the seas around us.
Each year for the next forty years ahead we will have to install between 25,000 and 37,000 MW in the seas. At an average size of 5 MW we will have to achieve an installation rate of between 5,000 and 7,500 turbines each year. That works out at between fourteen to twenty every day.
That’s some challenge and to meet it will require a fleet of new custom designed vessels and we will have to build specialist ports to service the enormous logistical operation involved in handling millions of pieces of equipment.
The total investment in the turbines would come to at least three trillion pounds at current costs.
But above all, we will have to build a grid connecting the turbines and then to transmit the electricity ashore. For that purpose, I have proposed we build what I call a Supergrid covering the seas around Europe, particularly the North Sea off this coast.
The key piece of technology needed to make the Supergrid work as intended is a Supernode, which we in Mainstream are currently designing and which concentrate dispersed generation and then route it to where the electricity is needed most.
I also told you at the outset that I would spell out how I hope to realise the vision of a future built on offshore wind. Well, for a start, I created an organisation some three years ago called ‘The Friends of the Supergrid’ in order to propagate the concept of the Supergrid among plocy makers.
It consists of over twenty companies and organisations representing all facets of the power generation industry and has full time staff based in Brussels.
Last week we held our inaugural Annual Conference with over three hundred delegates present from nearly every Northern maritime state in the EU and it opened with an address from the Danish Presidency of the EU and the Belgian Deputy Prime Minister.
The Conference advanced the concept of the Supergrid to the point where there is real political will to exploit the infinite resources of wind power, I’m delighted ti say that Britain is one of the strongest supporters of the Supergrid and I confidently predict that the first leg will be built here in the North Sea off the coasts of Britain and Germany.
For Britain, the significance of offshore wind is that it opens up the possibility of building an export market in renewable energy that will rival any other industrial sector.
The export opportunity is enormous but it won’t happen unless the government, industry and the universities make common cause and produces the necessary expertise and skills.
That is the theme of this Conference.
New skills are central to success. Industry needs skills. Young people, like the students of this University, need jobs. The government needs revenues. All these needs can be satisfied by developing the offshore wind industry so that it simultaneously supplies domestic UK electricity demand and also exports clean electricity to the vast European power market.
I should add, that all these needs in terms of jobs and revenues can be satisfied if Britain captures the bulk of the Supergrid supply chain in terms of infrastructure and equipment.
Replacing Hydrocarbons will take two generations of a work force that does not exist today. That’s why we need collaboration between industry and universities to avoid the skills crunch.
To do this we need a culture change here in Britain. Above all, we need to celebrate the role of the creator, the innovator, the builder, as in the Industrial Revolution, when the coal and steel industries were built from scratch and when steam and mechanical power replaced human and horse power.
This time, on the verge of the green industrial revolution, we need an even more profound cultural change. We must celebrate the role of the engineer, the entrepreneurial engineer, and the role of the builder in society.
For that reason I am delighted to see innovations like the Queen’s Awards and, indeed, a Conference of this type.
I suppose that what we need, above all, is the entrepreneurial engineer, the risk taker who is willing to build what other people deem impossible, such as the vast new infrastructure that will underpin the generation of renewable energies. And propel the Energy Economy.
In that regard, let me say that I am most encouraged by the enthusiasm I find here on the East Coast for the cultural change I am advocating. It is like a coiled spring waiting to uncoil and to release everybody’s imagination from the shackles of the mundane.
That enthusiasm has spilled over into the universities and this is crucial because the universities and the entrepreneur have to come together and learn how to communicate with each other.
That communication could begin by the universities conducting market research as to what skills will be needed, five, ten, twenty years from now and then to shape the educational system so that these needs are met.
Just as importantly, the entrepreneur should invest time in working out what skills he thinks will be necessary and then plan their systematic build up so that these skills are there when needed.
The government and the universities should be recruited as active allies in this process of focusing on future needs.
Quite obviously, an investment of the scale required will not be easy in today’s world of constrained financial resources. This means the common task of government, industry and the universities is to learn how to use scarce resources wisely. The objective, in management terms, is to focus resources on the skills that will be needed the most. Then we must prioritise ruthlessly.
I have no doubt that among the more important tasks would be teaching the teachers, and training the trainers, so that expertise and knowledge is disseminated in an effective and timely manner throughout the educational system.
The educational challenge is unique. Although the demarcation lines between tradesmen, semi-skilled staff, technicians and the professions have narrowed with the development of IT and the advent of miniaturisation, it still behoves us to train up each category to the highest levels possible and to make these careers attractive to intelligent members of society.
I cannot overstress the crucial importance of training the engineer, those who will be professional leaders in the future.
For the past few years I have been studying the German system of training their technological elite and I’ve noticed the close consultation that takes place between their educational sector, industry, local, state and federal governments and, particularly, their small and medium sized enterprises. Frequent meetings are held between these various actors and information is shared freely. The result is there for all to see. Germany is Europe’s leading manufacturer and largest exporter of leading edge technologies, especially in renewables.
But great as this leadership has been I have noted even there, an emerging skills gap in this transitioning world which is moving towards sustainability.
So, contrary to appearances, Britain is not that far behind Germany because of the very novelty of the technologies that have to be developed in a low carbon economy.
For example, in the period ahead you will see six new designs for specialist ships serving the offshore industry, perhaps more. Irrespective of where they are built they can be repaired locally. In fact, there will be a vast requirement for Operations and Maintenance, all of which will have to be performed locally using high skilled technicians and engineers.
Think of the potential of this new industry if we locate 40% of Europe’s electricity requirements off the shores of Britain, and most of it here off the East Coast.
Think just of the IT requirements in controlling the generation and transmission of offshore power and you begin to realise the potential for skilled employment here in the region.
Think of the hundreds of miles of HV cable that will be needed to create the Supergrid and then think of the manufacturing possibilities for Britain which will involve copper conductors, re-inforced steel and plastic insulation.
Think, as well, of the huge number of platforms that will need to be built offshore and think, too, of the Supernodes that will have to be manufactured as the very fulcrum of the Supergrid. Those platforms could rest on piles manufactured here in the East Coast.
Finally, think of the great need for fibre optic cable that will arise out of the information flow up and down the Supergrid.
I could go on with many other examples from the supply chain associated with offshore wind but the message would become too repetitive. It remains a simple one.
There is huge employment potential ahead here in Britain of the sort not seen since the dawn of the first industrial revolution. In transforming the economy, we can transform Britain itself by again putting it at the forefront of entrepreneurship and innovation, of technological leadership led by the engineer entrepreneur.
I said at the outset I would spell out the benefits of the exciting future I foresee for this region in building the Energy Economy and I hope I have done so.
The demand for clean green electricity in Europe will be enormous. The resources to generate it are here on your doorstep in the North Sea. The human resources are available in the students of today.
All that remains is for government, industry and the universities to coalesce in one united gigantic effort to mobilise Britain for the sustainable future that we must achieve. The skills crunch must be avoided by close collaborative effort.
In particular, it falls to this region to take up the challenge of the Energy Economy, given its great industrial tradition and the abundance of the natural resources it enjoys in terms of wind.
Finally, it is up to you listening to me here in this University to respond to the vision I have outlined. If it excites you as much as it excites me then I shall have succeeded in my mission here today. It was an honour to be invited to address this conference and I commend the University on a magnificent initiative.
I thank you for listening and hope you have shared my passion for creating a sustainable future for the whole of mankind.