From the Chief Executive: August 2021

The UK recently passed the remarkable achievement of more than 75% of the adult population receiving their second dose of the COVID-19 vaccine. The vaccine has been touted from the start as the way out, and the world is now watching the UK closely as it looks at a return to ‘normal’, with most restrictions lifted. The key question remains – will our high vaccination rate keep deaths and hospitalisations down, even with increased case numbers and new variants?

This is the question that must be answered if we want to see the global energy conference season return to our calendars. It’s still hard to imagine a world where travel and global events return to their 2019 state, but perhaps the greatest test in the energy space so far will be ADIPEC, taking place in Abu Dhabi this November. We are delighted to be returning as the UK Pavilion hosts, and we can’t wait to meet our exhibitors once again on the show floor in a safe and secure environment.

ADIPEC will also be an interesting case study in other ways. Energy transition has been the buzzword for several years now, but more recently we’re seeing new clean technology becoming more than just a buzzword. Operators and developers are announcing more and more groundbreaking projects in the hydrogen, CCUS and floating offshore wind sectors, and supply chain companies are matching that ambition with investment of their own to explore these markets. Will oil and gas still dominate the talk on the floor at ADIPEC, as energy transition penetrates this key event, too? Will we see new clean technology changes on display, or will there be more of a focus on softer leadership, such as diversity, sustainability and skills transition?

The shift in the energy industry as a whole can be a cause of concern to the supply chain – particularly those who have stuck with oil and gas through thick and thin. In July, EIC issued the fifth annual Survive and Thrive Insight Report, which studied the growth strategies used by energy supply chain companies in a market crisis. The report had some outcomes that surprised us, and which are perhaps worrying for the sector.

For the fifth year running, establishing new export markets was supply chain companies’ least-used strategy; indeed, it is generally considered to be the hardest. Export-shyness is growing in the UK, and we believe that government and industry intervention will be needed to reverse this worrying trend.

Innovation of new products, services and technologies was also down for the fifth straight year. Only 30% of companies are innovating their way out of a crisis, versus 73% in 2016. With digitalisation hard to sell and scale, and relatively low margins, is new technology development also on the decline, due to little confidence in the future of markets such as oil and gas and little clarity on newer markets such as hydrogen and CCUS?

Perhaps less surprisingly, diversification was the most popular growth strategy, as companies looked to de-risk their portfolios and spread their revenues across multiple sectors. But did you know that 75% of diversifying companies are looking outside of the energy sector entirely? Throughout this edition of Energy Focus we explore some of these growth strategies in more detail, and we were delighted to speak to some of the participating Survive and Thrive companies for their added insight and success stories.

There is not long to go until the long-awaited COP26 opens its doors in Glasgow. This is believed by many (including ourselves at EIC) to be a key milestone for the energy sector – but which policies will shine through? Will we just hear soundbites and a lack of ambition by governments, or will it be a turning point and bring the world together as we look to achieve net zero by 2050?

With so much complexity and uncertainty, it’s hard for energy supply chain concerns to be heard. This is why EIC helped set up the UK Energy Supply Chain Taskforce, co-chaired with DIT Exports Minister Graham Stuart and BEIS Energy Minister Anne-Marie Trevelyan. This brand new government and industry initiative will amplify the supply chain voice, shape relevant UK policy, and take action to enable the energy transition and enhance exports and internationalisation.

We are excited to be a part of this coalition for change, and with two great co-chairs and a fantastic array of participating taskforce members, representing all areas of the UK and all key energy sectors, we believe now is the time to get started on this exciting journey.

Stuart Broadley, Chief Executive Officer, Energy Industries Council

stuart.broadley@the-eic.com