Transition to renewables taking longer than thought, senior BP figure tells MPs
Louise Kingham said ‘clarity’ from the UK Government is needed to unlock investment in the North Sea as she reaffirmed BP’s commitment to net zero.
The transition to renewables is taking longer than previously thought, a senior member of BP has said, on the same day her company announced it would slash funding for clean energy and ramp up fossil fuel extraction.
Louise Kingham, who leads BP in Europe, told the Scottish Affairs Committee there were still “great economic opportunities” in the North Sea.
But she said the UK Government must provide “clarity” for the sector to unlock more investment in oil and gas.
Her appearance before MPs came on the same day BP announced it would slash spending on net zero transition businesses by more than five billion US dollars (£3.95 billion) a year and significantly ramp up its oil and gas operations.
The fossil fuels giant said it still hopes to become a net zero company but will only spend up to two billion dollars (£1.6 billion) a year on projects aimed at the energy transition, a significant cut.
Asked if the corporation was still committed to the transition away from oil and gas to renewables, Ms Kingham said: “I think that’s where the world ultimately needs to go.
“We just have to recognise that that transition is going to take longer than we thought when we sat there five years ago writing that plan.
“I think that’s the fair and honest reflection of what we’ve learned in the past five years.
“We’ve tried to do an awful lot and probably spread ourselves a little bit too thin.”
During Ms Kingham’s appearance at Westminster, concerns were raised about the UK Government’s strategy for the energy sector.
The BP vice president for Europe said delays around the Rosebank and Jackdaw oil fields have deterred investment in the UK amid wider concern about how consent for new oil and gas fields is given.
Asked about GB Energy, she said the nationalised firm could help “de-risk” some private investment in clean energy but said there was a “lack of clarity” over what the company will do.
“I think there is an opportunity, if we get it right, for GB Energy to help de-risk private investment and attract private investment,” she told the committee.
“I don’t think GB Energy can do it by itself but it’s an opportunity, positively, to collaborate with industry, depending on how the work is structured.”
Hebe Trotter, vice president of global government relations with Harbour Energy, told MPs there were “questions” over how GB Energy could slash energy bills, a claim made by Labour during the election.
Sir Keir Starmer said the company will help cut annual power costs by £300 by 2030.
She said: “It’s hard to comment without seeing and understanding what the ambition and aims are for the entity but I would say that I think anything that can be done to reduce customer bills should be sought after.
“I think there is a question as to whether this will support and help that, but of course it’s hard to comment without understanding the full plans that I’m sure GB Energy will set out in time.”
Ms Trotter said conditions for energy companies were better in other parts of the world as she warned about the risks of importing gas.
She said the UK could continue to extract fossil fuels while lowering emissions, which would help reduce a reliance on foreign imports.
Ms Trotter said UK gas produces four times fewer emissions than gas from abroad.
She told MPs her company was in favour of decarbonisation but did not want to see deindustrialisation, adding that 90% of oil and gas jobs could be transferred to the renewables sector as she warned that moving too fast away from fossil fuels would lose jobs.
Ms Trotter said the transition to green energy created a “huge opportunity” for Scotland and that there would be decades of revenue from the North Sea if the UK Government allowed for the right conditions for businesses to thrive.
A spokesperson for the Department for Energy Security and Net Zero said: “The biggest risk to our energy security is staying dependent on fossil fuel markets.
“We have a clear plan for clean power by 2030 which will ensure the UK can take back control of its energy and protect both family and national finances from fossil fuel price spikes.
“We are creating a publicly owned clean energy company, Great British Energy, to ensure taxpayers, billpayers and communities reap the rewards of clean, secure, homegrown power.
“Backed by £8.3 billion, it will invest in and own clean energy projects to boost our energy security, create jobs and protect us against future price shocks for good.”
