Norman Wisely

Norman Wisely, the Aberdeen managing partner at CMS, says many of the forthcoming post-pandemic economic stimulus packages about to be introduced across the world will likely be guided by environmental considerations including Paris Agreement obligations.

He is forecasting a spike in measures that further drive the current energy transition including funding for offshore wind projects, expanded rollouts of electric vehicle charging infrastructure, grants for development of clean aviation fuels and the further expansion of cycle works.

Mr Wisely has also highlighted the changing culture within the energy sector where major operators, including Total and BP, have announced high profile low carbon investments since the recent oil price crash. While a number of energy firms have cut their overall investment due to current financial pressures, in many cases the reduction in this expenditure is far more significant on oil and gas projects compared with those which are low carbon.

While forecasting an expedited move towards greener energy, Mr Wisely believes fossil fuels will continue to play an important role going forward as part of a wider energy mix.

He said: “The energy transition, which was underway long before the pandemic took hold, is likely to be propelled forward as we emerge from lockdown and look to revive the global economy. This will be driven by a change in consumer behaviour as we enter the ‘new normal’ and increased pressure for nations to get more serious about addressing environmental concerns.

“Here in the UK there is significant support within the business community for future government stimulus measures and corporate bailouts to take account of our net-zero climate target. We’ve already seen a group of 200 business leaders pressing the government to align its economic recovery plans with the UK’s legislated target of net zero emissions by 2050 at the latest. Meanwhile the UK government is understood to be working on a net-zero sector deal, which we expect to be announced later this year.

“With post-COVID stimulus packages due to be announced across the world, this situation is not unique to the UK. We can expect many of these packages to be linked with measures that will increase the pace towards cleaner energy.

“We’ve already seen significant investment into green energy by some major players and, although the current economic conditions is putting a huge financial strain on the energy sector, we are seeing fewer immediate cuts to low carbon projects.

“The energy transition though, has never been about journeying entirely from fossil fuels to clean energy but rather finding a balancing point somewhere between the two. The petrochemicals required for face masks and other PPE used in the fight against COVID-19 are not easily replaced. Similarly, as the infection risk falls and people begin to travel, we will see an initial increased demand for petrol and diesel in advance of longer term investment to promote electric vehicles.”