UK ENERGY EXCELLENCE: AN INTERNATIONAL MARKETING STRATEGY Ebook

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					UK ENERGY EXCELLENCE:
AN INTERNATIONAL
MARKETING STRATEGY FOR
THE UK’S ENERGY BUSINESS
Contents


     Foreword                                                  3
01   The UK Energy Excellence marketing strategy               6
     – Introduction                                            6
     – Objectives                                              7
     – Marketing framework                                     9
     – A proposition and messaging for UK Energy              10
02   Key strategy recommendations                             12
03   The prototype UK Energy mapping tool                     14
04   UK solutions to global energy challenges                 18
     – The energy sector landscape                            18
     – The UK’s key strengths                                 22
05   Energy opportunities for the UK                          27
06   Strategy delivery                                        30
07   Conclusion                                               32




                                            Wind farm, Ovenden Moor, West Yorkshire
Foreword


Energy is vital for our existence, and sustainable
energy is key to our future.
We are all aware of the challenges posed by climate
change and the need to work collaboratively with
other countries to cut carbon emissions.
As global demand for energy grows, with greater             demonstrates our key strength in providing solutions –
competition for energy resources worldwide, we need         packaging together skills, innovative technologies,
to come up with better solutions and more effective         finance and experience to respond to global challenges
technologies to ensure a sustainable energy future.         in the energy sector.
The Energy White Paper published earlier this year set      With all this excellence available, we need to better
out our policy proposals to address these issues: this      capitalise on our expertise and innovation to make sure
strategy looks at the expertise we in the UK have to meet   that we grasp every opportunity available for the UK
future global energy challenges and opportunities. The      Energy business.
UK is well placed to make a significant contribution to
                                                            Our UK Energy Excellence marketing strategy proposes
helping ensure the world has cleaner, more sustainable
                                                            some ideas about how we could market this vibrant
sources of energy.
                                                            business sector better. For the first time, we have
UK businesses have extensive expertise across all           produced a prototype database of our expertise across
areas of the energy sector. The UK has a highly regarded    the whole energy field, listing key areas of expertise
investment environment and established trading              and opportunities available to exploit that expertise.
relationships with global energy markets, and our           We hope this resource will be a starting point for the
businesses provide products and services that are           successful global promotion of the UK Energy sector.
innovative and potentially world–beating.
                                                            In partnership with business, we can work to identify
There are major opportunities for the UK to use its         and prioritise key global opportunities, so that the UK
expertise in the energy business globally across a range    and UK businesses become world leaders in energy,
of areas. From new clean coal and carbon capture            working towards a sustainable future for all.
infrastructure development, to the more effective
management and operation of mature North Sea assets,
from the technology development of new renewable
sources of energy to the advancement of photovoltaics
technology, to name but a few examples. The UK
has businesses that are geared up to meet these             John Hutton
global opportunities.                                       Secretary of State for Business Enterprise
The UK has a strong research base, with excellent           and Regulatory Reform
academic institutions and a skilled and experienced
workforce able to deliver on commercialising
technological innovation. We are well positioned
to expand as a global ‘hub’ for energy technology
development and application. Above all, this strategy




                                                                                                                      3
4
01
UK energy companies currently
generate revenues of more
than £90 billion from domestic
and international business,
and employ 600,000 staff.
This is expected to rise to
£200 billion and one million
employees by 2030.




Offshore oil and gas exploration rig

                                       5
    The UK Energy Excellence marketing strategy


    Introduction                                                   The UK Energy Excellence marketing strategy is for
                                                                   everyone working in UK Energy or involved in its future.
    The UK Trade & Investment five-year strategy                   The period of extended consultation for this strategy
    Prosperity in a Changing World was launched in July            involving sector experts, UK businesses and government
    2006. Acknowledging the increasingly competitive               departments has shown that the industry can work
    global market for international trade and investment,          together productively as one sector.
    it addresses the need for a more coherent marketing
    strategy to promote the UK’s strengths.                        The new strategy sets out a clear direction and plan of
                                                                   action that will help focus collective efforts and achieve
    The UK Energy sector is thriving. But if it is to enhance      shared goals. This means joined-up marketing will
    its competitive position still further, it needs to become     improve the targeting and co-ordination of marketing
    more international. It has therefore been pinpointed as        initiatives. It means understanding the customer journey
    one of the priority sectors for action by the Government.      and decision-making process, so that everybody delivers
    Not only must it build on its existing track record, it also   the right message at the right time. It means working
    needs to fulfill its potential in world markets.               together with a shared approach and goals, making the
    The strategy examines global energy challenges looking         very most of joint resources.
    out to 2030. It highlights the key opportunities for the       Above all, it means telling the story of UK Energy.
    UK to make a leading contribution to the provision of
    the technology, innovation and expertise needed to
    supply better, cleaner, higher value energy, including
    low carbon options.
    The strategy also launches the first integrated
    mapping tool of the UK’s large, diverse and growing
    energy business.




      What is UK Energy?
      For the purposes of this new strategy,                       The strategy at this time excludes energy sector
      UK Energy encompasses:                                       businesses related to some products and services
                                                                   for efficiency of energy use, road and rail vehicle
          biomass (derived from animal and
                                                                   development and petrochemical products. UK Trade
          vegetable products)
                                                                   & Investment is already working on some of these
          fuel cells                                               other areas within different initiatives.
          geothermal sources                                       The Government has recently completed a major
                                                                   public consultation on the future of nuclear power
          hydrocarbon fossil fuels (coal, oil and gas)
                                                                   ‘The Future of Nuclear Power: the role of nuclear
          hydroelectric                                            power in a low carbon economy’.
          nuclear power                                            The Government is currently considering the responses
                                                                   to that consultation and this strategy does not
          solar
                                                                   encompass the proposals addressed by that consultation.
          tide
          transmission, distribution and storage
          wave
          wind




6
Objectives
The top-line objective is to speak with a single
compelling voice across the world, positioning the
UK as a destination of choice for energy trade and
investment. Both trade and inward investment together
are key drivers for UK prosperity, and UK Trade &
Investment focuses jointly on both. Three key principles
will support this aim. They are the adoption of a
joined-up approach; business and government working
in partnership; and the alignment of marketing
communications under the compelling overarching
UK message ‘A Springboard for Global Growth’.
What is the aim of the UK Energy Excellence
marketing strategy?
The objective of the UK Energy Excellence marketing
strategy is to mobilise marketing capabilities right across
the sector so that everyone plays a part in celebrating       MCT
and promoting UK Energy innovation and achievement.
That means:                                                   Marine Current Turbines (MCT) was established in 2000,
                                                              and since then has developed the world’s first sizeable
    Agreeing on and communicating strengths and main          offshore generation system.
    messages to promote the UK’s competitive position
    in energy over the next five years.                       The UK is leading the way in this growing industry, with three
                                                              established testing centres, 17 live projects and R&D conducted
    Sharing insights, knowledge and best practice             at seven universities. MCT is at the forefront of this innovation,
    to make the best use of available resources.              pioneering the development of tidal stream turbines, its
    Integrating the promotion of trade and investment         technology delivers cost-effective energy with minimal
    across all energy sectors.                                environmental impact.

    Creating a framework that can be implemented              MCT aims to develop this novel product on a commercial
    effectively by a range of partnering organisations.       scale and this is being achieved through a phased R&D
    And bring together government, business and               programme. The company has received significant financial
    research organisations to achieve maximum impact.         support from BERR and from the European Commission.

Success will see the UK Energy sector:                        The UK has around half of the European tidal stream resource
                                                              and 10-15 per cent of the known global resource. This makes
    Extending its expertise across energy sub-sectors         it the world’s most attractive location for marine energy
    to meet the challenges of the evolving global             development. In addition its oil and gas heritage provides
    energy landscape.                                         expertise and an established offshore infrastructure.
    Helping emerging, cutting-edge businesses learn           Peter Fraenkel, Technical Director Marine Current Technology
    from more established sectors.                            said: “Tidal power could make more than a five per cent
    Boosting its research and development expertise           contribution to our electricity needs within the next 20 years.
    and bringing new ideas to market more quickly.            This is equivalent to the output of over three nuclear
                                                              power stations.”
    Building on the UK’s strong competitive position,
    leading to:
–   an enhanced international reputation
–   a rise in investment and trade
–   job creation
–   increased revenues
–   improved customer satisfaction.


                                                                                                                                   7
    The UK energy sector export
    value is estimated to reach
    £19.4 billion in 2007.




8
Marketing framework
A new framework for marketing activity is being
proposed. It separates marketing (awareness raising
at the broadest level) from business development
support (matching customer needs with a specific,
tailored sales programme).
  Marketing will take place at two levels:
– For UK Energy as a whole
– For each of the sub-sectors within UK Energy
  (oil and gas, power, renewables, environment/
  climate change)
  Business development support will be separated into
  three different categories, reflecting the different
  decision-making processes involved:
– Trade
– Partnering
– Investment                                              Sharp
Marketing activity needs to entice customers to buy       Sharp first opened its site in North Wales in 1984,
into the UK Energy brand and guide them persuasively      supported with Objective One funding; and for its first
through each stage until they make a purchase,            20 years focused on the production of video cassette
partnering or investment decision.                        recorders and microwave ovens. In 2004, the decision
Who is the target audience?                               was made to establish the production of the company’s
                                                          solar modules for the European market at Wrexham –
The target audience in marketing UK Energy is the         effectively replacing the production of VCR units.
customer. Customers are defined as end purchasers:
                                                          Sharp’s strategic location in North Wales has proved a huge
   Current and potential buyers of UK goods               factor in the company’s rapid growth and ongoing success. The
   and services.                                          ability to tap into a readily available skilled workforce and a
   International investors (who may already be involved   highly supportive training network has seen their solar power
   in the UK).                                            production facility win a major share of the European market.

There is already a process for prioritising markets       Today, the UK base is one of the Japanese company’s most
and audiences, led by UK Trade & Investment and           technically advanced sites. The Wrexham facility specialises
its business, government and other sector experts.        in the manufacture of advanced mono and polycrystalline
This is the starting point for UK Energy marketing.       photovoltaic products.

It is worth noting that although UK business is an        Fast-growing European demand is driving expansion at the
important stakeholder and marketing partner, it is not    factory at an unprecedented rate. The UK’s domestic market
a target audience for marketing communications.           is also growing and holds significant growth potential over
                                                          the next ten years.
                                                          Gordon Butler, General Manager, said: “It’s hard to imagine
                                                          being able to set up a facility like this without the skilled
                                                          workforce we had readily to hand. We also benefited
                                                          greatly from the other organisations based locally, and the
                                                          fact that there is such a strong optoelectronics industry here
                                                          in North Wales.”




The Pelamis wave energy converter undergoing
a phased testing programme in Orkney
                                                                                                                            9
     A proposition and messaging
     for UK Energy
     The UK is able to make a significant global contribution
     to the pace of the development of cleaner, more efficient
     and more sustainable energy sources. This is the vision
     for the future and the basis from which all messaging
     for UK Energy will develop.
     The key proposition for UK Energy will provide a unified
     theme which will guide all marketing activity. We plan
     to create a full set of detailed messages to promote the
     sector, in partnership with business. These will guide
     the UK’s global marketing communications.
     We will focus on the UK’s Energy Excellence status
     and key strengths. In that the UK has:
        Proven major project management and engineering
        capability delivering engineering solutions with
                                                                 Doosan Babcock
        professional impartiality.
                                                                 Doosan Babcock, the utility boiler supplier, has spent
        Expertise in managing assets to maximise
                                                                 over 110 years following the market internationally and
        efficiency and value.
                                                                 developing trade links successfully from its UK base.
        Design, manufacture and installation of
                                                                 Over the last ten years, the business has focussed on the
        advance equipment for improved reliability
                                                                 Chinese market, where highly efficient supercritical boilers now
        and system uptime.
                                                                 dominate the new build power market with around one new unit
        World renowned academic institutions and                 per week coming on stream; ten years ago such technology was
        leading-edge research and development to drive           only used in Japan and Europe.
        new technology development.
                                                                 Following the upsurge in the market in the US, Doosan Babcock
        Leading expertise in creating, managing and              has built on its upgrade and service business in Atlanta and
        regulating liberalised energy utility markets.           secured the 750MW supercritical boiler order for the Eon-US
                                                                 plant, Trimble County.
        Learning and skills training across the entire
        energy spectrum.                                         Europe and the UK are now thriving markets for coal fired power
                                                                 plants and Doosan Babcock signed an order on 3 October 2007
        The City of London as a global financial and
                                                                 for a new power plant in Germany. This plant incorporates
        trading centre, along with a full range of
                                                                 Doosan Babcock’s advanced “Posiflow™” furnace design with its
        professional services, making the UK a key
                                                                 attendant benefits of reduced pressure drop, improved low load
        destination for new energy development.
                                                                 operation and reduced feed pump power.
     During the implementation phase, we will seek to
                                                                 Graham Welford, Doosan Babcock Sales Manager – Europe
     engage the right resources in prioritised countries to
                                                                 said: “The contract award for our advanced technology is a
     help tailor the key messages and maximise their impact.
                                                                 major milestone, building on our earlier Posiflow™ orders in
     This will address their specific market strengths,
                                                                 China. The order reinforces our company’s position as a major
     customer needs and cultural differences.
                                                                 expert of power generation equipment.”




10
02
Globally, more than US$22 trillion*
a year will be spent supplying
energy by 2030. New technology
driven growth sectors, including
clean coal power generation,
non-hydrocarbon transportation
fuel (biofuels and fuel cells) and
renewable energy (wind, wave,
tide stream and bioenergy
from waste) could account
for more than US$2 trillion* of the
total, with an increasing trend.


* (2006 dollars)

                                      11
     Key strategy recommendations


     To maximise opportunities in the global energy market
     the whole of the UK Energy business and government
     must work in close partnership. To this end a cross
     government, cross industry, cross UK Energy sector
     marketing strategy board will be established to drive
     forward this strategy. UK Trade & Investment will also
     better integrate its own work promoting trade and
     inward investment in the energy sector in order to
     support and provide secretariat for the sector marketing
     strategy board. The Board will look to:
        Establish, in partnership with business, a UK Energy
        mapping tool which will allow companies across
        the UK Energy supply chain to identify areas of
        opportunity within their current sectors of expertise
        as well as potential for cross-sector business.
        Develop an over-arching UK Energy brand, to
        better co-ordinate and demonstrate the strengths
        of the sector and develop a focus for marketing           AMEC
        UK Energy businesses internationally, particularly
                                                                  Decommissioning is a long-term process of high technical
        in emerging and challenging, but potentially
                                                                  complexity and must be conducted in a safe and cost
        high-growth markets.
                                                                  effective manner. To support the safe decommissioning
        Prioritise sub-sectors for significant trade and inward   of power stations across Eastern Europe and Russia,
        investment marketing campaigns to be facilitated by       AMEC provide technical and project management
        UK Trade & Investment working closely with energy         services whilst helping to transfer knowledge and skills
        business partners.                                        gained in Western Europe to the local workforce.
        Promote international business development through        To assist the Ignalina Nuclear Power Plant (INPP) in this
        specific market strategies designed to deepen trade       complex task the Decommissioning Project Management Unit
        and investment relationships with both national           (DPMU), led by AMEC, was established to ensure an integrated
        and international influential energy investors            approach to the project activities, all of which had to be
        and decision makers in targeted OECD and high             fully consistent with the overall decommissioning plan
        growth markets.                                           and radioactive waste management strategy of Lithuania.
        Use the mapping tool as a source to develop               Closure of the Ignalina Nuclear Power Plant was a condition
        marketing material to showcase UK Energy sector           for Lithuania’s accession to the EC and is currently the largest
        capability and opportunities internationally.             power rated reactor in the world under going decommissioning.
        Take a whole sector approach to energy within             As part of this project, the DPMU established an extensive
        UK Trade & Investment.                                    training and development programme for staff which includes
                                                                  commercial and project management skills. The aim is
     The Board will develop a strong link to the recently
                                                                  the establishment of an efficient and effective INPP-DS
     established Energy Technologies Institute and other
                                                                  organisation who, in a planned and orderly way, will take
     energy related organisations and work in partnership
                                                                  over the management of all decommissioning activities
     with key national Government departments, including
                                                                  in the future. The team also offers advice on how to avoid
     the Department for Business, Enterprise and Regulatory
                                                                  problems associated in the move from an operating to a
     Reform (BERR), the Foreign and Commonwealth Office
                                                                  decommissioning site, an area that is often over looked.
     (FCO), the Department for Environment Food and
     Rural Affairs (DEFRA), the Department for Innovation,
     Universities and Skills (DIUS), the Export Credits
     Guarantee Department (ECGD) as well as regional
     and devolved government.



12
03
Globally the UK is the most
attractive destination for
offshore wind and has moved
into joint 2nd position as an
inward investment location
for renewables.




                                13
     The prototype UK Energy mapping tool


        UK ENERGY EXCELLENCE:
        AN INTERNATIONAL
        MARKETING STRATEGY FOR
        THE UK’S ENERGY BUSINESS




     A prototype UK Energy mapping tool has been                  Level 2 takes you a stage further and provides detail
     designed to support the strategy findings and future         of the following energy sectors:
     strategic planning.
                                                                     Gas utilisation and refining
     It is the first integrated mapping tool of the UK’s large,
                                                                     Large scale renewable power generation
     diverse and growing energy business.
                                                                     Non renewable thermal power generation
     This new tool will allow companies across the UK Energy
     supply chain to identify areas of opportunity within            Nuclear
     their current sectors of expertise as well as potential
                                                                     Oil, gas and coal (extraction)
     for cross-sector business initiatives.
                                                                     Renewable transport fuels
     The UK Energy mapping tool will be maintained and
     updated to promulgate global opportunities for UK               Small scale renewable power generation
     Energy and to showcase and market UK excellence,
                                                                     Transmission, distribution and energy storage
     capacity and expertise internationally.
                                                                  Level 3 then allows you to capture more in-depth market
     The mapping tool features four different levels. The first
                                                                  knowledge on the business areas covered by each of the
     level provides an overview of the energy technology
                                                                  level 2 energy sectors.
     growth market segments.




14
    UK ENERGY EXCELLENCE:
    AN INTERNATIONAL
    MARKETING STRATEGY FOR
    THE UK’S ENERGY BUSINESS




Level 4 allows you to cross-reference established UK
service and supply capabilities to match with new
potential opportunities in the sub-sectors of the energy
mix. The service and supply capabilities are split into
the following categories:
   Professional services
   Management services
   Project and operational engineering services
   Specialist technical services
   Equipment design and manufacture
   Components and materials
   R&D
The UK Energy mapping tool is at the prototype stage
and as part of the strategy implementation phase
will be developed further with UK business to its
completion stage.




                                                           15
     Foster Wheeler
     The UK has a global reputation for world leading             The expansion project, which is expected to have a final cost
     professional services which attracts many companies          of under A$2.6 billion (approximately under £1.1 billion), will
     who are looking to manage large and complex projects.        enlarge the existing LNG plant to become one of the biggest
     Several major multi-national engineering contractors         in the Asia Pacific region. The scope includes a fifth LNG
     have key operations in the UK and this is particularly       processing train of 4.4 million tonnes/year, an acid gas removal
     evident in the area of Liquefied Natural Gas (LNG),          unit with a single absorber (solvent aMDEA®), a fractionation
     which is a growing global market.                            unit and a jetty spur and second loading berth. Two power
                                                                  generators, a boil-off gas compressor and a fuel gas compressor
     Foster Wheeler, a global engineering, procurement and
                                                                  are also included.
     construction (EPC) company, has key LNG skills based
     in Reading in the UK.                                        In addition to the technical challenges, the construction and
                                                                  implementation presented a unique set of challenges which
     The Reading operation is leading the EPC joint venture
                                                                  resulted in the adoption of a modular approach to design
     undertaking a major expansion of LNG facilities in Western
                                                                  and construction. This enabled a wider product and fabrication
     Australia for the North West Shelf Venture, operated
                                                                  market to be used. The facility comprises 75 separate
     by Woodside.
                                                                  modules, the largest being 1,800 tonnes, and is the world’s
                                                                  first onshore modular LNG liquefaction train. It is currently
                                                                  in the commissioning phase and is on track to meet its
                                                                  completion target.



16
04
Non hydro renewable energy
sources are expected to increase
their share of energy supply to
7% worldwide by 2030. Wind
power is currently considered
the most viable large scale
renewable energy option.
The UK currently has one of
the largest installed capacities
in Europe at 2,176MW.




                                   17
     UK solutions to global energy challenges


     The energy sector landscape                                                                This increase will support global economic growth,
                                                                                                especially in rapidly expanding markets such as China
     The world energy landscape is undergoing a dramatic                                        and India, which account for 70 per cent of the increase.
     transformation, driven by the need for more energy,
     cleaner energy and more secure sources of energy.                                          Power generation to supply electricity will account
     On current trends, worldwide demand for energy is                                          for just under 50 per cent of the global increase and
     expected to rise by just over 50 per cent by 2030,                                         transportation fuels approximately 20 per cent.
     reaching over 17 billion tonnes of oil equivalent (TOE)
     per year.


                                                                                                                                 Coal       Oil      Gas     Power
                               5,000
                               5000


                               4,500
                               4500


                      4000
                        4,000



                      3500
                        3,500



                      3000
                        3,000
     US$ billion (year 2006)




                      2500
                        2,500



                      2000
                        2,000



                      1500
                        1,500



                      1000
                        1,000



                               500
                                 500



                                  0
                                   0   Kazakhstan Venezuela   Brazil   Russia   Middle East Canada   Africa    India    North      Europe       Rest       China
                                                                                                                       America                of World


     Source: IEA World Energy Outlook 2007 / OPEC World Oil Outlook 2007




18
The global energy landscape in 2030


                                                                           Coal       Gas        Hydro   Bioenergy and Waste
                                                                           Oil        Nuclear            Other renewable

                           6,000


                           5,000
Tonnes of oil equivalent




                           4,000


                           3,000


                           2,000


                           1,000

                              0
                                   1980       2004                      2010                    2015                  2030
Source: IEA World Energy Outlook 2007 / OPEC World Oil Outlook 2007




While hydrocarbons (coal, oil and gas) will continue                  Globally, more than US$22 trillion (2006 dollars) a year
to dominate supply in the period to 2030, climate                     will be spent supplying energy by 2030, according to
change is driving the pace of new technology aimed at                 the International Energy Agency (IEA). New technology
delivering cleaner, cost-effective, carbon-reduced energy             driven growth sectors, including clean coal power
sources. The major global energy investors including                  generation, non-hydrocarbon transportation fuel
major power companies, international and national oil                 (biofuels and fuel cells) and renewable energy (wind,
companies are taking the lead. By carrying out extensive              wave, tide stream and bioenergy from waste) could
research and application programmes, they are tipping                 account for more than US$2 trillion of the total, with
the balance towards renewable energy.                                 an increasing trend.




                                                                                                                                 19
     Energy investment by major sub-sectors to 2030
     (2006, US$trillion)


                                      0.2                        Electricity Generation               11.6
                                                                 Power Generation                      5.3
                                                                 (Steam Coal                           1.8)
                                                                 (Clean Coal                           1.5)
                                0.6                              (Gas Fired                            0.8)
                                                                 (Renewable                            0.6)
                                                                 (Hydro                                0.3)
                                                                 (Nuclear                              0.2)
                                                                 (Fuel Cells – Static                  0.1)
                5.3                                              (Fuel Cells – Transport              0.03)
                                                                 Distribution                          4.3
                                                                 Transmission                          2.0

                                                                 Gas                                   4.2
                                                                 Exploration and Production            2.2
                                                    11.6         (Unconventional Gas                   0.3)
                                                                 LNG/GTL                               1.0
                                                                 Gas Transportation                    1.0

                      4.2
                                                                 Oil                                   5.3
                                                                 Exploration and Development           3.8
                                                                 Refining                              1.2
                                                                 Oil Transportation                    0.3
                                                                 (Unconventional Oil                   1.5)


                                                                 Coal Extraction                       0.6
     Source: IEA World Energy Outlook 2007 /
     OPEC World Oil Outlook 2007                                 Biofuels                              0.2




     UK Energy companies currently generate revenues of        Energy projects are becoming more complex and often
     more than £90 billion from domestic and international     involve a combination of technologies. Many are located
     business, and employ 600,000 staff. This is expected to   in environmentally sensitive, harsh and remote locations.
     rise to £200 billion and one million employees by 2030.   International energy companies aim to develop major
                                                               projects which give economies of scale and justify
     Supplying energy to the rest of the world requires
                                                               the development of new regional infrastructure for
     extensive management expertise, as well as highly
                                                               feedstock and product transportation, and transmission
     skilled personnel and cutting-edge technology.
                                                               and distribution. In addition to new capital projects,
                                                               existing assets will need to be operationally managed,
                                                               maintained and repaired. By 2030, this will cost
                                                               approximately US$6 trillion a year, according to estimates.




                                                                                           Pipeline near Sakhalin gas and power plant, Russia

20
Worldwide demand for energy
is expected to rise by just
over 50% by 2030, reaching
over 17 billion tonnes of oil
equivalent per year.
                                21
     The UK’s key strengths
     Against this global energy backdrop the UK Energy
     industry has a number of key strengths, which include:
     World class major project management and engineering
     capability, providing engineering solutions with
     professional impartiality
        Ten of the world’s largest prime contractor
        companies have regional head quarters in the
        UK employing over 40,000 personnel for the
        implementation of UK and international projects.
        Major project experience includes integrated
        upstream and mid stream (LNG, GTL) gas
        developments, including the Middle East and
        North Africa.
        Engineering for the development of supercritical
        boilers for major power generators, specifically      Alstom Scope
        in China and in India and to provide up to a
        50 per cent biomass co-firing option.                 The 6x3 50 MW Arnot coal fired power station in the
                                                              Mpumalanga Province of the Republic of South Africa
        Engineering to optimise and integrate IGCC            is one of Eskom’s first modern coal fired plants. The plant
        (Integrated Gasification Combined Cycles) and         began operation in 1975 and is now approaching the end
        CCS (Carbon Capture and Storage) technology           of its nominal life.
        in the UK and Europe.
                                                              The need for continued production from the plant is crucial in
        The development of deepwater (1,000 metre plus)       helping South African utility, Eskom, overcome the country’s
        oil and gas reserves involving advanced floating      acute power shortages. Originally, Eskom issued a tender for
        and subsea production technology.                     upgrading the steam turbines and boilers as separate packages.
                                                              But after discussions with the customer, Alstom presented a
                                                              combined bid to supply the boiler and steam turbine for each
                                                              unit as a single integrated retrofit package.
                                                              Presenting an integrated package delivered by a single company
                                                              helped the customer achieve its goals of a guarantee of
                                                              additional power for a specified lifetime combined with
                                                              seamless execution of the total project, thus reducing overall
                                                              project risk and an additional 15 years of plant operation.
                                                              Having one company to manage the whole project was seen as
                                                              a key benefit to Arnot and, in addition, removed the interfaces
                                                              that would result if different vendors were used for retrofitting
                                                              the steam turbines and boilers scopes separately.
                                                              Completion of the work is due at the end of 2010 and has had
                                                              significant involvement from the ALSTOM operations at Rugby
                                                              in the centre of England.




22
World-class expertise in operational management
of energy assets and infrastructure
   A strong area for the UK Energy sector, grown out of
   long-term experience working for both international
   and nationally-owned operators.
   UK companies with this area of expertise are currently
   supporting the management of over 4,000 energy
   producing assets worldwide.
   Operational management support for mature assets,
   together with extension, abandonment deferral and
   additional value creation, is well established in the
   UK and overseas markets.


World leading expertise in creating, managing and
regulating liberalised energy utility markets
   For example, the UK pioneering of price control          Oxyfuel
   regulation for transmission in the early 1990s to        To achieve the global target reduction in CO2 emissions
   provide strong incentives for companies to become        of some 60 per cent by 2050, carbon dioxide capture and
   ever more cost-effective.                                permanent underground storage (CCS) will be necessary.
   The UK has already prepared a preliminary regulatory     Oxyfuel firing is the combustion of fuel in a medium comprising
   framework for CCS (Carbon Capture and Storage)           oxygen plus recycled flue gas. It offers a means of generating
   in consultation with research, engineering and           carbon dioxide (CO2) rich flue gas requiring minimal treatment
   investor organisations.                                  prior to sequestration.
                                                            The consortium, from industry and academia, for OxyCoal-UK
The City of London as a global financial                    Phase 1 is led by Doosan Babcock and includes Air Products
and trading centre                                          PLC, E.ON UK PLC and RWE npower PLC, BP Alternative Energy
                                                            International Limited and the University of Nottingham and
   Providing access to a full range of financing            Imperial College London. The consortium is developing a
   including a strong venture capital sector.               competitive oxyfuel firing technology based on the integration
   World class professional services including legal,       of well proven and innovative power plant design components.
   technical, environmental, economic and market            Supported by the Technology Strategy Board and the
   advisors and IT specialists.                             Engineering and Physical Sciences Research Council, the
   Carbon management and brokering services,                project is the first step in providing confidence to proceed
   exchange trading, credit clearing, risk management,      to full-scale demonstration of oxyfuel firing technology.
   as well as a full range of analytical, monitoring and    The project is an example of collaborative research and
   verification services.                                   development, which is one of the primary means by which
   London has become the centre for the emissions           the Government supports innovation.
   trading markets as well as energy trading. The UK
   Emission Trading Scheme has pioneered green gas
   (GHG) emission trading developed largely from
   within the UK power sector.




                                                                                                                              23
     Design, manufacture and installation
     of advanced equipment
        Ongoing programmes to use the latest approaches,
        new materials and advanced electronic and digital
        technology aimed at improving safety, reliability,
        energy consumption and time across all aspects
        of the energy supply chain.
        Particular strength in metering equipment and
        systems, boilers, steam turbines, motors, valves
        and other specialist fittings.
        Design, manufacture and installation of high-voltage
        transmission network equipment and power
        distribution equipment.


     Internationally renowned academic and
     research institutions, contributing to new                  A&N Plant
     energy technology advancement
                                                                 A&N Management, trading as A&N Plant, located
        More than 40 establishments in the UK with core          in St. Helens, Merseyside and Amersham in
        research skills in areas such as combustion, process     Buckinghamshire, England.
        and chemical engineering and molecular and
        biological sciences.                                     Today it is the world’s largest stockist of specialist equipment to
                                                                 the fabrication, heavy engineering and construction industries,
        Extensive research and development programmes            but back in 1991, with no international trade, the business was
        encompassing thermal and biological processes            facing collapse.
        related to bioenergy development, production of low
        cost silicon for photovoltaic applications, static and   David Rainger, business development manager, explains:
        transport-based fuel cells, hydrocarbon-enhanced         “When I joined A&N Plant in 1991 we had no export sales
        recovery techniques, and digital technology for          and within a couple of years our UK business had all but
        monitoring, measuring and controlling oil and            disappeared. We realised that in order to survive we would
        gas production.                                          have to look at new markets, especially in the Middle East
                                                                 and Denmark.”
                                                                 We visited Denmark three years ago as part of a trade mission
                                                                 and worked with the Danish Embassy to provide introductions
                                                                 to relevant companies and agents and, as a result, A&N has
                                                                 since sold over £1 million worth of equipment in this market.
                                                                 In addition to Denmark and Saudi Arabia, A&N Plant today
                                                                 supplies a range of other countries including America, Chile,
                                                                 The United Arab Emirates, Turkey, Bahrain, Holland, France,
                                                                 Spain and Azerbaijan.




24
05
The UK is strong in the
development of trading systems.
All the world’s major energy
accountancy companies
operate from regional
headquarters in the UK.




                                  25
     Power generation mainly for
     electricity supply, is likely
     to account for almost 50%
     of growth in energy demand.
26
Energy opportunities for the UK


The UK is able to make a significant contribution to       Key opportunities are now emerging in
the pace and deployment of innovation to provide the       the following areas:
world with cleaner, more efficient and more sustainable
                                                              new clean coal and carbon capture and storage
sources of energy, working in close cooperation with its
                                                              infrastructure development, building on the UK’s
energy investor customers.
                                                              CCS demonstration project
Building on its established expertise, extensive range
                                                              the development of near-commercial coal deposits
of energy sector products and services, highly reputed
investment environment and well established trading           the management and operation of mature North Sea
relationships with growth energy sector markets, the          assets with the development of satellite reservoirs of
UK is well positioned to expand as a worldwide ‘hub’          oil and gas
for energy technology development and application.
                                                              high pressure, high temperature hydrocarbon assets
There is huge potential for overseas trade. A number
                                                              nuclear decommissioning
of developing markets – from China, India, Kazakhstan
and Russia to Libya, Nigeria, Venezuela and Brazil –          bioenergy technology development
offer major opportunities for UK expertise and leading        and production infrastructure
edge technologies across all aspects of the energy
                                                              advancement of photovoltaics technology
sector spectrum.
                                                              and manufacturing capacity
The UK Government White Paper on Energy (May 2007)
                                                              wind turbine manufacture
sets out the need to secure UK Energy supplies and meet
climate change commitments. This will lead to a major         the production of fuel cells for both static
home market in renewable and clean energy as well as          and transportation uses
increasing the focus on extracting maximum value from
                                                              the development of smart networks connecting
the UK’s own traditional energy assets.
                                                              renewal sources to the UK grid, with the possibility
The combination of the UK’s strong domestic market            of extensions into Europe
and its excellence across the entire energy industry
creates major opportunities for UK companies to
secure overseas business and for the UK to attract
inward investment.




Electricity pylons

                                                                                                                       27
     This is a preview of the technology-led opportunities
     on the new energy landscape. As demonstrated on the
     prototype UK Energy mapping tool.




28
06
With over 40 million design
engineering man hours
per annum executed by UK
based project engineering
companies, the UK is a
recognised global centre
of engineering capability,
supporting a full range
of energy projects.




                              29
     Strategy delivery


     Delivering the new marketing strategy                        Using direct, public and private channels to market
     Research shows that business leaders can be very good        Government and UK business partners offer many ways
     at persuading potential customers. They speak with           to reach the target audience. Three marketing channels
     authority of personal experience and they have first-        will be developed:
     hand knowledge of how the global energy market works.
                                                                     Direct channels: Communications delivered directly
     This makes their advocacy particularly powerful
                                                                     from the UK Energy Marketing Strategy Board,
     and convincing.
                                                                     often using creative agencies.
     In delivering the new marketing strategy, it makes
                                                                     Public channels: Communications delivered by
     sense for business itself to have the strongest voice –
                                                                     the UK Government and its agencies, devolved
     guided, supported and amplified by Government and
                                                                     administrations and regional organisations.
     its agencies.
                                                                     This channel is globally far-reaching as it includes
     The new UK Energy Marketing Strategy Board,                     the network of Foreign and Commonwealth
     which will be made up of cross business, sector and             Office overseas.
     government representatives, will manage activity
                                                                     Private channels: This strategy offers many
     across the energy sectors, with UK Trade & Investment
                                                                     opportunities to bring together industry and
     supporting all marketing co-ordination. It is likely
                                                                     its trade associations to promote UK Energy.
     to lead work in these areas:
        Identifying, in consultation, priority countries
        and sub-sectors.                                          A shared vision
        Refining and agreeing the core proposition                With many different organisations involved, it will be
        and messages.                                             important to achieve clarity and consistency about
        Identifying, securing and allocating funding              our purpose, messages and style of communication.
        for activities.                                           We will work collaboratively to set out key principles
                                                                  for marketing and delivery.
        Planning marketing activities, drawing from the
        current pipeline of recommendations and ideas.
        Managing and evaluating marketing activity,               Evaluating the strategy
        eg in relation to UK reputation.                          Understanding how well the strategy is progressing
        Country-specific tailoring of marketing strategies        helps indicate where to focus efforts in the future.
        and communications.                                       One of the roles of the UK Energy Marketing Strategy
     The new marketing strategy is the result of extensive        Board will be to look at ongoing effectiveness,
     consultation with business, Government and                   evaluating the success of specific marketing activities
     industry experts.                                            and measuring performance against core objectives.
                                                                  It will also be important to benchmark performance
     In the delivery phase it will be important to build on       against that of the UK’s competitors.
     this by involving marketing partners who have a shared
     interest in growing the UK Energy sector. They will
     include UK businesses; trade and cluster organisations;
     research organisations and universities; government
     departments and agencies; and regional development
     agencies and devolved administrations.
     All will need to be involved in a range of different ways.
     Roles will need to be clearly defined and expectations
     and levels of commitment agreed.




30
07
Within the last ten year period
the UK has developed as a centre
for renewable energy with over
US$30 billion raised for project
and company investment.




                                   31
     Conclusion


     The UK Energy Excellence marketing strategy is designed
     to make the most of the UK’s expertise and deliver
     marketing messages in a more effective way that helps
     to drive increasing international trade and inward
     investment. It aims to work across the diverse nature
     of the energy sector to achieve a joined-up market
     approach and maximise the international business
     profile of UK Energy Excellence.
     The launch of this strategy marks the start of a process
     to implement the actions outlined in this document,
     including the development and use of the prototype
     UK Energy mapping tool.
     All elements are in place to plan and deliver a well
     co-ordinated marketing approach on a global scale,
     with consistent messaging and one clear voice.
     We have a great story to tell – the energy sector in the
     UK has a great track record and a great future. Boosting
     supply to satisfy growing global demand, it will deliver
     better, cleaner energy through to 2030 and beyond.




                                                                Geophysicists discussing seismic survey data

32
The UK has a resource of
over 10,000 highly qualified
personnel currently engaged in
energy related R&D activities.
                                 33
     In the UK, companies, including many of the world’s          The UK Energy Excellence marketing strategy is being
     major corporations, plug directly into the heart of the      co-ordinated by UK Trade & Investment.
     global finance, global creative and professional services,
                                                                  UK Trade & Investment is the government organisation
     global media and global talent. They enjoy access to the
                                                                  that helps UK-based companies succeed in an
     world-class science and academia and link into a wide
                                                                  increasingly global economy. Its range of expert services
     network of smaller enterprises, many of which are also
                                                                  is tailored to the needs of individual businesses to
     world leaders in their fields.
                                                                  maximise their international success. We provide
     A unique multicultural and entrepreneurial economy, the      companies with knowledge, advice and practical support.
     UK is at the hub of international business, bringing the
                                                                  UK Trade & Investment also helps overseas companies
     world to a company’s door. In short, it is the gateway to
                                                                  bring high-quality investment to the UK’s vibrant
     the globe.
                                                                  economy – acknowledged as Europe’s best place from
                                                                  which to succeed in global business. We provide support
                                                                  and advice to investors at all stages of their business
                                                                  decision-making.
                                                                  UK Trade & Investment offers expertise and contacts
                                                                  through a network of international specialists
                                                                  throughout the UK, and in British Embassies and other
                                                                  diplomatic offices around the world.
                                                                  For further information about how the Energy team
                                                                  at UK Trade & Investment can assist you visit:
                                                                  www.uktradeinvest.gov.uk or
                                                                  T: +44 (0)20 7215 8000


                                                                  www.uktradeinvest.gov.uk




     Image credits
     p7    MCT
     p9    Sharp
     p10   Doosan Babcock
     p12   AMEC
     p16   Foster Wheeler/Woodside
     p21   Sakhalin Energy/Shell
     p22   Alstom Scope
     p23   Oxyfuel
     p24   A&N Plant
     p33   Mike Abrahams

     Fact sources
     The World Energy Outlook 2007 © OECD/IEA 2007, p74 and 95
     OPEC World Oil Outlook 2007
     Country Attractiveness Indices – Ernst & Young
     Industry Consultation

34
Whereas every effort has been made to ensure that the information
given in this document is accurate, UK Trade & Investment or its
supporting Departments, the Department for Business, Enterprise
and Regulatory Reform, and the Foreign and Commonwealth Office,
accept no responsibility for any errors, omissions or misleading
statements in this document and no warranty is given or
responsibility is accepted, as to the standing of any individual,
firm, company or other organisation mentioned in this document.
This document is printed on material which uses 75 per cent
post-consumer waste.
Published December 2007 by UK Trade & Investment
© Crown Copyright URN 07/1697