North Sea windfall tax to end in 2030 as Aberdeen becomes ‘clean capital’

Ed Miliband is signalling a shift from oil to renewables in a move he hopes will transform Aberdeen into the capital of clean energy.

The UK Energy Secretary opened a consultation on Labour’s promise to end North Sea exploration.

The shift from oil exploration raised concern that production will be replaced with imports, while damaging domestic jobs.

He also confirmed the energy profits levy will end in 2030.

The government intends to replace that with a new regime which would respond to future shocks in oil and gas prices.

“For decades the North Sea has powered our energy future,” Mr Miliband told the P&J.

“I believe that it can also do so in the decades ahead.

“That is what our consultation issued today seeks to do – continuing oil and gas production for decades to come and taking the steps to make Aberdeen and north-east Scotland the clean energy capital of our country.”

Future of oil and gas

Existing oil and gas fields would be “maintained” while production plays a role for “decades”.

A successful transition from fossil fuel-reliant jobs would create “tens of thousands” of new roles in offshore renewables by 2030, the government says.

The consultation includes delivering the government pledge not to issue new licences to explore new oil and gas fields.

Meanwhile, the government announced £55 million for the Port of Comarty Firth, which it says will secure facilities to develop floating offshore wind farms in the UK.

David Whitehouse, chief executive of industry body OEUK, said the consultation commitment is important.

“Today’s consultations, on both the critical role of the North Sea in the energy transition and how the taxation regime will respond to unusually high oil and gas prices, will help to begin to give certainty to investors and create a stable investment environment for years to come,” he said.

‘Do we produce our own oil – or import?’

Russell Borthwick, chief executive of Aberdeen and Grampian Chamber of Commerce, said the UK could produce more oil.

“It is a settled fact that we will continue using oil and gas for up to a fifth of our energy out to 2050, so we now face a choice: do we produce our own and reap the economic benefits, or do we simply import that energy from elsewhere?” he said.

The energy levy was introduced by the Tories at 25% until 2025. It rose to 35% until 2029.

Under Labour, it was extended to 2030 and increased by 3%.