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Pandemic presents opportunity to strengthen UK energy supply chain with repatriation of manufacturing and engineering activity

Posted on 23 June 2020

Pandemic presents opportunity to strengthen UK energy supply chain with repatriation of manufacturing and engineering activity

NOF, the business development specialists for the energy sectors, is encouraging the government to back UK manufacturing and engineering by supporting the reshoring of supply chain activity as a result of the coronavirus pandemic.

With the Chancellor of the Exchequer due to make an economic statement at the start of July, NOF believes that the pandemic presents an opportunity to reduce reliance on international supply chains by supporting local industry.

The call follows a virtual roundtable event held by NOF with its Strategic Partners, a group of operators, developers, and main contractors from across the energy sectors.

NOF’s Strategic Partners suggest that the COVID-19 situation could have a positive impact on a drive for local content – skills, products and services provided by UK companies.

While several European countries have been demanding local content for some time, the UK has not moved as quickly.  In areas such as offshore wind, as a result of the Sector Deal, 60 percent local content on developments in UK waters is recommended, but the Strategic Partners believe that this could be enforced better by government.

To drive further innovation in the supply chain, NOF’s Strategic Partners say that the UK government needs to provide a further package of incentives around tax breaks and tax relief, which would support job creation and retention at a time when unemployment will be high.

The roundtable discussion also praised the efforts of innovative supply chain members, who’s technology-led solutions are driving efficiencies and cost-savings, which will be even more imperative in a post-COVID-19 economic environment.  The Strategic Partners also believe that as there may be supply chain shortages in the coming months, there will be opportunities for resilient companies to diversify into other sectors with transferable expertise.

George Rafferty, Chief Executive of NOF, said: “Like all areas of the economy, the energy sector will not remain unaffected by the global pandemic.  However, it is a cyclical industry with a long history of resilience and innovation, which it will no doubt apply again following the coronavirus emergency.

“This event does present the opportunity to actually strengthen UK manufacturing and engineering by building a more robust supply chain, which the government has the opportunity to support in the Chancellor’s economic statement and his next Budget.

These sectors are critical to the country and the government’s targets of a low-carbon future and the repatriation of supply chain activity to Britain will have a huge and positive impact on the sector and the economy in these challenging times.”