Consultants & Contractors Guide 2023: A Tricky Client called Planet Earth

Tracey Shelley says engineering contractors need stability to execute climate change solutions

CAST your mind back to a faraway place where the world appeared to reach a consensus on the need for unified action on climate change.

Barack Obama has flown in from Washington. David Cameron has crossed the English Channel, and Angela Merkel has just got in from Berlin. Oil prices are around US$50/bbl and falling. Interest rates are hovering just above zero, and discussions about inflation are confined to economic history articles. The CO2 level in Earth’s atmosphere is below 400 ppm on a good day. It’s a time before Covid, before Brexit, before Trump, and before the invasion of Ukraine.

This was the backdrop to the “historic” climate change conference at which world leaders agreed that human economic activity must change to restrict the global temperature rise to 1.5^oC. This faraway place was Paris in 2015.

Seven years on, it’s been impossible to look at serious news websites without being confronted with gloomy analyses of climate change policy failures. Inevitably, this happens when a policy is agreed without a practical plan to deliver that policy; but what do I know? I’m just an engineer.

What I do know is that successful engineering delivery depends heavily on the ability to understand the bigger picture. I also recognise that in highly unpredictable environments, like the one where we find ourselves today, it’s sometimes easier to knuckle down and carry on doing what you always did.

This is an increasingly risky strategy in any sphere of industrial activity, and at BCECA, we try to steer clear of falling into that trap. Engineering contractors understand the importance of sticking a head over the parapet now and then. It’s vital to garner the fullest possible explanation of what’s happening around you. Whilst a change of direction can be a pain, it’s generally a smart move, particularly when all the signals tell us that disaster is imminent.

For some people, decarbonisation is an inconvenient obligation; but I think the Paris conference called things right. So what went wrong?

For some people, decarbonisation is an inconvenient obligation; but I think the Paris conference called things right. So what went wrong?

A difficult client called planet Earth

Before attempting an analysis and advancing some solutions, it’s important to clarify the scope within which engineering contractors – large and small – must operate. BCECA members have been delivering world-scale energy infrastructure for over half a century, but we don’t decide what gets built. That decision ultimately lies with the client. We can offer advice and support based on our extensive knowledge and experience in project design and delivery worldwide. Still, the client ultimately decides what they want to build, the location and timeframe in which it should be built and how much they are willing to pay for it.

However, in this case, the client appears to be a thing called “Planet Earth” and whilst our politicians often claim to know what’s best for the planet, it’s a sobering fact that no one has yet come up with a form of contract that can quickly and effectively deliver a project solution to this client’s particularly tricky problem. The solution may be summed up in two words: “energy transformation”, but the challenge is a good deal more complex than that.

In October, BCECA brought a wide variety of stakeholders together for its second virtual annual conference to discuss the energy transformation challenge. We’ll be publishing a detailed report before year end, but in the interim, here’s a brief snapshot of the key themes that emerged from the conference.

Whilst our politicians often claim to know what’s best for the planet, it’s a sobering fact that no one has yet come up with a form of contract that can quickly and effectively deliver a project solution to this client’s particularly tricky problem

Policy

There is a pressing need to get the Energy Bill that has stalled in the UK Parliament out of the long grass and onto the statute books. We need a coherent legislative framework to make things happen. BCECA will be making representations to BEIS. We know that governments are wary of picking winners, but if it doesn’t double down on supporting the delivery of decarbonisation, the UK will be the loser. We downplay the risk of delay at our peril.

Finance

The future for hydrogen looks promising, but we need workable off-take agreements and certainty around capital allowances. All parties must get used to being a lot more uncomfortable. This means we must work more collaboratively to agree on mechanisms to share risk. BCECA will continue facilitating discussions with investors, financiers, and potential operators. Hydrogen may be in its infancy, but UK-based engineering contractors will help it come of age.

Workforce

Skills supply is a significant barrier to progress. BCECA member companies already recognise this, and interesting solutions are being explored. Nonetheless, we need much more flexibility in recruitment and working practices if we are to hire and retain the people needed to deliver decarbonisation. The opportunities for the next generation of engineers, technologists and scientists are terrific. BCECA will press ahead in its work with young professionals – especially women and those from BAME communities.

We need much more flexibility in recruitment and working practices if we are to hire and retain the people needed to deliver decarbonisation

These were our initial findings, but don’t take my word for it. Please find time to listen to the conversation and formulate your conclusions and ideas for the road ahead.

As I write this, we’re enjoying an unusually warm Autumn in the UK. Maybe that’s just “weather”, but the atmospheric CO2 level is 416 ppm and climbing. By the time you read this, world leaders will have met again in Egypt, and we may have heard more warm words on the need for unified action. That action will not happen without the engineering contracting communities’ professional design, procurement, and construction expertise in the UK and elsewhere. Without stability, progress will be further delayed.

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This feature is from our annual Consultants & Contractors Guide. Download the full guide and search for providers who can help you complete your project goals here