DECEMBER 02 2014
A MAGAZINE FROM DNV GL
MAPPING OUT A SUSTAINABLE FUTURE DNV GL PRESIDENT & CEO, HENRIK MADSEN
ALSO INSIDE: DNV GL CELEBRATES
VITAL TO STATOIL’S
A CLASS ABOVE
03 Editorial 04 News 08 DNV GL celebrates double milestone 10 Celebrating DNV GL’s proud history and bright future 14 Statoil: Standardisation is the new innovation 18 Elisabeth Tørstad on innovating toward a more sustainable oil and gas future 22 ALP Maritime Services: The future is (almost) here 26 All in for Seaspan 28 Brembo driving change 30 Linde Group: Supporting safety performance 32 Matchmaker for clean technology market in Asia 34 A new power resource comes to life under the desert sun 36 Global Opportunity Network: The opportunities have never been greater 40 Last word: A force for good by George Kell 42 Exploring a sustainable future: Six strategic projects
FORUM 02.2014 Published by DNV GL AS NO-1322 Høvik, Norway Tel: +47 6757 9900 Fax: +47 6757 9160
EDITOR Stuart D. Brewer Tel: +47 91522360 Stuart.D.Brewer@ dnvgl.com
DESIGN AND LAYOUT Coor Media coormedia.com email@example.com
PRINTING 07 Oslo AS: 15,000/12-2014 COVER PHOTO DNV GL/ Andreas Schmidt-Wiethoff
© DNV GL AS 2014
DEAR READER As we stand on the threshold of a new year, it is a good time for us to reflect on what has been a very special year for DNV GL. We have celebrated a double milestone: DNV’s 150th anniversary and DNV GL’s first year as a merged company.
Over the past 150 years, we have maintained a focus on our objective of “Safeguarding Life, Property and the Environment”, while at the same time adapting to changing societal and customer expectations, market developments, new regulatory requirements and many new and transformative technologies. Our ambition throughout 2014 has been to explore where we can leverage our history and expertise in order to translate our vision of having a “Global Impact for a Safe and Sustainable Future” into impact. As an example, by highlighting our six strategic and visionrelated projects at our anniversary events we are showing dignitaries, customers and industry leaders that we take the broader view. We sincerely hope that our work can inspire and promote new and radical forms of collaboration between authorities, civil society, academia and business.
customers and applaud their efforts in demonstrating leadership. So, as we celebrate our double anniversary, I would like to take this opportunity to thank you – our loyal customers, authorities, regulators and, not least, our employees. Without your support, we would not be where we are today. Your trust enables us to celebrate DNV GL’s proud history and bright future. Thank you for your continued interest in and support for DNV GL.
Indeed, collaboration and innovation are at the core of our vision. As we move forward, we will leverage the experience and expertise developed over the years to help our customers and other stakeholders address greater challenges in a world of rapidly changing demands, fast-evolving technology and intensifying competition. In line with this, DNV GL Forum marks the occasion of our anniversary with a new look. Through our corporate magazine, we will continue to highlight DNV GL’s services to the various industries we serve. In this issue, you can read about several of our customers and their innovative approaches towards more sustainable operations. We are proud to have such companies as
Henrik O. Madsen DNV GL Group President & CEO
US FLOATING FACILITY ROADMAP In the first comprehensive overview of its kind, DNV GL has mapped out what is needed to comply with US Coast Guard (USCG) requirements to operate floating oil and gas facilities in American waters. The roadmap document – ‘Verification for compliance with United States regulations on the outer continental shelf’ – eases uncertainty among operators over requirements and accepted rules and standards detailed by the Code of Federal Regulations on the operation of FOIs, FSOs and FPSOs. It is an example of how DNV GL acts as a bridge between industry and regulators. “Including all the relevant information in a single document creates a clear path for compliance,” said Paal Johansen, who leads DNV GL’s classification business in the Americas. “Many operators and owners have welcomed the roadmap. Owners have expressed a strong desire to freely choose a classification society for floating offshore installations in American waters. This document is further proof that they can do so and be confident in the entire regulatory process.” The US Floating Facilities Roadmap is available to download at: www.dnvgl.com
From left: Dr Henrik O. Madsen, Group President & CEO, DNV GL, Her Royal highness The Princess Royal and Koji Sekimizu, Secretary-General, International Maritime Organization (IMO).
From left: Derek Novak, Vice President Operations, Pacific Division , ABS, Steen Lund, Regional manager for DNV GL Maritime S.E.Asia & Pacific and Chris Hayman, Chairman, Seatrade.
SEATRADE AWARDS HONOUR DNV GL AND ITS CEO DNV GL Group President and Chief Executive Officer Henrik O. Madsen received the coveted Lifetime Achievement Award at the Seatrade Awards in London. Recognised for his “inspirational leadership”, the award was presented in the presence of HRH the Princess Royal as well as 400 industry leaders and professionals from around the world. At the 2014 Seatrade Asia Awards, DNV GL received the Environment Protection Award for its efforts to safeguard the environment and reduce the maritime industry’s carbon footprint. The award reflects the industry’s recognition of DNV GL’s environmental best practices.
DNV GL AND SINGAPORE COLLABORATE IN R&D DNV GL and the Maritime and Port Authority of Singapore (MPA) have signed a Memorandum of Understanding (MOU) to promote research and development (R&D) and innovation in the maritime industry.
The signing ceremony took place in the presence of Mr Lui Tuck Yew, Singapore’s Minister for Transport and Mr Borge Brende, Norway’s Minister of Foreign Affairs.
The MOU was signed between Dr Henrik Madsen, DNV GL’s Group President and Chief Executive Officer, and Mr Andrew Tan, MPA Chief Executive. The project will focus on LNG research and technology, green ports, eco-friendly shipping, and organizing maritime thought-leadership forums to promote green shipping.
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WINNER AT GLOBAL RISK AWARDS DNV GL has been awarded Risk Management Consultancy of the Year, winning the accolade at the Institute of Risk Management’s (IRM) prestigious Global Risk Awards. Judged by leading international risk management practitioners and academics, the awards are the pinnacle of achievement for risk professionals and organisations. DNV GL was highly commended for its diverse services across industries such as energy, oil and gas, petrochemicals, aviation and healthcare. Many of its current strategic research programmes received extremely positive recognition. Globally, these include: researching Arctic risks for oil and gas exploration and production; managing future energy supply; and research to promote patient safety. IRM chief executive Jeremy Harrison said: “The company has shown itself to be creative and innovative in the way it goes about delivering its business to customers.” Praised by the judges for the excellence of its approach across a range of industries, DNV GL was commended for showing creativity, innovation and a customerfocused approach to finding the right solution. The company also won praise from the EU parliament, clients and various other stakeholders. Hari Varmadevan, DNV GL’s regional manager for the UK and Southern Africa, said: “We are extremely grateful to be recognised by IRM for our contribution to the risk management industry over the past year, and are delighted to have been selected as the winner in our category. Through our strong relationships with customers and risk professionals, we have built a strong and sustainable business with a reputation for quality and integrity. Risk management is an increasingly apparent area within the industry and it is an honour to have won.”
BREAKTHROUGH PROJECT Oil and gas technology qualification methodology provides added value for power technology DNV GL is developing a technology qualification methodology for Norwegian transmission system operator Statnett, including a pilot case for a specific component that Statnett is considering using in its transmission grid. Technology qualification provides the evidence that a technology will function within specific limits with an acceptable level of confidence. This is a breakthrough project for DNV GL, as we are leveraging a mature service in the offshore oil and gas industry and applying it to the Scandinavian power sector. Statnett will benefit from the technology qualification expertise and methodology we have developed in our Oil & Gas business area combined with the extensive electro-technical expertise in the former KEMA. Reidulf Eldevik, Statnett’s project manager said: “With DNV GL -Energy Advisory’s support for the development of technology qualification methodology, we think we have a solid partner in establishing a structured, transparent and proven process for developing a portfolio of new, qualified and cost-effective technologies.”
DNV GL ACQUIRES MARINE CYBERNETICS
Left, Stein Eggan, CEO of Marine Cybernetics and Remi Eriksen, DNV GL Group Executive Vice President and COO.
DNV GL has acquired Marine Cybernetics, the leading company for third-party testing of computer control systems. The acquisition expands DNV GL’s scope of services in the offshore and maritime industries. Marine Cybernetics was established in 2002 as a spin-off from the Norwegian University of Science and Technology (NTNU). Based in Trondheim, Norway, the company introduced the concept of hardware-in-the-loop testing (HIL) to the maritime and offshore industries. HIL testing significantly reduces the risk of accidents, off-hire costs and non-productive time due to software-related issues.
© Maersk Line
ShipManager, DNV GL’s popular software suite, was chosen by Maersk Line following a rigorous selection process.
MAERSK LINE SWITCHES TO DNV GL´S SHIPMANAGER Maersk Line has begun implementing DNV GL’s ShipManager software with pilot tests on five vessels. Installation of ShipManager on their self-owned fleet of 250 vessels is scheduled for next year. Maersk chose DNV GL’s ShipManager following a thorough review of available options including 26 other ship management solutions. By switching to the leading off-the-shelf ship management system, the world’s largest container shipping company will benefit from increased process efficiency and improved information accessibility and analysis.
“The feedback we have received so far from Ebba Maersk, a 15,500 TEU containership, has been very positive. The application is performing well, and the users have praised the application for its user-friendliness and the self-explanatory nature of the modules,” says Sebastiaan Van den Wijngaert, Senior Project Manager at Maersk Line IT.
Headquartered in Copenhagen, Maersk Line has 33,000 employees worldwide and makes 35,000 port calls annually. “ShipManager will replace nine applications we have had in use, giving us one integrated, easy-to-learn, user-friendly and technically up-to-date application,” says Van den Wijngaert. “It will make onboarding of new people a lot easier.”
MANIFESTO FOR OFFSHORE WIND COST REDUCTION Reducing offshore wind costs is widely seen as essential in order to secure the future of the sector as an important energy source in Northern Europe, North America and Asia. The DNV GL manifesto for offshore wind cost reduction identifies and quantifies cost-reduction opportunities while also setting out the challenge and committing our company to action on this important issue. The manifesto contains 14 specific pledges, with strategies categorized into three basic types: ‘Doing it right’ by risk mitigation and increasing certainty, ‘Doing it better’ by improving efficiency and ‘Doing it differently’ by innovating. By working with industry partners, DNV GL is confident it can help to reduce offshore wind costs by up to 25 per cent. This saving, combined with trends in other areas, such as improving supply chain efficiency, could deliver a total reduction of 40 per cent, the level identified by many experts as being necessary to secure the future of the industry. The full document, ‘Offshore Wind: A Manifesto for Cost Reduction’, is available on our website.
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DNV GL AND N-KOM COLLABORATE ON GAS PROJECTS To promote liquefied natural gas (LNG) as fuel within the maritime and offshore industries, a memorandum of understanding (MOU) has been signed between DNV GL and Qatar’s premier shipyard Nakilat-Keppel Offshore & Marine (N-KOM). The memorandum was signed by N-KOM’s CEO Chandru Rajwani and DNV GL’s Group President and CEO Dr Henrik Madsen during DNV GL’s recent anniversary celebrations in Dubai The MOU will further strengthen the position of N-KOM, which is a joint venture between Qatar Gas Transport Company (Nakilat) and Keppel Offshore & Marine, in the areas of LNG-fuelled vessel conversions and the construction of related floating assets. N-KOM will capitalize on DNV GL’s deep expertise and long-standing experience in LNG, working with shipyards, ship owners and other key stakeholders on a global basis to develop synergies related to the promotion of LNG as fuel within the maritime and offshore industries. Mr Rajwani said, “N-KOM has already established itself as a leading destination for gas carrier repairs in the region. With the signing of this MOU, we take a significant step further in becoming the preferred gas solutions provider on a global scale. Through a mutual sharing of knowledge on the latest technology, environmental, safety and quality issues with DNV GL, we will be able to offer our customers an even wider range of solutions and facilities for liquefied natural gas as marine fuel and other gas solutions.”
DNV GL and N-KOM management representatives, seen here at the signing ceremony.
ACCREDITED TO CERTIFY RESPONSIBLY FARMED SALMON DNV GL is accredited to certify salmon farms according to the Aquaculture Stewardship Council (ASC) Salmon Standard. “The ASC accreditation is an important step towards meeting the seafood industry’s needs throughout the value chain. We expect the demand for eco-labelled seafood to increase in the coming years,” says Stefano Crea, Industries Director in DNV GL - Business Assurance.
ASC is an independent not-for-profit organization founded in 2010 by the World Wildlife Fund and Dutch Sustainable Trade Initiative to manage the global standards for responsible aquaculture. To be certified to the ASC standard, farmers must comply with a set of requirements covering the planning, development and operation of their salmon aquaculture production systems. The standard is based
on best practices and targets the production process and its immediate inputs. Continuous improvement is in focus and the standard will be periodically updated to reflect the latest scientific knowledge, management practices and technologies. The certification process is open to stakeholder engagement.
DNV GL TEXT STUART BREWER PHOTO JULIAN BRAY
CELEBRATING A DOUBLE MILESTONE To mark the 150th anniversary of the foundation of Det Norske Veritas (DNV) and the first anniversary of its merger with Germanischer Lloyd (GL), DNV GL has throughout this year hosted worldwide events to celebrate the double milestone in the presence of dignitaries, government officials and customers.
Many of Norway’s business and political elite gathered for the celebration at the Oslo Opera House followed by an evening dinner at DNV GL’s headquarters in Høvik. In his welcome address President and CEO Henrik O. Madsen said: ‘This is a time to reflect and thank our partners and friends all over the world, who have been on the long journey together with us. Without their support we would not be where we are today.
world places an obligation on nation states, organisations, businesses and citizens to act for a better future,” said Madsen.
“As we celebrate, we are focusing not just on our past but on the future as well. There are many things we can do to find a sustainable pathway. This requires innovation and collaboration. Indeed, constant change in the global economy and an increasingly interconnected
Chairman of the Board Leif-Arne Langøy said: “Trust is our business rational. As society pushes for a safe and sustainable future, there is a need for institutions like DNV GL that develop recognized standards and build trust.”
Guests in conversation with the Norwegian prime minister.
Chairman of the Board Leif-Arne Langøy.
His comments were supported by Norwegian prime minister Erna Solberg, who praised DNV GL’s “proud history of safety and sustainability” thanking DNV GL for its “important contribution to Norwegian society” .
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Norwegian prime minister Erna Solberg (far left) seen here with DNV GL chief executive Henrik Madsen (far right) on the way to the event. Also pictured, the prime ministerâ€™s husband, Sindre Finne (centre).
Norwayâ€™s Crown Prince Haakon (centre) attends the performance at the Oslo Opera House.
Guests mingle inside the state-of-the-art venue.
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CELEBRATING DNV GL’S PROUD HISTORY AND BRIGHT FUTURE More than 8,000 distinguished guests have gathered at worldwide events throughout the year to celebrate DNV GL’s double anniversary. At the celebrations, President and CEO Henrik O. Madsen reflected on what has been a very special year for DNV GL. “We have celebrated a double milestone: DNV’s 150 anniversary and DNV GL’s first year as a merged company. It has been a pleasure and privilege to participate at our anniversary events and I want to sincerely thank our customers, authorities, regulators and, not least, our employees. Without your support, we would not be where we are today. Your trust enables us to celebrate DNV GL’s proud history and bright future.”
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DNV GL TEXT CATHRINE TORP PHOTO © STATOIL/HARALD PETTERSEN/ØYVIND HAGEN ILLUSTRATION © STATOIL/ANNE-SOLFRID WALLØE
STANDARDISATION IS THE NEW INNOVATION Through innovation and collaboration, Statoil aims to develop the elements for a subsea factory by 2020. In a wide-ranging interview, Margareth Øvrum, executive vice president, explains how standardisation and fast tracking are vital to the process.
With responsibility for developing efficient projects, and research and innovation, Margareth Øvrum, EVP for technology, projects and drilling at Statoil, has a clear view of the future for the international energy company’s approach to subsea. While new technology is important, the company is also set on widening the use of technology and achieving standardisation faster. Øvrum said: “There is no contradiction between developing new technology on the one hand, and standardising technologies on the other. Multi-lateral wells on Troll (a gas field offshore Norway) are among our more complex wells, but they are the most efficient because we repeat the same process over and over. We work hard at standardisation and we can see that the company is getting better and better at delivering on standardisation.” Half of Statoil’s current production comes from more than 500 subsea wells and the company has an ambitious target: to deploy the oil and gas industry’s first complete subsea factory – a fully functioning process plant on the seafloor – by the end of the decade. There are a number of drivers of Statoil’s subsea commitment, Øvrum explained.
“Cost is one of them. For example, we would not have been able to develop the Tyrihans field economically through a platform solution.” Tyrihans is an entirely subsea solution, tied back to installations and infrastructure in the Kristin and Åsgard fields. Another key driver is to exploit the full potential of field reservoirs quickly. The fast-tracking of Statoil’s subsea technologies has reduced time from discovery to production from about five to two years, which significantly reduces costs, Øvrum said. Subsea also contributes to the life extension of offshore platforms because it allows for tie-ins. In addition, subsea has improved energy efficiency and enabled field developments that could not otherwise have been achieved. “When fields are in deeper and colder waters, with more complex reservoirs in more remote areas, subsea is often the only solution,” Øvrum said. Snøhvit in the Barents Sea is one example of how subsea can solve issues that surface installations cannot. Statoil needed an installation invisible from shore and that allowed fishing boats to trawl unhindered.
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“We have developed 520 subsea wells and have not really experienced any problems” Margareth Øvrum, EVP, Statoil
“There are health, safety and environmental benefits too,” she added. “People-free operations lead to no health risks. A small gas leakage is a lot less dangerous on the seabed than on the topside where you can get an explosive mix. When I was a platform manager (on Gullfaks) the thing in the front of my mind was to avoid gas leaks! Subsea is also positive for climate change as energy efficiency increases. “Subsea installations reduce maintenance and risk, and weather is not an issue either. As long as you have stringent inspection and asset integrity programmes in place – in addition to constantly monitoring critical parameters such as corrosion – you are unlikely to see any issues. We have developed 520 subsea wells and have not really experienced any problems.” Journey to 2020 Øvrum explains that Statoil will need to take a phased approach to creating a fully-functional subsea factory by the end of the decade. “You cannot achieve the ultimate solution in one step. We knew that to achieve subsea compression we needed to develop a number of different elements and we did so over a 10- to 15-year period,” she said. Statoil’s first subsea installations were in 1986 at Gullfaks. It now has subsea compressors on Gullfaks and Åsgard. “I often describe the latter as a paradigm shift,” Øvrum said. Even with long-term experience in developing subsea solutions, Statoil’s goal to create a complete subsea factory by 2020 is nevertheless ambitious. Less complex is the brownfield factory where a compressor is tied to an existing platform. “Then you can go a bit further afield, where you gather subsea templates into a hub that is also on the seabed, rather than on the topside of a platform,” Øvrum explained. “If you go even further offshore, then you need technology to transport oil and gas over much longer distances than we operate today. Electrical power is also an issue. Longer distances require high voltage electrical supply, and to operate a subsea factory, you must separate out more water from oil and gas than today, and you need seafloor storage. “All of this is achievable, but you need to prove the technology. We cannot test out a number of new com-
ponents in one go, so we need to take a stepwise approach. We also need our partners at the different fields to be willing to test out new technologies. I would not call this a hurdle, but it is important to obtain. “We have a very structured roadmap for what elements we need to develop stepwise today to be able to achieve different types of subsea factories in 2020 and beyond. Subsea factories are taking the technology further and further for each field development. Ultimately, we will be able to develop fields under ice; but an Arctic subsea factory will take much longer than 2020 to achieve.” Cooperating for success The history of innovation has many examples of trailblazers that took the risks and cost of being first movers or adopters, but Statoil sees the advantages. Øvrum said: “The number one advantage is that it gives broader and deeper competence. You gain much more being part of the development of new technology and implementing the first tests, rather than just deploying proven technology five years down the road. “It is not by accident that Statoil has many wells and much equipment on the seafloor. It allows us to develop competence faster than the competition, and to use the technology more broadly, for applications other than those originally intended.” Statoil involves its suppliers in the development of new technology and solutions, as does DNV GL through joint industry projects (see page 29). “It is a big advantage to work together with the supplier industry as it helps us bring innovation faster to the market. We have complementary skills and the relationship is symbiotic. We would not succeed without our suppliers’ contribution to our innovation activities, and they would not succeed without our willingness to put new solutions to the test,” Øvrum explained. Extensive dealings with academia and a strong relationship with the Norwegian government have also helped, she said. “The Norwegian authorities have been a driver for more environmentally friendly solutions – there is a fantastic demo laboratory on the Norwegian Continental Shelf (NCS). The globally competitive subsea supply industry that Norway has today stems from the fact that we have been allowed to test out new solutions. The
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Concept for a future subsea compression station in Ormen Lange gas field
Åsgard subsea compression template
Statoil’s Tyrihans oil and gas ield is an entirely subsea solution tied back to installations and infrastructure in its Kristin and Åsgard ields
authorities have been both supportive and demanding, which has driven the industry forward.”
Statoil itself has comprehensive technical requirements. The supply chain has things to improve on, as do we. And there is certainly potential to improve how we manage the interfaces between all parties as well.
The threat of rising costs Research published by DNV GL1 this year has forecast a period of capital expenditure belt-tightening, as industry operating costs continue to rise. Standardisation and industrialisation are important elements in tackling chronic rising costs, according to Øvrum. “We tend to make things complex,” she said. “There are more regulations than ever before and we ask for more documentation, which drives up engineering hours.
“We are working in more remote areas and in deeper waters than before. An increase in cost is to be expected, but we have to turn this trend around. If we don’t, the subsea industry will be priced out of the game.” 1: Challenging Climates: The outlook for the oil and gas industry in 2014, DNV GL
DNV GL TEXT CATHRINE TORP PHOTO DNV GL/ DAMIR CVETOJEVIC
INNOVATING TOWARD A MORE SUSTAINABLE OIL AND GAS FUTURE How to ensure reliable, clean and affordable energy with a minimum environmental impact is a key challenge for all stakeholders in the energy space, none more so than the oil and gas industry.
In an interview with Forum, Elisabeth H. Tørstad, CEO of DNV GL – Oil & Gas, says “We need to address the tensions involved in providing society with affordable energy at high levels of efficiency and safety and with minimum negative environmental impact. In addition, we simply need more energy: estimates from IEA suggests that the world will need 37% more energy in 2040 than today. But how do we combine this growth in demand with social needs and our climate goals?” “Turning off the oil and gas production taps tomorrow is not an option,” says Tørstad. “We don’t have alternative sources to deliver at the scale required. Then again, I think it is also unacceptable and irresponsible to deny that the world supply of oil and gas is finite. If we in the industry want to secure the long-term future, we must
use our remaining resources effectively without waste, while preparing for a very different future.” Tørstad continues, “Effectively, we’re talking about a journey towards sustainability, and this is a word that aligns closely with DNV GL’s purpose of safeguarding life, property and the environment. With our long experience of pursuing this purpose combined with our technical expertise, we believe we have useful insights on the steps needed for this journey. “In this connection, we would like to introduce ‘Safe and sustainable energy future’ as a vision that aims to inspire and challenge all of us in the oil and gas industry as well as other stakeholders in the energy sector. In this vision lies a picture of sustainable business and
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Elisabeth H. Tørstad, CEO of DNV GL – Oil & Gas.
sustainable societies with safe working places and a minimum impact on our seas, oceans, air, soil and groundwater,” explains Tørstad.
contracts where everyone works towards the same goals have a potential to significantly increase efficiency and save time, money and energy.”
Enablers for a safe and sustainable energy future The oil and gas industry is facing rising complexity that is driving up costs. Spending per produced barrel continues to rise. Tørstad believes that this ‘new reality’ is here to stay and emphasises that the industry needs a new approach to deal with these challenges. She believes the key enablers will be collaboration, policy, regulations and technology.
Citing DNV GL’s work on Joint Industry Projects (JIPs), Tørstad says “We see time and again the positive effects of strong collaboration within the industry and across sectors. When key stakeholders come together to search for solutions and establish common ways of working, everyone benefits.
“There’s an opportunity for increased efficiency if the industry moves from protectionism to committed collaboration,” says Tørstad and adds, “Collaborative
“Further, collaboration should also include standardisation, which supports simplification, builds trust, reduces complexity, drives cost efficiencies by leading to smarter working and creates predictability throughout the supply chain,” she adds.
Commenting on policy and regulations, Tørstad stresses the need for the “urgent alignment of today’s fragmented industry regimes and policies to drive the replacement of coal with gas and enable stronger growth in the introduction of renewables. “We also challenge the authorities to develop an efficient, globally aligned emission regime that encourages oil and gas companies to invest in innovative R&D to increase energy efficiency with minimal emissions.” Tørstad believes this will be economically viable if the ‘true cost’ of oil and gas activities is incorporated in pricing and decision making. Such a ‘footprint’ economics approach will ensure that the higher environmental and societal burden of extracting and using oil and gas is accounted for. On technology and shared innovation, Tørstad’s view is that “The oil and gas industry has always been brave about technology development, but too often the focus has been on new and additional systems rather than simplifications and replacements. We must dare to think in new ways about work processes and effective conditions for collaboration, as well as systems and concepts. Best practices in areas such as safety and energy efficiency should be developed and widely shared. An ‘industry campus’ approach could be developed to lift the performance of the industry as a whole, encouraging wide collaboration and creating high-quality sustainability standards.” Tørstad also believes that such an approach to innovation will enable the oil and gas industry to be more cost competitive in the long run and attract and utilise talent in a more effective manner. Steps are being taken The industry is already taking a number of steps in the right direction to cut waste, pursue efficiencies and apply competence and learning in new ways.
Flaring is a good example of waste in the energy value chain. In Europe and central Asia alone, flaring accounts for over 60 billion m3 annually, releasing the equivalent of 120 million tonnes of CO2 into the atmosphere. There are clearly very large economic and environmental opportunities involved in ending flaring and venting, and the industry is on the right track. Since 2007, ExxonMobil in Nigeria has reduced flaring by 74% through significant investment. DNV GL is currently running an extraordinary innovation project with the aim of finding technical solutions to capture, convert and transport the associated gas being flared today. It will continue to invest in various R&D and innovation projects to increase efficiency and reduce the ‘waste of energy’ and negative environmental impact throughout the oil and gas value chains. “It’s about technology,” says Tørstad, “but also about applying technology in a way that is economically viable. And it’s about using our finite hydrocarbon resources effectively. For example, in the future we may not have to use fossil fuels to power offshore processing plants.” Wind-powered enhanced oil recovery is one example of the sort of efficiency gains the industry can make. DNV GL studies suggest that combining the newest developments within offshore wind power and a new generation of autonomous injection systems used to increase reservoir pressure may be a highly beneficial partnership. These systems could be installed without costly retrofittings on the platform and provide access to systems normally located subsea while increasing the flexibility of injection location and reducing installation time. They could also be moved for use at new locations after the closure of a well or field. “Floating offshore wind energy is still in its infancy and, although examples such as Statoil’s Hywind technology and the Talisman Beatrice Project in Scotland are fasci-
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Wind-powered enhanced oil recovery is one example of the sort of efficiency gains the industry can make.
nating, we still have some way to go to make floating offshore wind competitive,” Tørstad points out, adding “Over a decade or two, we believe it will be economically viable to use alternative sources of energy in oil and gas processing plants – especially if we’re willing to learn from other industries.” She cites the example of the maritime industry learning from the automotive industry in adopting Hybrid Power Systems technology five years ago for both ‘green’ and performance-related reasons, with fuel savings as high as 40% in ships (against the typical 20% fuel savings in hybrid cars). Such examples clearly highlight the potential for positive change.
Align all stakeholders “Collaboration and openness will allow the oil and gas industry to develop the technology it needs while sustaining the ability to attract the best human talent and at the same time gaining the trust of the public for its activities. We must not let the zero-sum game of competition win over the transformative goals of collaboration. “This all necessitates much bolder global leadership: policies and regulations need to be aligned globally to create a framework for both consumers and industries to make the right decisions today that support a safe and sustainable energy future,” concludes Tørstad.
DNV GL TEXT ALEXANDER WARDWELL PHOTO ALP MARITIME SERVICES
ALP MARITIME SERVICES:
THE FUTURE IS (ALMOST) HERE Founded in 2009 as a consultancy in ocean towage, heavy transport and non-conventional marine contracting, ALP Maritime Services has recently ordered four high-spec oceangoing tugs designed to meet the evolving demands of this highly specialized shipping segment.
The vessels, developed by Ulstein Design & Solutions in close cooperation with ALP Maritime Services (ALP), are SX157 design with a 300-ton bollard pull, capable of operating at full loads for 45 days without refuelling. ALP, which was recently acquired by Teekay Offshore, has contracted Niigata Shipbuilding & Repair yard to build four vessels. The first vessel is scheduled for delivery in the first quarter of 2016.
new offshore floating production units has created a demand for increasingly large and powerful vessels to perform mooring leg survey, maintenance, repositioning, refurbishment and/or decommissioning services in increasingly remote locations,” he says. “Our goal is to provide the market with highly reliable, flexible and safe vessels that will minimise risk to crew and avoid damage to offshore installations.”
Paul Mulder, CEO for ALP, says that the 4,250 dwt ocean going tugs have been designed to manage a growing number of ultra-large floating production units now on order. “The growing size of these
Minimising risk Mulder says that unlike many existing ocean-going tugs, the “ALP Future Class” vessels are equipped with DP II and redundant systems to avoid the risk of colli-
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The ALP Future class is designed for the long distance towage of the world’s largest floating objects.
sions, engine failure or blackouts – a genuine risk when towing large units in rough seas. “We started from a scratch to develop a design that would meet – and exceed – the expectations of energy majors,” he says. “In many ways, the vessels reflect our ‘customer first’ business philosophy.” ALP Maritime Services takes it name from the first names its three founding partners: CFO Arjen de Geus, COO Leo Leusink and Paul Mulder, CEO. The three met while working for Fairmount Marine, a world-class contractor for ocean towage, salvage and heavy lift transportation based in the Netherlands. “We valued
our time with Fairmount, but in 2009, we recognized an opportunity to offer support to clients seeking the best solution to manage transportation and towage.” Starting out Over the next two years, ALP Maritime Services worked with a number of clients, including Harms Bergung Transport and Heavylift, Fukada Salvage & Marine Works, and ZPMC Shanghai Zhen Hua Shipping providing operational, consultancy and commercial services. “We valued these contracts, but soon realized that unless we had access to our own tonnage, our business would be limited,” says Mulder. “Over the
For CFO Arjen de Geus, COO Leo Leusink and CEO Paul Mulder, founders of ALP Maritime Services, the new vessels will be a big step towards fulfilling a long-held dream.
years, we had all dreamed of owning our own fleet of high spec tugs, and the time seemed right to make our move.” After consulting with a number of designers, ALP selected Ulstein Design and Solutions and the detailed engineering began. Mulder explains that the vessel design for the “ALP Future Class” tugs meets both existing and future market demand, with a focus on customer needs and emerging emissions regulations. “These vessels have been designed to minimize a number of concerns identified by energy majors transporting large structures over long distances,” he says. “For example, the vessels feature redundant cooling and propulsion systems and all vessels will be equipped with DP II and anchor-handling capabilities, eliminating the need for anchor handling tugs usually required for mooring and installation work.” Mulder adds that with 300 tonne bollard pull, towing some structures may require fewer tugs, reducing complexity, transportation costs and collision risk. “We have also taken steps to ensure the ocean tugs are complaint with emerging Tier III emissions regulations, scheduled to go into effect in 2016.” Financing a dream With robust design and a solid business plan, the ALP team set out to raise capital for the newbuilding project, meeting with a number of banks and investors in Europe and North America. During this process, ALP Maritime Services met with Teekay Offshore, who showed an interest in the project – enough to acquire ALP Maritime Services in early 2014. In a statement released by the company, Chief Executive Officer of Teekay Offshore, Peter Evensen noted: “We believe ALP’s operational capabilities and customer relationships in the growing long-haul ocean towage and offshore unit installation segment is a natural complement to Teekay Offshore’s existing offshore project offering.” With financing secure, ALP, working closely with Ulstein Design and Solutions, worked with a number of suppliers to finalise the design, including Pon Power (propul-
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ALP Maritime Services “Future Class” vessels are classed by DNV GL with the following notations: DNV 1A1,ICE-1B, Offshore Service Vessel+, Anchor Handling, Towing, Fire Fighter II, SF, COMF-V(3), E0 DYNPOS-AUTR, NAUT-OSV(A), CLEAN DESIGN, Recyclable, BWM-T, BIS, TMON.
sion), Kongsberg (Dynamic Positioning) and DNV GL, among others. According to Bas Veerman, DNV GL Customer Service Manager (BeNeLux) , the “ALP Future Class” vessels have a number of specialised notations. “It was clear from the beginning of the project that ALP was committed to developing a very unique, high-spec design,” he says. “In terms of operational performance and flexibility, these vessels are ‘best in class’ but also include features to reduce emissions, enhance safety and robustness, and ensure crew comfort over long distances.” People, not steel Indeed, Mulder says that while the company has committed significant resources I the vessel and on-board equipment and systems, the successful operations has more to do with people than steel. “Long haul towage
is a highly specialised segment, requiring experienced, highly skilled crews,” he says. “Our focus now is to attract, train and develop officers and crew, and we feel the quality and comfort of these vessels will serve as a powerful recruiting tool.” Mulder acknowledges that the company still has a long way to go, but with a four-vessel newbuilding programme now underway, ALP Maritime Services has a bright future. “The rapid pace of our development has been exciting, but in many ways, myself, Leo and Arjen have spent a lifetime to get to this point. Now, our task is to execute our business plan.”
DNV GL TEXT KRISTIAN LINDØE PHOTO SEASPAN
ALL IN In March, the first of Seaspan’s 21 SAVER vessels, the Hanjin Buddha, was delivered from Yangzijiang Shipyard in China. The 21 container ships (10,000 TEU) with a 2+2 option were ordered in 2011, at a time of very depressed rates in the container market. Here, Seaspan’s COO Peter Curtis talks about how Seaspan found the courage and confidence to go all in – and win the prize in the form of significantly improved fuel efficiency.
Seen from the outside, it certainly seemed like a risky move: a new design, a long series to be built by two teams at two sites - one of them a greenfield yard. The series of 21 ships is still the biggest ever newbuilding order in China. “Reputations were at stake for all of us,” says Peter Curtis. “But my compliments to the yard and to DNV GL for managing the many challenges involved in a project like this. We obviously had to have a broad and deep approach to risk management, and DNV GL was at the centre of this,” he comments.
TEU per metric ton of fuel over a certain time, was in double digits, which we had asked for, but it was twice what we had asked for. At first we couldn’t believe it, we thought it was too optimistic, but through careful review with separate sources we concluded that the results were correct,” states Curtis.
The reward for the risks seemed to grow as the project matured: “The savings on these ships, per TEU, are so significant that we cannot afford not to do this. And I think our competitors are about to see the same,” says Curtis.
Myth busting This critical approach to validating all data, assumptions and ideas also busted some widely held beliefs. The myth is that you should get rid of ballast at all times, that it is inherently bad for fuel consumption. “We’ve tested and validated data on this now through draft trim optimisation and can now bust that myth: for example, we optimised the ballast for the speed and loaded draft for the first voyage, which in fact called for an increased draft through adding ballast and saved several tons of fuel per day. So, ballast is not always bad.
Good to know There has been much discussion about the realism in cost-saving estimates. Seaspan wanted ambitious goals but strict validation methods as the project progressed. “We had asked for increased loadability and decreased fuel consumption per deadweight ton. The validation showed us results that were far in excess of what we had challenged the designer and yard to achieve. The combined result, the number of loaded
“Then there is the disproportionate effect of small changes in speed. We looked at typical ‘dash and loiter’ scenarios with relatively small differences between fast and slow. What you spend when you hurry is never offset by the gain when you slow down. This means several tons of fuel - or some thousands of dollars – wasted each day, which is close to 5–15% of the charter rate, to no gain. You just increase the cost to the customer – and that’s not at all a competitive advantage,” says Curtis.
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“I remember when DNV developed the Quantum concept. We were very keen on it. Of course, it had its funky and futuristic aspects, but it also had gold nuggets. The biggest gold nugget was this: design your ship around its actual operational profile. Not around maximum speed and deadweight.”
Peter Curtis, COO of Seaspan.
still needed, despite all the doom and gloom about that size of vessels. They serve a certain purpose too,” says Curtis. “We’ve decided to take the innovation and technology route. In addition to the 21 vessels based on the SAVER concept, we also have on order 15 other SAVER ships above 10,000 TEU. For Seaspan, this made sense economically, particularly with our method of financing newbuildings. We have almost never done speculative tonnage, it’s always against a back-to-back long-term time charter. Those are the fundamentals of our model. Additionally, our charterers have been blue chips that have performed consistently well, even through the financial crisis. “Now we’re measuring time, speed, distances and fuel consumption for our entire fleet so that we can see the big picture and make the necessary adjustments together with our ships’ crews,” he says. Tough act to follow? Why is everyone not copying the Seaspan model, as recently suggested in Lloyds’ List? “There simply is not enough capital around for everyone to have these big ships. We believe this is what many liner majors will move towards, in time, but for now the cost of access to capital eats into the efficiency gains. So there will be ships of all types around. But our Panamax vessels are
“And we try to keep things simple: we’d rather spend some time getting the recipe right and then build a series of ships. If you look at our NB programme, you will see we have a huge capital expenditure over what is basically only three series of ships. We have taken a very conservative view, to transfer what we like and trust from prior designs onto new designs and change what we don’t like, including in equipment and methods of operation.”
DNV GL TEXT JOACIM VESTVIK-LUNDE PHOTO BREMBO
DRIVING CHANGE For more than 50 years, innovation has been at the heart of Brembo in order to improve automobile performance and safety. This has resulted in one of the strongest positions in the automotive industry and the company is continuously looking for new ways to improve.
Brembo’s business is based on one of the central laws of physics; that energy cannot be destroyed, only change its form. The formula for kinetic energy, E= ½ mv2, describes the underlying principle for how the mass of brake discs dissipates the kinetic energy of a moving vehicle, transforming the energy into heat through friction. From its outset in 1961, Brembo has mastered this principle better than most, enabling the company to grow from a small family business in Bergamo, Italy, into a global corporation spanning three continents and with production facilities in 16 countries. Brembo now supplies leading automotive brands like Corvette, Yamaha, Ducati, Harley Davidson and BMW. The company has been a Formula 1 racing supplier since 1975, installing state-of-the-art braking systems in Ferrari cars and thus enabling a 700kg car to go from 300 km/h to a complete halt in just 4 seconds. That is a physical feat that can heat up the braking systems to more than 1,000 degrees Celsius. Barrier to competitors “Making technologically advanced components is difficult, but once they have been made well, they create an incredible barrier to competitors,” stated Brembo chairman Alberto Bombassei during a speech at the University of Bergamo. This clearly summarises the company’s philosophy that has been applied throughout Brembo’s history - a continuous search for improvements and quality enhancements, while at the
same time caring for its staff and the environment. “We define quality in the broadest sense. To us, it means that our customers are completely satisfied with the safety, reliability and performance of our products, and with our technical, sales and logistics support. Our quality target is to have ‘zero risk’ with our products, processes and materials,” says Giancarlo Signori, Brembo’s occupational and environmental safety manager. Brembo’s management system is certified to the Quality Management standards ISO 9001 and ISO/TS 16949. It is also certified to the Environmental Management standard ISO 14001 and the Occupational Health and Safety standard OHSAS 18001. Advancing sustainability through innovation Each year, Brembo invests 5% of its turnover in research and development. An impressive figure compared to the Italian average of less than 1% per company. Of a total staff of 7,200, more than 600 work as researchers and developers. Their efforts have led to a steady stream of patented inventions, such as the floating disc derived from racing applications and now mounted on the Volkswagen Phaeton, the radial pump patented in 1985 that is still installed on all racing motorcycles, the Star Pillar which has a unique configuration designed to counter thermal cracking and the new carbon-ceramic brakes that endure extreme temperatures and withstand corrosion.
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Brembo supplies leading automative brands, including state-of-the-art braking systems in Ferrari cars. However, innovation at Brembo is not just about new products. It permeates the entire organisation to the point that even the corporate and commercial offices are constantly encouraged to come up with new solutions to improve business processes and reduce environmental impact. “Reducing the environmental impact of our products and processes is fundamental to us. We have a strong focus on environmental sustainability and work to find solutions that reduce the fuel consumption of vehicles and the related emissions of CO2 and fine particles. In addition to our own research, we work closely with international universities, research centres and partners in order to reduce the impact of brake systems on the environment,” says Mr Signori. DNV GL’s auditing methodology Next Generation Risk Based Certification™ has, through the auditing process, helped Brembo to identify areas of improvement. “A traditional audit has a pre-set checklist against which a company is measured and any non-compliance issues are identified. DNV GL’s audit takes a broader approach. Since we wanted to step up our focus on environmental sustainability, the audit looked at each unit and department to evaluate measures already being applied and provided a clear status of our environmental management and areas with untapped potential,” Mr Signori explains.
“The audit identified opportunities for us to excel further in the planning phase, so that we could tune our processes and even better meet our customers’ requests for lighter callipers and discs, resulting in cars that weigh less and consume less fuel. “This is truly a change of perspective, not an audit of the status quo. It is an audit of what the company needs and how it intends to achieve it,” ends Mr Signori.
THE POWER OF NEXT – A SUSTAINABLE MANAGEMENT SYSTEM In DNV GL, we believe that tomorrow’s successful organisations are those that create value by meeting the world’s economic, social and environmental needs. That is why we offer our Next Generation Risk Based CertificationTM methodology, in order to better support sustainable business performance through the management system certification process. The methodology helps improve a company’s management system by taking a broader view of the driving factors for the company’s business success. Together with our customer, we identify the most critical risks and consider the most relevant stakeholders that impact long-term business objectives. Thus, our certification process allows companies to demonstrate compliance with the chosen standard while building sustainable business performance over time.
DNV GL TEXT KAIA MEANS PHOTO THE LINDE GROUP
SUPPORTING SAFETY PERFORMANCE The Linde Group is the largest gases and engineering company in the world. After the group’s acquisition of BOC in 2006, the management team chose the flexibility and configurability of Synergi Life for the entire organization.
Software for incident and risk management When the British-based BOC was taken over by The Linde Group in 2006, one of the first issues at hand in the field of safety, health, environment, quality (SHEQ) was to choose software for incident management. Mike Furmston, Head of Global Enabling Functions – LSA at The Linde Group, says that in the research being done on various solutions, it quickly became evident that the software that was already in use by one Linde Group division in Northern Europe, was the flexible solution they were looking for. Soon the management team decided to implement the software, Synergi Life, in the entire global organization – which is currently at 63,500 employees in more than 100 countries. They are using the Incident Management module and the Activity Management module. The Linde Group is is a gases and engineering company with operations on five continents. The company supplies gases such as oxygen, nitrogen, argon, hydrogen, helium and other speciality gases, and the delivery is either through pipelines, on tankers or in cylinders. Other divisions design, manufacture
and construct industrial plants. In addition, The Linde Group has a presence in both the healthcare area and logistics services. Risk management data mapping Furmston is responsible for delivering Synergi Life globally. “We decided to start small and grow bigger,” he says of the implementation process. “You start recording incidents and adding data. Then you do evaluations and map the data. You make some changes. Now people are finding ways to use Synergi in different ways. Different parts of the organization are looking at managing incidents in a different way. Incident management has developed from being just safety incidents to general incidents. We’re looking at incidents at customer sites, we’re looking at incidents in the healthcare environment. All of that requires special attention. But it’s grown out of the basic premise of what we did in the beginning: starting simple, growing and adding elements to it. And we continue to grow,” he says. Furmston’s colleague Andrew Owen, Performance Manager HSE, says that although he cannot deduce that Synergi Life has reduced the number of incidents, it has definitely supported them in the process.
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“Our lost time incident rate is reduced over the last four or five years. Some of that is undoubtedly because we learn more from our incidents.” Andrew Owen, Performance Manager HSE, The Linde Group
Reduced lost time incident rate “What we can say is that our lost time incident rate is reduced over the last four or five years. Some of that is undoubtedly because we learn more from our incidents,” he says. “We are able to analyse the data we put into Synergi and start to learn lessons as to what’s gone wrong.” Furmston is quick to assess the most important strengths of Synergi Life. “The key one is flexibility,” he says. “The second one is language. It is vitally important for users who don’t speak English to be able to report the incident in their local language. The third one is that it’s web-based and independent. People can report from anywhere.” Configurable software Owen is a chemical engineer by training and has worked for the company for 28 years. “Probably the most important thing from my perspective was that we could get the data out. We liked the reporting side of the module. We could see that we could categorize and then run reports to see what was going wrong, to see what the root causes were or where we were having incidents. That was a very simple process to do,” he says. “We could see that Synergi Life was very configurable, very flexible, it could do what we wanted it to do.”
“Our management team is very satisfied with Synergi,” he says. “They are beginning to reap the benefits of the data we have.” That has not happened overnight, as incident management is a process of learning from previous data. “We have to collect data for a year or two before we can start to trend on the same basis. Now we’re able to do that,” says Owen. “The management team is getting more interested in the data that is there and are regularly asking the question: ‘What do we have in Synergi? Can Synergi answer the question?’”
THE LINDE GROUP IN BRIEF The Linde Group is the largest gases and engineering company in the world with approximately 63,500 employees working in more than 100 countries worldwide. The Linde Group has three divisions: Gases, Engineering and Gist. The company is a world leader in the international gases market offering a wide range of compressed and liquefied gases as well as chemicals. The gases are used, for example, in the energy sector, steel production, chemical processing, environmental protection, and welding, as well as in food processing, glass production and electronics.
DNV GL TEXT ETIENNE TE BRAKE PHOTO JTC CORPORATION
MATCHMAKER FOR CLEAN TECHNOLOGY MARKET IN ASIA A new technology exchange platform initiated by the Asian Development Bank and set up by ReEx Capital Asia and the DNV GL Clean Technology Centre aims to match buyers and sellers of low carbon technologies to speed technology transfer to developing Asia.
The new Singapore-based entity, IPEx Cleanetch Asia, will act as a matchmaker and service provider, assisting both technology companies from around the world with innovative products and services, and prospective buyers and adopters in Asian countries. Believed to be the world’s first Cleantech Intellectual Property (IP) assisted brokerage platform, it is an initiative of the Asian Development Bank (ADB) and is set up by ReEx Capital Asia and DNV GL Clean Technology Centre. The initial focus areas for IPEx Cleantech Asia are solar, energy storage, energy efficiency and waste to energy. It is equipped to identify deals that could create value for both technology holders and acquirers, as well as provide enhanced due diligence assessment to cover patent, IP, financial and commercial as well as technical considerations. The market potential for Cleantech investments in Asia is estimated by the industry to be between US$20 and 50 billion per annum between now and 2020, while the World Bank estimates that a further US$20-30 billion per annum is required to shift to low-emission technologies in developing countries.
As the region is home to 53 percent of the world’s population and some of the world’s fastest-growing economies, the majority of Cleantech funding is expected to happen in the Asia Pacific region, which is also the most vulnerable to the impacts of climate change. One of the prime movers behind IPEx Cleantech Asia, ReEx Capital Asia will operate the platform with DNV GL Clean Technology Center providing policy and technical advisory services. ReEx Capital Asia’s CEO, Yanis Boudjouher, says “IPEx will operate by proactively bringing together low carbon technologies (LCTs) and those ready and willing to finance and acquire them.” Frederic Crampe, ReEx Capital Asia’s co-founder, adds that “the assisted brokerage entity will bridge LCTs from around the world with relevant Asia-based project developers and systems integrators.” The other key partner in this venture, Dr Sanjay C Kuttan, Director of DNV GL Clean Technology Centre, says “IPEx Cleantech Asia will accelerate the transfer and deployment of LCTs to developing Asia by ensuring a high level pre-feasibility evaluation is in
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IPEx Cleantech Asia will be based in Singapore which recognized as a nexus for research, innovation and commercialisation in clean technology. A leading example is CleanTech Park, the choice location for forward-looking corporations that have embraced environmental sustainability.
place that facilitates the transaction, thereby helping to mitigate climate change impacts and stimulate economic development.”
access to climate technologies and financing would help put the region on a low-carbon path that would benefit the region, and the world.”
ADB’s Jiwan Acharya, Senior Climate Change Specialist, said during the side event of United Nations Framework Convention on Climate Change (UNFCCC) Climate Change Conference recently held in Lima, Peru: “Asia and the Pacific has the most to gain and the most to lose from climate change. Greater
The parties involved in the new marketplace have extensive experience in the technology transfer, IP, technology and funding in the Cleantech sector, most notably involving investments in renewable energy projects in Asia.
CONSORTIUM OF BUSINESS PARTNERS IPEx Cleantech Asia has teamed up with key players within the low carbon technology space to cement its reach within Asia and beyond, including the World Business Council of Sustainable Development (WBCSD) – Singapore branch, Sustainable Energy Association of Singapore (SEAS), Carbon War Room, Rajah & Tann LLP, Bloomberg New Energy Finance, Nexus – Carbon for Development, Tsing Hua University, Flatiron Strategies, Infuse Ventures, the intellectual Property Office of Singapore, the Economic Development Board of Singapore (EDB) and the UK Foreign and Commonwealth Office.
DNV GL TEXT JAAP BRUNSCHOTEN PHOTO GLOBAL CONTACT
A NEW POWER RESOURCE COMES TO LIFE UNDER THE DESERT SUN The Middle East is poised for a strategic shift in energy resources. Shams Power Company in Abu Dhabi is leading a break-away from the region’s stereotypical role as an oil and gas producer to make it home to one of the world’s largest concentrated solar thermal power arrays.
In the western region of the Abu Dhabi Emirate, a desert area of 2.5 square kilometres is covered by parabolic mirrors that can produce 100 MW of concentrated solar thermal power. Shams 1 is the first utility-scale renewable-energy power facility in Abu Dhabi, and it was developed by Shams Power Company, a special-purpose company owned by Masdar, Total and Abengoa Solar. Yousif Al Ali, general manager of Shams Power Company sees the operational launch of Shams 1 in March 2013 as a clear signal that the Middle East, led by the United Arab Emirates (UAE), has begun a significant transition toward investing, deploying, and advancing sustainable sources of power. “We are a frontrunner in concentrated solar power because we want to extend the UAE’s leadership in the energy sector,” says Al Ali. “Our goal is to transform the economy from one based on hydrocarbon resources to one based on knowledge and innovation. Shams 1 is a major milestone in the UAE’s economic transformation, helping redefine the role that the region will play in supplying the world with power.” Long-term diversification The deployment of renewable energy is helping the Middle East address its growing and long-term energy
requirements. Holding nearly half of the world’s renewable energy potential, the Middle East and North Africa region has an economic, social and environmental opportunity to harness its abundant resources. Investments by the Emirates account for about 68 per cent of the Gulf’s entire renewable energy capacity, and other nations in the Middle East and North Africa are moving in the same direction, including Saudi Arabia, Qatar, Jordan and Morocco. “Shams 1 delivers immediate economic, social and environmental impact to the UAE,” says Al Ali. It will provide enough power for 20,000 UAE homes and saves 175,000 tons of CO2 per year, equivalent to planting 1.5 million trees or taking 15,000 cars off the road. It has created 100 green jobs – 30 per cent of them for UAE nationals – and this number is expected to grow. “Through the use of solar power, the UAE can reduce its need for ‘peak shaving’ generators, which are expensive and idle most of the year, and above all, domestic renewable energy production extends the life of the Emirates’ hydrocarbon supply, supporting long-term energy and economic security.”
“Holding nearly half of the world’s renewable energy potential, the Middle East and North Africa region has an economic, social and environmental opportunity to harness its abundant resources.”
“The renewable energy power facility represents the first significant step towards diversifying UAE’s energy sources,” says Mr Yousif Al Ali, General Manager of the Shams Power Company. He is responsible for managing all development and operational activities related to the concentrated solar power plant.
Intermittency challenges overcome Shams is the Arabic word for sun. Concentrated solar thermal technology was chosen for Shams 1 rather than concentrated photovoltaics (CPV) which turn sunlight directly into electricity. In contrast, concentrated solar thermal technology turns sunlight into heat energy and then electricity. At the time of the project’s initiation in 2009, CPV was a nascent technology and more costly than solar power.
Shams 1 uses parabolic trough technology to harvest sunlight and convert it into heat energy used to run a steam turbine to generate electricity. A total number of 258,048 mirrors heat up the thermal oil, which reaches a temperature of around 390˚C. By means of heat exchangers, the heat from the oil is transferred into the steam generators (boilers), to a water-steam cycle, in order to generate steam. Booster heaters further increase the steam temperature. Ultimately the generated (superheated) steam has a temperature of 540˚C and a pressure of 100 bar. The generated steam feeds a steam turbine, which drives a generator to produce 100 MW of electrical power. Al Ali’s engineers have had to overcome local environmental challenges to maintain Shams 1’s operation at peak efficiency despite the harsh desert climate. For example, the need to clean sand off the mirrors has been overcome by the use of five, high-tech cleaning trucks that are able to clean the full solar field in three nights. Al Ali is proud of the achievements of his company and proud to be part of the country’s energy transformation. Located in the centre of the country’s hydrocarbon industry and at the heart of its Bedouin heritage, Shams 1 now brings renewable energy to the region, helping build a more sustainable future.
“In addition, we were attracted by the solar thermal technology’s ability to provide back-up power generation at night, during cloud cover or low solar radiation, which was an attractive proposition to our customer, the Abu Dhabi Water and Electricity Company.”
DNV GL TEXT MANDAGMORGEN PHOTO DNV GL/MAGNUS DORATTI
THE OPPORTUNITIES HAVE NEVER BEEN GREATER There is a paradigm shift in the development of future growth opportunities, but still there remains barriers to overcome. That is the background for the international project which DNV GL, the Danish Think-Tank Monday Morning and the UN Global Compact have started.
One million human lives saved, 195,000 – 261,000 new jobs created, GDP increased by USD 37 – 60 billion, an increase in crops of 1.5 million tonnes and a drastic reduction in CO2 emission. That could be the results of four climate projects in four countries. The World Bank is behind these sensational attempts, which are about modern cookers in China, express bus services in India, biogas plants on farms in Mexico and energy produced from Brazil’s waste. The results are explained in an article called The World Bank: let climate protection drive social progress and show that, if the local attempts became national, the four countries would achieve surprising results – both economic and social.
It is examples such as these that have inspired DNV GL, together with the Danish Think-Tank Monday Morning and the UN Global Compact, to start the Global Opportunity Network – an international project which will document how global risks can be turned into new growth and development opportunities worldwide. Around 300 experts in eight destinations in Europe, South America, North America, Africa and Asia have recently met to discuss how five selected risks can be turned into new business ideas for both countries and companies. This idea has arisen from the fundamental acknowledgement that we can only combat the greatest risks
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Around 300 experts in eight destinations in Europe, South America, North America, Africa and Asia have recently met to discuss how five selected risks can be turned into new business ideas for both countries and companies. Here, participants in the panel talks held at DNV GL’s headquarters in Høvik, Norway.
by turning them into opportunities. That means ending the risk society and instead focusing on a future that contains more opportunities than ever. It is simply a question of which reality we choose – whether the
glass is half full or half empty. The World Bank’s examples show that this is not just words but may become a new reality.
However, there must be a change in the mindset that has dominated the international agenda for a number of years and produced an increasing flow of analyses and books on the threats and risks that will almost inevitably change our way of life, among other things as a result of climate change and the shortage of basic natural resources. The “awakening” that the analyses have created has been necessary and the gloomy perspectives must be maintained in order to motivate people to make more of an effort. But they must not stand alone. We must focus at least as much on the choices we have – that every risk requires a solution and that the sum of these solutions may be a crucial driver for new growth and prosperity. Based on that logic, we may be facing a new industrial revolution – a revolution driven by our need to change our way of thinking, where we look at risk to inspire opportunities – and use this as our key driver for innovation This way of thinking will now be tested by the Global Opportunity Network that has chosen to focus on the following five risks: extreme weather, the shortage of clean water, the continued dependency on fossil fuels, chronic illnesses and the risk of global city chaos, i.e. that explosive growth in urbanisation may trigger great social and environmental challenges. Other risks could have been chosen with just as much justification. The common denominators of these five are, among other things, that they are rapidly accelerating, very complex, global, affect large populations and require new types of solutions – fast. For this reason, they cannot be resolved by some sectors alone, but require wide and close cooperation across society. The absolutely biggest challenge is the speed with which the new reality is developing. Only a few years ago, climate changes were future scenarios, threats that lay 50 years into the future. Today, they have become everyday threats and require immediate action. We are confronted with what the American author Alvin Toffler so convincingly described in his book “Future Shock” in 1970, in which he predicted a future with constantly increasing changes that take place at increasingly shorter intervals. The shock is that we are
not prepared for this new reality and therefore do not adapt quickly enough – and this accelerates these challenges. Future Shock was and is a scenario and can be used to achieve new understanding. The Global Opportunity Network is an expression of this insight. This project alone will hardly change the world, but it can hopefully help to spread the understanding of the difference between a risk and an opportunity. This is determined by how quickly we discover the difference, i.e. the faster we react, the more the opportunities that are triggered by the risk. This is a very simple cost-benefit analysis and the new project will probably be able to document this. DNV GL, Monday Morning and the UN Global Compact identify with a long-term and wide-ranging way of thinking about growth – simply because it combines good sense and economic sense into one concept. Our creation of the Global Opportunity Network is part of our efforts to document the obvious advantages – and thus contribute to the formation of a theory. A sign that the paradigm shift is really taking place in large companies will be when they talk less about “risk” and more about “opportunity” management – quite simply due to the realisation that, despite everything, the opportunities are greater than the risks. However, there is a considerable mental difference between avoiding risks and utilising opportunities. Among other things, this is a question how reactive or proactive one wants to be – whether to build the famous windbreaks or the just as famous windmills.
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The Global Opportunity Report
5 RISKS – 15 OPPORTUNITIES – 100 SOLUTIONS Why The Global Opportunity Report is an annual publication intended to demonstrate that in every risk there is opportunity. It aims to create action and collaboration to address the great sustainability challenges facing society today. It does this by offering the concept of opportunities as a new lens to supplement the focus on risks that currently dominates the strategic outlook of companies, organisations and governments. Its main claim is that, in order to move towards a safe and sustainable future, we must become better at identifying and seizing the opportunities for sustainable progress. Phrased differently, we wish to replace the concern instilled by risks with the confidence inspired by opportunities. How For the first edition of the report, to be published in January 2015, the following five risks were selected by a group of DNV GL experts: extreme weather, the continued rise in non-communicable diseases, water scarcity, unsustainable urbanization and lock-in to fossil fuels. The Global Opportunity Report is intended to demonstrate how these five global risks can be turned into 15 tangible opportunities and more than 100 solutions for societies and companies across sectors. The 15 opportunities, each of which represents sustainable responses to current global mega-risks, were identified through a process involving some 300 individuals, organized in opportunity panels in eight cities on five continents. A variety of players, including businesses, academia, NGOs, youth organisations and public-sector representatives, were involved in the process. The opportunity panels’ output reflects geographical challenges and region-specific responses to the selected five risks. The opportunity panels were followed by a survey which has mapped how interesting the private-sector decision makers find the 15 opportunities. The report furthermore presents more than 100 readily available solutions, demonstrating how businesses, governments and civil society around the globe already prove how these opportunities can be seized through their daily actions. Whom The Global Opportunity Network was launched by DNV GL, the Monday Morning Global Institute and the UN Global Compact in August this year. With this endeavour, the partners aim to identify opportunities for sustainable responses to a range of global risks. For more information: www.globalopportunitynetwork.org
“In order to speed up the transition to a sustainable economy, it is crucial to identify the markets’ current confidence in and willingness regarding sustainable innovations and prospects that are available today. At the same time, I firmly believe that the greatest risk we, as a society, are facing right now is not seeing the opportunities inherent in the transition to a safe and sustainable future. To fast track the transition, we must map the paths of least resistance.” Bjørn Kj. Haugland, DNV GL Group Chief Sustainability Officer.
A FORCE FOR GOOD Few people have done more to push sustainability across global business than Georg Kell. Protecting people and planet, he says, is simply good business sense.
TEXT HANNE CHRISTIANSEN PHOTO DAG THORENFELDT
Georg Kell may very well be the world’s foremost advocate of sustainable business. As the architect and Executive Director of the United Nations Global Compact, the world’s largest voluntary initiative for corporate responsibility, he has spent 14 years working tirelessly to unite business purposes with the UN’s universal principles. Anything else would simply be bad for business.
You can’t hide Since the Global Compact’s founding in 2000, Kell has seen first hand how corporate responsibility has gone from the margins to the mainstream. Today, the initiative encompasses 8,000 corporate participants in 145 countries. Seeing CEOs all over the world backing the initiative has been truly exciting, he says, but the dayto-day reality is still far from rosy.
A source of opportunities “For-profit corporations must be better aligned with public policy and societal priorities,” he says. “That’s clearly the vision for the future. In practical terms, it means individual corporations must fully master the integration of environmental, social and governance issues, and have a long-term vision that articulates what sustainability means for their business model.”
“It’s very tough to see 1.5 billion people still live in fear of violence. Almost a billion lack basics like water, and hunger is still a huge issue. As the World Bank rightly argues, corruption is still the single biggest roadblock to unlocking development. The root cause of most of the challenges is the lack of long-term commitment to good governance.”
Kell is fuelled by his belief that shifting to a sustainable mindset offers an unprecedented opportunity for business to do better. “Rather than seeing environmental issues as a cost or liability, business needs to translate it into an opportunity,” he says. “It’s about seeing social inclusion and good treatment of workers not as compliance, but as an empowering concept. Look at diversity as a source of innovation, not something you have to ensure by law. Regard supply chain capacity building as a way to build long-term market presence and strengthen your own know-how.”
Kell believes fighting corruption is one of the most catalytic actions we can take to speed up the transition towards a more sustainable future.
Keeping the world open “Most companies suffer under corruption and if they had a choice, they would prefer to live without it,” he argues, adding that the long-term trend is clear: “If there’s one thing that is certain about the future, then it is that transparency will continuously be on the rise. Technological change is irreversible – personal empowerment is here to stay. You can no longer hide from it, so you better be proactive.”
ISSUE NUMBER 02.2014
Kell sees himself as a global citizen, mirroring his profound belief in the importance of multilateralism. Open borders, he argues, is a vital condition for peace, stability and economic development that make way for innovation. “Humanity has shown an enormous capacity to harm itself and we should be aware of that all the time. There are some worrisome trends around the world: nationalism, inward-orientation and extremism. Those are the biggest enemies not only of human survival but also of sound economic growth.” Market-led development, he says, can only flourish in an environment of openness, transparency and commitment to multilateralism. “Good solutions can only travel fast and wide in a world economy that is open and supports the spread of knowledge that is diffused as rapidly as possible.”
Put a price on it In a future where more people share fewer resources, Kell is convinced certain market developments will prove inevitable. “In the long run, scarcity will drive up prices, so anything you can argue Mother Nature produces is bound to appreciate in value. Water stewardship and pricing air – these are global issues that will be crucial for all industries. It’s a safe bet.” Within this new reality, there will be no room for political hesitation. Leaders must stop being a bottleneck to sustainable development and start providing business with the right incentives. “We need to price negative externalities, because it’s the only way to transform market incentive structure so that green investment is motivated and crowds out dirty brown investment. Ultimately, we need to achieve a binding commitment for a carbon price by 2015. Kell recognises that it’s a long-term transformation, but argues that change can come fast with enough political determination. Countries like China, with a firm approach to policy-making, are making progress. “We had a Summit meeting in China recently,” he explains, “where the government actually asked all state and privately owned companies to embrace our Caring for Climate platform and be part of the solution
Georg Kell, Executive Director of the United Nations Global Compact
to cut down both small-particle emissions and greenhouse gas emissions. That’s a huge bet.”
Collaborate and innovate In the meantime, Kell says there is only one way for business to accelerate progress. “Collaborate!” he urges. “Don’t just wait for perfect policies to settle in – collaborate with others, and make the case to policymakers. Some of the most exciting innovations – whether it’s on climate action, water management or social entrepreneurship – have come from cross-industry collaborations. No company can really transform the situation on its own, but working with like-minded people in business and civil society, there’s a good chance for high impact and real transformation.” As long as we don’t forget about our commitment to cooperation, he says his outlook for the future is optimistic. “I think the concept of markets is the best that humanity has invented, but we need clear incentive structures and rules to ensure entrepreneurship can play its full role. This article appears in DNV GL’s NEXT book, which includes interviews with a number of forward-thinking, progressive and inspiring people. For more information: http://www.dnvgl.com/technology-innovation/next
EXPLORING A SUSTAINABLE FUTURE:
SIX STRATEGIC PROJECTS As DNV GL celebrates its 150th anniversary and first year as a merged company, the world is faced with great challenges. Severe resource constraints, financial instability, widening income gaps, environmental degradation, unemployment and social unrest are clear signals that ‘business-as-usual’ cannot continue. Instead of celebrating past achievements, DNV GL has decided to use the anniversary as an opportunity to reflect upon what can be done to achieve our corporate vision of a safe and sustainable future. Six ‘themes for the future’ have been explored throughout 2014 – areas where we can leverage our history and expertise to translate our vision to impact. The themes were selected as part of our efforts to take a broader view of the relationship between technology, business and society.
The six reports were launched in February 2014: 1. A safe and sustainable future: enabling the transition 2. From technology to transformation 3. The future of shipping 4. Electrifying the future 5. Arctic: the next risk frontier 6. Adaptation to a changing climate The aim is to use the themes’ findings to engage a wide range of stakeholders in a forward-leaning discussion about how to achieve our vision – global impact for a safe and sustainable future. The six reports can be downloaded here: dnvgl.com/technology-innovation/strategic-projects
ISSUE NUMBER 02.2014
DNV GL: The roots for a safer, smarter and greener world.
SAFER, SMARTER, GREENER
A magazine from www.dnvgl.com. In this issue: - Mapping out a sustainable future, DNV GL President & CEO, Henrik Madsen. - DNV GL celebra...