Low-Carbon Energy

The UK’s Energy Security Secretary Grant Shapps outlined at the end of March steps to strengthen Britain’s long-term energy security and independence to help deliver cleaner energy for the country.

The UK committed to fund carbon capture usage and storage (CCUS) with £20 billion. The first projects will be announced to progress to the next stage of the negotiations to rollout the first carbon capture clusters in the industrial heartlands. The round for areas to apply for two additional future clusters has also been launched and there will be an opportunity for further projects to be added to the first two clusters. The government also looks to kick start investment into the UK’s emerging floating offshore wind industry by launching a £160 million fund to support port infrastructure projects and secure the UK’s leadership in this new technology. The UK will also back new green hydrogen production projects with the first tranche under the £240 million Net Zero Hydrogen Fund. The UK government will open the fifth round of the UK’s scheme to incentivise investment in renewable electricity, backed by a budget of £205 million. Contracts for Difference are now being held annually. Support for nuclear energy, EV rollout, energy efficiency, and heat pump investments are also part of the government’s strategy.

The UK’s Offshore Wind Champion, Tim Pick, appointed in May 2022 as an independent advisor to government and industry on the development of the UK’s offshore wind sector, has issued a report on the offshore wind opportunities. Recommendations in the report include reducing the timelines for the permitting process for offshore wind farms, investment in grid connections, and reform of the queue arrangements for grid connections to reflect the changing energy system and sources.

“If I had to sum up in one sentence where we stand today, I couldn’t use words better than those of a European developer with investments across the UK: “The UK is long on seabed leases, but short on timely grid connections,” Pick said in the foreword to the report.

“If you take just one message from this report, it should be the urgent need to upgrade our national grid for a world of high renewables penetration, and widespread electrification of homes and businesses. Grid connections are increasingly becoming the rate-limiting factor for our Offshore Wind deployment going forward.”

In hydrogen development, the UK is leading the way in delivering tangible policy support to kick start investment in Europe, with the Netherlands in close second, consultancy Timera Energy said in a report. Achieving the UK target of 2 GW of hydrogen production by 2025 effectively requires multiple larger scale project FIDs this year, the analysts said.

“Even accounting for some slippage in timelines, the UK hydrogen investment landscape should be a lot clearer by the end of this year. And that is going to attract a lot of new investors & projects,” Timera Energy said.

Rystad Energy has estimated that Europe is leading global efforts to produce and import green hydrogen and its attention is now turning to building the necessary infrastructure to get the hydrogen to demand centres.

“Spain, France, and Germany are among the countries committed or considering cross border pipelines to facilitate energy flows, while the UK with its extensive gas grid finds itself in a fantastic position to switch from natural gas to hydrogen,” Rystad Energy said in new research in early April.

“The steady increase in pipeline projects for hydrogen is an early sign that the energy transition is gathering pace. Europe, with its extensive gas grid is well placed to make the jump,” said Lein Mann Bergsmark, senior analyst, hydrogen.

“Switching infrastructure from gas to hydrogen is possible and cost effective. But the greatest barrier is not financial, but the physical properties of hydrogen itself which differ substantially from oil and gas.”

Europe invested just 17 billion euros in new wind farms in 2022, down from 41 billion in 2021 and the lowest investment figure since 2009, WindEurope said in a report at the end of March. At least three commercial-scale offshore wind farms were projected to reach FID in 2022 but delayed the decision, so not a single commercial scale offshore wind farm reached FID in 2022.

While the EU wants to accelerate the build-out of wind energy to strengthen its energy security and ensure affordable electricity prices, recent market interventions and remaining barriers are deterring investors, WindEurope said, adding that Europe urgently needs to restore investor confidence.

In company news, SSE Renewables said that the world’s deepest wind turbine foundation had been installed at what would be Scotland’s largest offshore windfarm – Seagreen – off the coast of Angus. The significant milestone marks the installation of the 112th jacket at the 114-wind turbine wind farm which is a £3-billion joint venture between SSE Renewables and TotalEnergies. When complete, the 1.1-GW Seagreen wind farm will be capable of generating around 5,000 GWh of renewable energy annually which is enough clean, secure, sustainable electricity to power more than 1.6 million UK homes.

Harbour Energy and bp have entered into an agreement to develop the Viking CCS transportation and storage project. Under the terms of the agreement, Harbour continues as operator of Viking CCS with a 60% interest, while bp is acquiring a 40% non-operated share. The announcement follows the UK Government’s recent decision to launch Track 2 of its CCS cluster sequencing process, and its recognition that Viking CCS is one of two leading transport and storage system contenders for this process.

Highview Power and Ørsted agreed to carry out this year detailed technical analysis and an economic assessment to see how a potential combination of Ørsted’s wind technology with Highview Power’s liquid air energy storage can deliver a stronger investment case for future offshore wind projects by reducing wind curtailment and increasing productivity.

Norway’s Ministry of Petroleum and Energy offered two new exploration licences for CO2 storage in the southern part of the North Sea. The eastern licence was offered to a group consisting of Aker BP ASA and OMV (Norge) AS, while the northwest licence was offered to a group consisting of Wintershall Dea Norge AS and Altera Infrastructure Group through its subsidiary Stella Maris CCS AS.

Copenhagen Offshore Partners (COP) has opened a new office in Edinburgh to host its Global Floating Offshore Wind Competence Centre (GFLOWCC).

The new centre “puts Scotland and the UK at the core of our global floating offshore wind ambitions, building on strong maritime heritage, a history of innovation, and world-class energy supply chains,” said Alan Hannah, UK CEO and Partner at COP.

The UK Government on 30 March confirmed its commitment to support the deployment of largescale Power BECCS (Bioenergy with Carbon Capture and Storage) projects by 2030 and that the Drax Power Station BECCS project had passed the deliverability assessment for the Power BECCS project submission process.

RES and Octopus Energy Generation’s green hydrogen joint venture HYRO are working with Kimberly-Clark, the parent company of household brands like Andrex, Kleenex, and Huggies, to swap gas for green hydrogen at UK factories, to reduce emissions and boost energy security. HYRO is developing electrolysers to produce green hydrogen at two Kimberly-Clark UK manufacturing facilities. The two projects in Wales and Kent have now also won places on the Government's shortlist for funding, Octopus Energy said in early April.

Petrofac and Hitachi Energy have been awarded a multi-year Framework Agreement by TenneT as it works to expand offshore wind capacity in the Dutch-German North Sea. The six projects covered under the deal are worth around 13 billion euros.

The Port of Rotterdam Authority is offering a site for a green hydrogen plant with a capacity of up to 1 GW. Several companies have plans to realise a total of some 1.35 GW of electrolysis in Rotterdam, while the ambition of the Port Authority is to achieve 2 to 2.5 GW of electrolysis by 2030. The Dutch government is aiming for 4 GW nationwide by 2030.

Spanish energy firm Iberdrola and FCC Ámbito, a subsidiary of FCC Servicios Medio Ambiente, will collaborate with Glencore to provide industrialscale lithium-ion battery recycling solutions on the Iberian Peninsula through the development of a specialised facility. The partners are working to identify the right technology partners to build and commission the recycling plant, which will be operated by FCC Ámbito and will allow the pre-separation of lithium-ion batteries for subsequent refining.

IberBlue Wind, a joint venture operating in the Iberian market, announced plans for the first cross-border offshore wind project on the SpanishPortuguese border. The Juan Sebastián Elcano and Creoula wind projects will be located off the coasts of Pontevedra and Viana do Castelo and will have a combined capacity of up to 1.96 GW.