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energyfocus

ISSUE 43 SPRING 2021

F ROM T H E E N E RGY I N DUST R I E S COU NC I L ENERGY TRANSITION Europe: Leading the world in green hydrogen technology

RENEWABLES Floating offshore wind is set to take off this decade

OIL AND GAS PETRONAS on net-zero ambitions, CCUS and hydrogen

POWER Paving the way for hydrogen-based energy systems

Moving to a lowcarbon future Where are the real energy transition export opportunities and how can you access them?

INSIDE:

Graham Stuart View from the top

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Contents ISSUE 43 SPRING 2021

06 Graham Stuart

FROM THE EIC

ENERGY TRANSITION

5 Foreword

20 Europe leads the way in clean hydrogen

Q&A with Dr Nasir Haji Darman, Chief Technology Officer, PETRONAS

Bart Biebuyck, Executive Director, Fuel Cells and Hydrogen Joint Undertaking

29 Greening the supply chain

From the Chief Executive

6 View from the top Graham Stuart, Minister for Exports

10 News and events Updates from the EIC

OIL AND GAS 26 Going green

16

Andrew Cuniah, Supply Chain Operations Manager – London, Bechtel

Clean energy hotspots

13 The big question What successes have members had in exporting clean energy technology?

16 Special report

POWER

Lucy Woods on clean energy export opportunities and the challenges ahead

RENEWABLES

34 My business Graham Melroy, Project Director, T12 Consultancy

24 Harnessing the potential for floating offshore wind

31 The power of hydrogen

20

Professor Armin Schnettler, Executive Vice President New Energy Business, Siemens Energy

Europe’s hydrogen revolution

Aaron Smith, Chief Commercial Officer, Principle Power

25 Market to watch Spotlight on Japan’s nascent floating offshore wind market

NUCLEAR

31

26

Hydrogen gas turbines

The Energy Industries Council 89 Albert Embankment, London SE1 7TP Tel +44 (0)20 7091 8600 Email info@the-eic.com Chief executive: Stuart Broadley Should you wish to send your views, please email: info@redactive.co.uk

33 Nuclear opportunities in the UAE

Decarbonising oil and gas

Editors Sairah Fawcitt +44(0)20 7880 6200 sairah.fawcitt@redactive.co.uk Mark Risley +44(0)20 7091 8600 mark.risley@the-eic.com Account director Will Hurrell Production director Jane Easterman Senior designer Gene Cornelius Picture editor Akin Falope Content sub-editor Kate Bennett

Sales and advertising Richard Hanney +44(0)20 7324 2763 richard.hanney@redactive.co.uk Energy Focus is online at energyfocus.the-eic.com ISSN 0957 4883 © 2021 The Energy Industries Council

Q&A with Ali Al Zaabi, Chief Operating Officer, ENEC

Energy Focus is the official magazine of the Energy Industries Council (EIC). Views expressed by contributors or advertisers are not necessarily those of the EIC or the editorial team. The EIC will accept no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material included in this publication.

Publisher Redactive Media Group, Level 5, 78 Chamber Street, London E1 8BL Tel: +44(0)20 7880 6200 www.redactive.co.uk

Recycle your magazine’s plastic wrap – check your local LDPE facilities to find out how.

www.the-eic.com | energyfocus

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Foreword Stuart Broadley CEO

From the Chief Executive: In this edition we look ahead to the return of the Energy Exports Conference, highlighting export opportunities in established and emerging markets, covering all energy technologies – but with a special focus on decarbonisation

As we passed the anniversary of the UK’s first national lockdown on 23 March, it gave many of us a reason to pause and reflect on the past 12 months. The impact of 2020 on our personal and business lives still resonates, and what was initially thought (and hoped) to be a brief period has now established itself as a new way of living, changing many fundamental aspects of our lives. Reduced office space and flexible homeworking policies are here to stay for the long-haul, and travel restrictions and social distancing have led to a boom in seamless, global virtual teamworking. One thing I am acutely aware of is the resilience and diversification that has been displayed, both here at the EIC and in the wider energy industry. We have had to learn how to react much faster and more radically to uncertainty, giving a real sense of entrepreneurialism on a macro and micro scale. Looking back also gave us the opportunity to look forward. This year very much feels like more of the same, but there are signs of real hope. We are no longer in the dress-rehearsal of 2020. Now it’s time for the performance – and we all know how to do this. In the energy sector, oil price stability in the US$60 range is hugely beneficial to companies in all sectors. It gives supply chain companies – hit hard by the financial shock of 2020 – hope to rebuild their tender pipelines, invest in new technologies and consider new export

markets. There is also a real excitement and hope around the ambition and opportunities in energy decarbonisation for 2021, and particularly in the run-up to COP26 this November. The gradual return of physical events, the prospect of holidays and the improving weather (particularly for us locked-down Brits!) give a real sense of optimism for the months ahead. While it’s right that we should feel optimistic about 2021, key challenges for the energy market loom large on the horizon. While the UK government’s decision to remove fossil fuel trade subsidies represents a positive step towards decarbonisation, this may trigger the same globally. With the lion’s share of global CAPEX investment over the next five years still dominated by upstream, midstream and downstream oil and gas, could this decision prove to be premature for a supply chain already under pressure? A return to normality also hinges on a world-wide vaccine roll-out, and while many countries are making great strides in this area, others, such as Brazil, are struggling – which may hold us all back. There are fears that countries are not moving fast enough to meet COP21 targets, particularly with new COVID-19 debt burdens, and concerns that COP26 may not get the global traction the world needs to fulfil ambitious net-zero commitments. A key topic and outcome of COP26 will be the requirement for increased scale and investment in energy transition technologies such as hydrogen, CCUS, floating offshore wind and energy

storage. EICDataStream, the EIC’s global project-tracking database, shows that these sectors account for just 2% of the global project opportunities during the next five years. Without a major increase in the pace and scale of these projects, companies risk over-investing too soon, or may be distracted from their core business while these sectors are still in their infancy. If the past 12 months have proven anything, it’s that energy industry leaders have got what it takes to meet these challenges. The most diverse and sustainable businesses will be the most profitable businesses. The businesses that have a high percentage of exports across multiple energy sectors will be in the best possible position. Having now interviewed more than 60 EIC members for the 2021 EIC Survive & Thrive Insight Report, which studies the strategies that companies deploy to succeed in a crisis, there are common factors to those that have achieved success in these times. Have a vision, be persistent, but also be agile and open to change at all times – now more than ever. And above all, be kind to all the people who matter to you.

Stuart Broadley Chief Executive Officer, Energy Industries Council stuart.broadley @the-eic.com

www.the-eic.com | energyfocus

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From the EIC Q&A Minister Graham Stuart

View from the top Q&A: Graham Stuart Minister for Exports

Our message to potential exporters is simple: “Grow by exporting”

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Q&A Minister Graham Stuart: From the EIC

IMAGE: UK PARLIAMENT OFFICIAL PORTRAITS

Minister for Exports Graham Stuart talks to Energy Focus about supporting and boosting UK export performance and accelerating clean energy growth ahead of COP26

How will the new Export Strategy that’s being developed by Department for International Trade (DIT) and UK Export Finance (UKEF) build on existing policies and priorities? We will build on the 2018 Export Strategy, develop a whole-of-government approach and deliver much enhanced digital support. Lowering trade barriers, communicating the benefits, connecting to and informing companies about different market opportunities, and fostering a competitive business environment will all play a part. A refreshed Export Strategy will promote growth across the UK, create high-quality jobs and support our transition to net zero. Our message to potential exporters is simple: “Grow by exporting”. To support this, we are opening Trade and Investment hubs in Scotland, Wales, Northern Ireland and Darlington, and expanding UKEF’s lending capacity while simultaneously promoting fair and open trade overseas. What steps is the government taking to promote the UK’s energy sector to international markets? We actively promote the UK’s energy sector internationally, and the Prime Minister’s 10-Point Plan showed the ambition for UK renewables. With government support, GE Renewable Energy has recently committed to manufacturing offshore wind turbine blades at Teesside, and similar conversations are taking place with cable, tower and monopile manufacturers. Our civil nuclear team is working across nine priority markets, utilising connecting UK supply with demand and forging new partnerships between companies. Do you see government taking a more active and co-ordinated role in government-togovernment diplomacy and negotiations to help UK businesses get to the front of the queue for exporting to key global markets? Current partnerships have secured hundreds of millions of pounds for UK companies – our agreement with the Poland Solidarity Transport Hub positions us as a

partner of choice for rail, airport, and air traffic opportunities. Through our arrangement with Peru, we’re supporting the reconstruction of its Northern regions, aligned to our own goals of sustainable and climate-resilient infrastructure. The Sovereign Investment Partnership with UAE, our memorandum of understanding with Taiwan on offshore wind, and strategic tie-ups with African nations such as Mozambique on renewables all show the commercial benefits that can flow from government leadership. With Brexit ‘done’, how is the UK now perceived globally from the standpoint of trade and investment and being a strategic and trustworthy partner? It’s simple: people want to do business with the UK. In addition to the trade deals we have already signed, negotiations are progressing well with the US, Australia, New Zealand and others, and we have started the Comprehensive and Progressive Agreement for Trans-Pacific Partnership accession process. We staunchly support free, fair and open global trade and the World Trade Organization. A recent report from Barclays showed that overseas buyers are willing to pay between 10–15% more for products with the ‘Made in Britain’ label, which shows just how respected our exports are across the world. How are preparations proceeding for COP26, and are events like the EIC’s Energy Exports Conference (EEC) important in preparing businesses for COP26? Our COP26 presidency comes at a critical time, and there is an unprecedented opportunity to reboot global economies to become more sustainable after the pandemic. There is an enormous role for businesses to play, not only at November’s summit but, perhaps more importantly, through engaging with the hundreds of events in the preceding months and hosting COP visitors before or after their engagement there. Events such as EEC 2021, focusing this year on green exports, showcase UK green businesses, champion our clean growth offer and advance our sustainable trade

About Graham Stuart Graham Stuart was appointed Minister for Exports in February 2020. Prior to this, Mr Stuart’s Parliamentary career has seen him serve as Minister for Investment (2018– 2020), Assistant Government Whip with responsibility for the Department of Health, and later for HM Treasury and the Ministry of Defence (2016–2018), and Chair of the Education Select Committee (2010–15). He has been the Member of Parliament for Beverley and Holderness since 2005. Before becoming an MP, Mr Stuart developed a successful career in publishing, and was a member of Cambridge City Council from 1998 to 2004. He was born in Carlisle and attended school in Scotland before going to Selwyn College, Cambridge to read philosophy and law.

www.the-eic.com | energyfocus

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From the EIC: Q&A Minister Graham Stuart

Overseas buyers are willing to pay between 10–15% more for products with the ‘Made in Britain’ label agenda. Dubai Expo 2020 starts on 1 October, with clean growth a key element in the UK pavilion’s six-month programme, and the Green Investment Summit will be taking place in October in the run-up to the COP. This year offers a great opportunity to sell UK capability and our investment offer to the world. By working together, we can make the most of it. EIC Survive & Thrive Insight reports have highlighted that UK businesses find developing new export markets to be the most challenging growth strategy. What can the government do to encourage more exporting? Whether by negotiating new trade agreements or pursuing increased market access, we are seeking to lower the barriers businesses face in internationalising their sales. Our research shows that exporting businesses are more productive, resilient, profitable and innovative than their non-exporting peers. So whether through improved digital tools as part of the Export Academy, export incentives, grants through the Internationalisation Fund or improved co-ordination across the government, we are seeking to do everything we can to encourage, inform, connect and finance more energy businesses to look outwards. Our award-winning export credit agency, UKEF, has developed new products during the past year to help businesses cover the current risks of exporting, including the General Export Facility (GEF), which provides an 80% government guarantee for bank loans for exporting SMEs. Available from the main high street banks, GEF is untied and, coupled with UKEF credit insurance, should persuade the most

sceptical finance director that investment in foreign sales growth is possible and wise. Despite your survey results, I’m pleased to say that UK exports were growing steadily before COVID. In 2019, we were the only top 10 exporting nation to increase overseas sales and, in fact, overtook France to become the fifth largest exporter in the world. How is UKEF adapting to COVID-19, decarbonisation and sustainability? UKEF is already focused on supporting renewable energy projects overseas, with £2bn dedicated to financing clean growth projects, which will enable UK firms to win green energy contracts they may have otherwise missed. It also provides favourable financing terms for renewable energy projects, which can receive repayment periods of up to 18 years, nearly double the usual 10-year outlook. This is already bearing fruit. UKEF has provided £500m to support four major offshore wind projects in Taiwan, and companies such as East Anglia-based Seajacks will ship materials for wind turbines on UKEF-supported projects overseas.

Exporting businesses are more productive, resilient, profitable and innovative than their non-exporting peers

There is still a need for ongoing support for the oil and gas sector to ensure firms looking to transition are effectively supported to do so, for which UKEF is developing a working capital Transition Export Development Guarantee product, which will be subject to strict application criteria. How does DIT plan to support oil and gas supply chain businesses going forward? The oil and gas sector has an important contribution to make to the UK’s energy transition, having many essential skills and capabilities in its supply chain. We’ll continue to engage with organisations such as EIC to support oil and gas supply chain companies transitioning to other subsectors. The North Sea Transition Deal, announced on 24 March, sets out an ambitious plan for how the UK’s offshore oil and gas sector and the government will work together to deliver the skills, innovation and new infrastructure required to meet stretching greenhouse gas emissions reduction targets. The Deal aims to support and anchor the expert supply chain that has built up around oil and gas in the UK, to both safeguard and create new high-quality jobs. It will transform the sector in preparation for a net-zero future and catalyse growth throughout the UK economy. Specifically, it includes: Early reductions in offshore production emissions of 10% by 2025, 25% by 2027, and 50% by 2030, against a 2018 baseline, to meet the sector’s aim of creating a net-zero basin by 2050. This will be supported by joint work to address the commercial and regulatory barriers to the electrification of offshore platforms to realise these targets Investment of up to £14–16bn by 2030 in new energy technologies, with supported by business models to enable CCUS and hydrogen at scale A voluntary industry target of 50% local UK content across the lifecycle for all related new energy technology projects by 2030, as well as in oil and gas decommissioning. This will be supported by the appointment of an industry supply chain champion who will support the co-ordination of opportunities with other sectors A 60Mt reduction in greenhouse gas emissions, including 15Mt through the

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Q&A Minister Graham Stuart: From the EIC (Left) Plans to make the UK a global leader in green energy include developing the Teesside offshore wind hub, where (inset) GE Renewable Energy will build a new world-class wind turbine blade facility

infrastructure. We have a unique balance of resources that will allow us to reach a 68% reduction (vs 1990) in GHG emissions by 2030 – faster than any other major economy. How important are ‘clusters’ to the future success of energy transition? Energy clusters are vitally important to the future success of energy transition and advancement of the levelling up agenda. For offshore wind, the cluster of manufacturing and installation enables the UK to be on par with its European neighbours. Looking ahead, the Climate Change Committee advises that multiple CCUS clusters will be needed by the mid-2020s for the UK to reach net zero by 2050, and we have committed to delivering these.

UKEF supports renewable energy projects overseas, with £2bn dedicated to financing clean growth projects

The government is considering a green levy to fund Building Back Better utility-scale green projects. When and how might the green levy work? The Green Gas Support Scheme (GGSS) and Green Gas Levy (GGL) will support increased biomethane injection into the gas grid. Following on from the Non-Domestic Renewable Heat Incentive (NDRHI), GGSS will provide tariff support for biomethane produced by anaerobic digestion and injected directly into the gas grid. GGL will apply to all licensed fossil fuel suppliers of gas and raise the capital required to fund GGSS. We intend for both GGSS and GGL to launch in the autumn of 2021, and they will contribute 21.6MtCO2e of carbon savings and support high-quality jobs.

Energy transition will require a consistent and significant pipeline of projects to keep the UK supply chain engaged. How is this pipeline of projects shaping up? The UK has an extensive pipeline of hydrogen projects, which is developing further with Industrial SuperPlaces, a hydrogen village and town, and the Net Zero Hydrogen Fund. Our commitment to supporting the deployment of carbon capture clusters, with an infrastructure fund of £1bn, will help develop the UK’s pipeline of CCUS projects. Transition strategies vary by nation due to natural resources and existing

The EIC is the voice of the energy supply chain. Do you see a role for UK-wide, all-energy taskforces to nurture and develop the supply chain for domestic and export growth? UK-wide, all-energy taskforces are important in highlighting and co-ordinating the capabilities of key energy industry players and sectors. They can help provide a voice for the UK energy sector and an avenue for government to work directly with industry. Used effectively, they can support the development of a UK energy transition roadmap and maximise the UK’s future trade potential from established and emerging technologies.

progressive decarbonisation of UKCS production over the period to 2030 Support for up to 40,000 direct and indirect supply chain jobs in decarbonising UKCS production and the CCUS and hydrogen sectors

IMAGES: TEESWORKS / LM WIND POWER

Does the move towards clean energy provide significant opportunities for businesses in the UK? The clean growth and net-zero agenda offer significant opportunity for businesses in the UK: the low-carbon economy has the potential to deliver £60–170bn of export sales between 2015 and 2030. The new Office for Investment will play an important role in delivering the 10-Point Plan by funnelling investment into the UK. The UK Hydrogen Strategy, due to be published later this year, is a top priority. We are working with industry through the Hydrogen Advisory Council, and, in relation to CCUS, we could get up to £10bn of an estimated £200bn per year of the global CCUS market by 2050. In offshore wind the UK has 10GW deployed, with a further 30GW planned by 2030, including 1GW of floating offshore wind. To support this growing industry, the UK is investing £160m into modern ports and manufacturing infrastructure, providing high-quality employment in coastal regions.

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U P DAT E S F RO M T H E E N E RGY I N D U S T R I E S C O U N C I L

news&events Upcoming virtual conferences in 2021

About the EIC Established in 1943, the EIC is the leading trade association for companies working in the global energy industries. Our member companies, who supply goods and services across the oil and gas, power, nuclear and renewables sectors, have the experience and expertise that operators and contractors require. As a not-for-profit organisation with offices in key international locations, the EIC’s role is to help members maximise commercial opportunities worldwide.

Events

EIC LIVE e-vents

The North Sea Decarbonisation Conference When: 11–12 May 2021 Why attend? The North Sea Basin is in pole position to play a leading role in the transition to a low-carbon energy future and presents an opportunity to further connect the UK and neighbouring European markets. As the role of oil and gas remains key, there is still an increasing pressure to reduce emissions and shift towards clean energy. The development of the lowcarbon economy accelerates with an opportunity to create value through integrated energy systems and deliver net-zero deadlines, with a significant £250bn prize on offer.

Over the next few months, we have some exciting virtual events and conferences to look forward to, many of which are free to attend for EIC members, including the North Sea Decarbonisation Conference in May, and the Energy Exports Conference 2021 in June. Plus, don’t miss the Road to COP26 events we have planned in the lead-up to the UN climate conference taking place in Glasgow this November. To find out more and book onto our latest events, visit www.the-eic.com/ Events/Calendar

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From the EIC News and events

EEC2021 highlights actionable project opportunities

REPNEW O OUTRTS NOW

Reports EIC Country Report: Guyana y

The North Sea Decarbonisation Conference will include sessions focused on offshore wind, hydrogen, CCUS, electricity interconnectors, financing net zero, ocean energy, Waste-to-X, fulfilling the skills demand, and low-carbon manufacturing. Visit www.the-eic.com/Events/TheNorth SeaDecarbonisationConference

Energy Exports Conference When: 14–17 June 2021 Why attend? The Energy Exports Conference returns online for 2021, conveniently bringing together many of the world’s key decisionmakers and the energy supply chain in one event. Whether you’re an experienced exporter or are yet to begin your exporting journey, EEC2021 highlights actionable project opportunities in key global energy markets, and discusses

the industry’s demands for clean tech and net-zero targets. Visit www.the-eic.com/Events/ EnergyExportsConference

EIC’s Road to COP26 In the run-up to COP26 this year the EIC is running a number of initiatives which will reflect the UK drive to net zero, as well as showcase the UK supply chain capability across all energy technologies and continue to ensure the sector is involved in discussions about how the UK meets its political objectives of levelling up in a reasonable and supportive way. Our members recognise and are embracing the energy transition and all that it brings, but the year of COP26 in Glasgow is about more than simply talking down one energy sector in favour of another. To this end the EIC has submitted proposals to the UK Government to be involved in the Green pavilion, to showcase members’ work. We are also holding a number of events throughout the year that will reflect this messaging. Visit the EIC website to find out more: www.the-eic.com/Events/Calendar

Recent oil and gas discoveries in Guyana’s Stabroek Block have launched the country from relative energy obscurity to the world’s 20th largest holder of proven oil reserves, with eight billion barrels discovered so far. With key operators ExxonMobil, Hess Corporation and CNOOC developing its 18 discoveries at speed, the country holds vast opportunities for the energy supply chain to develop these abundant resources.

EIC Country Report: Suriname The GuyanaSuriname basin has emerged as one of the most desirable new oil and gas production locations in the world. Exploration work by Apache Corporation and its partners at Suriname’s Block 58 have found an estimated six billion barrels of oil in recoverable reserves. With costs per barrel relatively low by international standards, Suriname has become a highly sought-after country for energy supply chain companies looking to export their technology, services and expertise. To buy or download your copy of these reports please visit: www.the-eic.com/MediaCentre/ Publications/Reports www.the-eic.com | energyfocus

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From the EIC Members’ comment

The

BIG question

What successes have you had in exporting clean energy technology?

While momentum for clean technology is spurring exports in the run-up to COP26, many companies are yet to realise their exporting potential. To help find new routes to growth, ahead of the Energy Exports Conference in June, Energy Focus asks four members to share their low-carbon exporting success stories

Andrew Bennion Managing Director at Advanced Insulation The move towards clean energy is an opportunity for Advanced Insulation. Traditionally, we have developed awardwinning, lightweight fire, blast, and acoustic solutions to tackle the challenges faced across the oil and gas industry, with a focus on offshore topside facilities. With a move away from fossil fuels, we have begun working with operators and engineering, procurement and construction contractors who need help to set up effective liquefied natural gas (LNG) operations in arduous environments to mitigate the hazards faced. A current project has brought with it an opportunity to work in a new market (build in China and deployment in Russia). With large capital investment in LNG production in Russia, there is significant future export opportunity to the region as LNG operations develop.

With a proposed operational life of 40-years, the operator had a clear set of specifications and project specific testing that any product qualified had to achieve. These included proving longevity in an arctic climate and additional country-specific tests to meet Russian standards, all of which our product achieved. Key to the success of the project is the overall weight of the structure. When completed, the gravity-based structure (GBS) must travel through a shallow river estuary where no dredging is allowed. Our lightweight ContraFlame®MS400 will provide a weight saving of 670 tonnes for each GBS, which in turn will reduce the carbon footprint of the project.

Advanced Insulation is an award-winning global supplier of insulation, passive fire protection, buoyancy and cable protection systems. From design and build to installation and maintenance, the company provides clients with best-in-class service – and products, off -the-shelf and bespoke, that perform in the most challenging environments.

Jonathan Minnitt Business Development & Study Manager at Aker Solutions Aker Solutions has a rich heritage of technology development and integration. We have been able to leverage this expertise to support the energy transition and deliver leading designs both locally and further afield. A great example of this is in HVDC (high-voltage direct current) transformer platforms and floaters. The technology was originally developed for the Norwegian Continental Shelf to enable long distance, high duty power supply, and it has since been used in a number of international projects. As the offshore wind industry gathers momentum and power requirements intensify, the opportunity to capture the value developed around HVDC technology is immense. For Aker Solutions, the UK has become a design centre of excellence for our leading HVDC transformer platforms, and moving forward we look to strengthen this further. www.the-eic.com | energyfocus

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Members’ comment: From the EIC

Ross Gatt Group Marketing Director at Valor Energy Group

Underpinning this is the digital backbone embedded within our business, which enables the delivery team – including customers, partners and other stakeholders – to drive certainty into the project cost effectively. These digital tools are continually being developed to ensure they offer greater value to the infrastructure and the full value chains that they have been designed to support. Our team collaborates actively with SMEs to create new apps and digital interfaces, bringing the latest local innovation to the fore.

Aker Solutions delivers integrated solutions, products and services to the global energy industry. The company enables low-carbon oil and gas production and develops renewable solutions to meet future energy needs. By combining innovative digital solutions and predictable project execution, Aker Solutions helps accelerate the transition to sustainable energy production.

Spencer Linsell Regional Sales Director – North, Central and South America at PetrolValves PetrolValves Group have continued to diversify our approach to the oil and gas industry with approaches to carbon capture projects and other new project technologies in the energy transition. However, probably the most meaningful change we can make is improving our approach to our traditional upstream business here and now.

We have developed an innovative new product that reduces the weight of our ball valve by approximately 25%. By removing the bolting in the body connection of our trunnion-mounted ball valve (traditionally the largest and heaviest in our range) and sealing valve body closures using industry-proven technology more commonly seen in rotating equipment, we can significantly reduce the amount of material and number of parts needed to make the valve. We are currently modelling what that weight reduction means across a full FPSO topside and external turret. We believe it reduces the carbon footprint involved, from material manufacture through to road transport across Europe and ocean or air freight to our client sites all over the world. When we combine this innovative weight reduction with our optimised body and seal design to reduce fugitive emissions in line with both ISO and API standards, we have a product that is providing a carbon reduction factor even on traditional upstream oil and gas projects, and which can continue to be utilised as the energy transition evolves.

PetrolValves is a leading flow solutions provider for the energy industry, specialising and pursuing product excellence in the engineering of valves, actuators and systems through advanced technology and delivering high quality services.

Valor Energy Group has set an ambitious net zero-carbon target for 2022. In driving towards this, we have taken the crucial step of offsetting emissions through nature-based solutions while incorporating clean energy to enhance the performance of key technologies. One of the business areas in which this has come to fruition is through our thermal enhanced oil recovery (EOR) subsidiary Cavitas Energy, during the development of the THOR (Thermal Heavy Oil Recovery) tool. The technology provides low-carbon downhole heating, which allows for targeted heat in viscous oil wells. Compared with traditional thermal EOR methods, which are generally inefficient and carbon intensive, and require significant infrastructure, THOR heats fluids downhole and with a high (>90%) power to heat transfer efficiency. This greatly improves the energy balance in heavy oil wells and helps unlock marginal heavy oil. Cavitas is currently preparing equipment for transit to the US for deployment in an onshore well. Once this equipment is in place, solar power will enhance the efficiencies and performance of the technology. When utilised in conjunction with a clean energy source, THOR can significantly reduce the carbon footprint of thermal EOR operations. If this is further supplemented with an energy storage or battery solution, the carbon footprint of thermal EOR operations can be virtually eliminated.

Valor Energy Group is a private investment group focused on investing, acquiring and managing assets in both the upstream and midstream areas of the energy sector. The company’s goal is to acquire high value assets with high growth potential, while mitigating as much risk as possible.

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HIGHEST GAS PURITY AND LOW ENERGY CONSUMPTION

Process Gas Compressor inside Diaphragm Compressor inside

Burckhardt Compression offers a complete portfolio of compressor solutions for hydrogen fuel stations and power-to-x applications. Our oil-free diaphragm (900 bar) and piston compressors (450 bar) stand for the highest gas purity at high pressures with low energy consumption and reduced maintenance costs. In addition, Burckhardt Compression has a global network of local service centers that enables us to offer local support with a quick response rate. Learn more: burckhardtcompression.com/hydrogen

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Special report Clean energy exports

Energy transition:

a golden opportunity for UK exports

With international climate agreement changes ahead, and many businesses rethinking how they work in the wake of the pandemic, Lucy Woods asks: where are the opportunities for UK energy exports?

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Clean energy exports: Special report

T

he energy export market is facing many challenges: the global transition to net-zero emissions, shifts in national energy policy and project support and funding, and the impacts of a pandemic. But with COP26 on the horizon, there are still opportunities for UK supply chain companies.

Transition, transition, transition The industry’s biggest challenge is the transition from fossil fuels. Industry focus is “all about energy transition at the moment,” says EIC Energy Analyst Tayo Idowu. Mid and downstream oil and gas demand has dropped during the pandemic, and petrochemical refineries have closed in the US. “If you’re not going to transition, you’re not going to survive, and that has forced some companies to focus on the energy transition,” says Idowu. “The story here is that, besides the environmental benefits of this shift, there are economic benefits such as tax incentives for biofuel production.” The UK is leading transition policy with its North Sea Transition Deal. From 31 March 2021, the UK will not provide financial support for overseas fossil fuels. This includes UK Export Finance support, international aid funding, and trade promotion. The deal provides for the investment of up to £3bn to replace fossil fuels on oil and gas platforms with renewables, £3bn on carbon capture usage and storage (CCUS) and £10bn for hydrogen production. The deal will help the oil and gas sector transition by providing the sector with “money and a plan”, says EIC CEO Stuart Broadley. The UK transition deal is part of a wave of international efforts: France will end export finance for oil and gas this year, oil exploration and production finance in 2025, and gas exploration and production finance in 2035. Sweden is planning to end export credits for fossil fuel exploration and extraction by 2022. The Netherlands Export Credit Agency will no longer support flaring and fracking, and Norway is giving tax breaks to encourage oil and gas decarbonisation initiatives until 2022. Across the pond, the new US administration issued a Presidential Executive Order to institutions to begin planning the end of its overseas fossil fuel finance. In the MENA region, the UAE’s oil and gas companies are reducing emissions on

oil platforms offshore, and gas operators in Senegal and Mauritania are also leading decarbonisation efforts, says Diveena Danabalan, EIC Senior Energy Analyst and Strategic Relationship Manager for Upstream Oil and Gas. Among these changes, Danabalan says, the opportunities for the oil and gas sector will be in projects that can be licensed before the above deadlines, and in transitioning oil and gas offshore platforms to renewables.

Opportunities and support for renewables Alongside these opportunities, and the support and finance available to help hydrocarbons transition, finance is being prioritised for renewables generation development. Last year, 30% of UKEF energy support went to renewables, and in 2019, UKEF provided £800m for renewable projects overseas. There are policy, pricing and subsidy mechanisms for offshore wind to help nations meet energy demands while transitioning. This allows governments to “pursue renewables targets while promoting local manufacturing jobs”, says Lara Juergens, former EIC Senior Energy Analyst and Strategic Relationship Manager for Offshore Wind.

Increased offshore wind ambitions However, UK offshore wind supply chains still require help in the face of pressures to cut costs, invest in new projects and meet new emissions reduction measures for the lifetime of a project. There are also delays in the UK, Denmark and the US due to legislation gaps, as projects and pipelines upscale. This transition is “not going to be easy”, says Juergens; “patience and perseverance are needed”. In Asia, offshore wind opportunities are most attractive in Taiwan, Japan and South Korea, she adds. Taiwan is reinvigorating local marine industries and port infrastructure for offshore wind, with UKEF having supported four major offshore wind projects in Taiwan: a £230m project finance guarantee for Formosa 2 in 2019, a £75.4m project finance guarantee for Changfand and Xidao in 2020, and a £200m buyer credit guarantee to help finance the Greater Changhua 1 Offshore Wind Farm in 2021.

US $7.3bn

US $20.5bn

Blue hydrogen

Floating offshore wind

US $170bn + Five technologies propelling the energy transition

US $94.9bn Energy storage

Estimated global CAPEX (US$bn) on energy transition (ET) projects to 2026

US $23.2bn CCS

US $39.8bn Green hydrogen

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Special report: Clean energy exports

Hydrogen and energy storage dominate clean energy opportunities

$170 US bn+ MARCH

2021 of CAPEX expected on ET projects announced to March 2021, with the likelihood of this figure growing significantly through to 2030

2020 saw unprecedented growth in the number of ET projects announcements, dominated by hydrogen and energy storage

1,000% New hydrogen projects up more than 1,000%. New energy storage projects up more than 200% on 2019 figures

140% In 2021, the number of green hydrogen developments is expected to increase by more than 140%, based on Q1 activity

Floating offshore wind in South Korea and the Mediterranean is also attractive for UK supply chain companies; Italy, Spain, and France all have pilot projects in the works. UK companies “should start forming relationships and establish opportunities now”, advises Juergens.

Hydrogen on the horizon For UK sectors that are more challenging to decarbonise – such as steel, iron, cement, heavy long-haul vehicles, aviation, maritime and railways transportation – hydrogen can be used, says Seyed Mohsen Razavi, Energy Technology Analyst at the Gas Exporting Countries Forum. In the pursuit of zerocarbon energy systems, hydrogen’s role “is becoming more notable”, with project pipelines in place, advanced technologies and national strategies (notably the EU hydrogen strategy and US roadmaps) being published, says Razavi. “The hydrogen era will materialise earlier than 2050 targets.” “It could be argued that the pandemic helped drive the hydrogen (and CCUS) markets”, says Joanne Sivanathan, EIC Hydrogen and CCUS Energy Analyst. As climate goals are prioritised, with subsequent funding allocated, large hydrogen projects in Australia, Germany, the Netherlands, Saudi Arabia and China will be operational by 2024.

Solar shines bright For UK onshore solar supply chain companies, the most attractive transitioning markets are sub-Saharan Africa, South East Asia and Latin America, says EIC Renewables Energy Analyst Sharanya Kumaramurthy. This mirrors UKEF’s 2020 support of solar

projects in Zambia and Ghana; it loaned £244m to support 108 solar-powered rural healthcare clinics and three hospitals in Zambia, and it loaned £27m to Ghana’s government to help Aqua Africa use solar power to sterilise drinking water. In SE Asian and Latin American countries that are setting net-zero targets, there is “huge anticipation” around how to step away from coal and progress to solar and onshore wind, says Kumaramurthy.

COP26: a golden opportunity The main driver for these global shifts in renewables support, decarbonisation funding and fossil fuel export changes are the COP climate agreements, says Danabalan. With policy, investment and political backing already being shaped by international climate agreements, the crucial event that will lead international energy export policy, funding, and support for the next decade is COP26, which is being held in Glasgow this November. Global climate policy – much influenced and decided at COP26 – will “drive the energy transition market” says Sivanathan, with climate recovery funds being allocated in the UK, EU and US. For UK energy export companies to not just survive industry changes, but succeed through them, global collaboration, knowledge sharing, scaling up, adequate safety and pricing regulations, “and a full public and private commitment to the energy transition” is required by the industry, says Sivanathan. The UK’s time hosting COP26 is a massive opportunity for UK export companies to plan and lead the energy transition. An opportunity, says Broadley, that should be taken “by the scruff of the neck!”

Markets to watch Category

Countries

Projects

Hydrogen

The Netherlands Australia US Global total

24 4 ● 20 ● 26 1 ● 25 ● 13 7 ● 6● 164 25 ● 139 ●

CCS

UK US The Netherlands Global total

Energy storage

US UK Australia Global total

82 57 37 260

Floating offshore wind

Spain South Korea UK Global total

10 9 9 61

13 11 6 49

(956MW) (4.9GW) (2.1MW) (27.65GW) Source: EIC DataStream 2021–2030

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AssetMap

EICAssetMap

Australasia Join us

Asset-tracking database b|_ ƐķƏƏƏ or;u-ঞom-Ѵ assets for energy O&M orrou| mbঞ;v Ѵ- m1_;v in Australasia EICAssetMap now maps all key energy assets in all energy sectors across the Australasia 1omঞm;m|ķ bm1Ѵ 7bm] v|u-Ѵb-ķ ; ,;-Ѵ-m7ķ -r - ; bm;- -m7 $blou ;v|;ĺ -bm -11;vv |o -vv;| bm=oul-ঞom om ƔƐƐ C;Ѵ7vķ Ɩѵ _ 7uoro ;u rѴ-m|v ruo7 1bm] ƐƐ )ķ ƐƔƕ 1om ;mঞom-Ѵ ro ;u rѴ-m|v b|_ - 1ol0bm;7 1-r-1b| o= Ɣƒ )ķ ƖƏ bm7 =-ulv b|_ - 1-r-1b| o= Ѷĺƒ )ķ -m7 ƒƕ voѴ-u =-ulv ruo7 1bm] ƑĺƖ )ĺ olr-mb;v 1-m ]uo |_;bu 0 vbm;vv 0 b7;mঞ= bm] -m7 ;m]-]bm] b|_ h; |-u];|v bm |_; or;u-|ouķ 7; ;Ѵor;u -m7 ş 1om|u-1|ou 1oll mb| bm v|u-Ѵ-vb- b|_ |_bv = ѴѴ bm|;u-1ঞ ; map-based database.

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Energy Transition Hydrogen

Europe leads the way in

clean hydrogen

Europe leads the way in the research and development of viable hydrogen technologies, including innovative electrolysers that can help achieve a carbon-neutral future, writes Bart Biebuyck at the Fuel Cells and Hydrogen Joint Undertaking (FCH JU)

T

he European Union is committed to achieving a more sustainable economy and reaching carbon neutrality by 2050. If these goals are to be reached, clean and green hydrogen technologies and applications will have a key role to play in Europe’s energy mix by allowing the penetration of renewables in hard to abate sectors. Much work is ongoing to lay the groundwork for a hydrogen-powered future. The EU Hydrogen Strategy, published in July 2020, recognises that clean and green hydrogen will be central to decarbonising the EU economy cost-effectively and sustainably. Through this strategy, Europe is exploring actions that support the production and use of hydrogen, particularly renewable hydrogen. A strategy is one approach. But for work to progress, players from across the economy must unite to drive change. The European Clean Hydrogen Alliance was launched at the same time as the strategy. Its role is to establish an investment agenda and support the scaling up of the hydrogen value chain across Europe. The Alliance brings industry, national and local public authorities, civil society and other stakeholders together.

Investing in a new partnership Meanwhile, things are changing for the FCH JU. Established in 2008, the public-private partnership has helped kick-start Europe’s hydrogen economy by investing €1bn (£867m) in 285 research and demonstration projects. The European Commission is now looking to drive these achievements through a publicprivate initiative. Working with the European Commission, the proposed Clean Hydrogen Partnership will accelerate the development and deployment of the European value chain for clean hydrogen technologies. These major investments will be in line with the EU policies, including the European Green Deal. The EU is expected to approve the Clean Hydrogen Partnership this autumn. Realising hydrogen power generation across Europe is a specific aim both now and in the future. The goal is to install 6GW of electrolysers in the EU by 2024, and 40GW by 2030. These electrolysers will be fed by renewable resources to generate 10m tonnes of green hydrogen by 2030. This clean end product can be used by industry, transport and other carbon-hungry sectors, helping to slash Europe’s greenhouse gas emissions.

IMAGE: VOESTALPINE

(Right) The H2FUTURE pilot plant in Austria is one of the largest electrolysis plants for the production of green hydrogen

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Hydrogen: Energy Transition

Europe ahead in race for hydrogen

Denmark 6 projects

The hydrogen economy is finally taking off and Europe is emerging as the clear leader in planned installations. Of the 208 global hydrogen projects being tracked by EICDataStream, 54% of them – 112 projects – are in Europe. As of April 2021, there are currently 28 active hydrogen projects and a further 79 proposed for future development. If all planned projects were realised, 86% of them will be green hydrogen developments.

Norway 6 projects

United Kingdom 20 projects

Sweden 3 projects

Countries with less than 3 projects ● Finland ● Poland ● Portugal ● Russia

Netherlands 25 projects

Belgium 3 projects

Spain 9 projects

Key:

Active

Future

France 7 projects

Source: EICDataStream

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Germany 16 projects

Italy 3 projects

Austria 3 projects

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Hydrogen: Energy Transition

We envisage the roll-out of hydrogen technologies and infrastructure will take place in ‘hydrogen valleys’. These self-contained areas – such as a city, region or industrial cluster – are in the process of developing hydrogen technology. The most complete hydrogen valleys cover the entire hydrogen supply chain from its production to final use for the benefit of manufacturing, transport and energy storage. For example, the first hydrogen valley was created in the northern Netherlands. Spread over six locations, it connects hydrogen with the region’s abundant solar and wind energy resources and is demonstrating 11 more applications from different sectors.

The EU targets 6GW of electrolysers in the EU by 2024 and 40GW by 2030. These electrolysers will be fed by renewable resources to generate 10m tonnes of green hydrogen by 2030 (Below) The GrInHy II project’s 720kW electrolyser in Germany is the largest demonstration high-temperature electrolyser in the world

Innovative electrolyser technologies

Looking to grow Energy Exports The EIC can help

operation before summer 2021, the plant will produce 1,300 tonnes of hydrogen per year. A final investment decision for Refhyne II – a 100MW electrolysis plant, scaling up from an existing 10MW plant – is due this year, and production could start by the end of 2025.

Find out more about Our investments have hydrogen export enabled many innovative opportunities in Europe ideas to evolve into solid, and other key markets practical advancements in at EEC 2021: www. electrolyser technologies the-eic.com/Events/ across the EU, most notably EnergyExportsConference in Germany, the Netherlands and Austria. It is fair to say that Europe has developed unrivalled technological leadership in electrolyser The Netherlands development. The MultiPLHY project at Neste’s biorefinery in Rotterdam brings together ENGIE, Neste, CEA, Paul Wurth and Sunfire. Marking the first Germany demonstration of a HTE in an industrial refining The GrInHy and GrInHy II projects based at process, the project has a nominal power input Salzgitter’s steel plant in Germany have built of 2.6MW and a hydrogen production capacity the largest demonstration high-temperature of 60kg/hr. It is estimated that by the end of electrolysers (HTE) in the world – 150kW and 2024, around 960 tonnes of renewable hydrogen 720kW, respectively. Building on the success will be produced, reducing greenhouse gas of the initial project, the GrInHy II prototype emissions by an estimated 8,000 tonnes. will be fully integrated into Salzgitter’s Recently started, the Djewels project is steelmaking operations and will run on steam owned and operated by Dutch gas grid from waste heat of the steel production. operator Gasunie and local chemicals Sunfire’s HTE electrolyser is expected to be in company Nouryon. It will utilise an innovative operation for at least 13,000 hours by the end high-pressure, high-performance alkaline of 2022, producing a total of around 100 electrolyser built by French manufacturer tonnes of green hydrogen from renewable McPhy. The 20MW electrolyser will produce electricity. These projects have improved the 3,000 tonnes of green hydrogen and save robustness and durability of HTE technology 27,000 tonnes of CO2 emissions per year. In at the cell and stack level. Further developments are being made in the tandem, a sister project called HEAVENN is Refhyne project, which will soon host the adding 40MW of electrolysis capacity to a world’s largest proton exchange membrane local hydrogen valley. (PEM) electrolyser. With a power of 10MW, ITM Power’s electrolysis technology will feed Austria green hydrogen into Shell’s 140,000 bbl/d Meanwhile, the H2FUTURE pilot plant is in full Rheinland refinery in Germany. Due to start operation. The project team has constructed one of the largest electrolysis plants for the production of green hydrogen. The 6MW Siemens Silyzer 300 PEM electrolyser, installed at steel maker Voestalpine’s site in Linz, splits water molecules into hydrogen and oxygen using renewable electricity provided by Austrian utility Verbund. The hydrogen will feed directly into the plant’s internal gas network, enabling the testing and use of hydrogen in steel production. These are just a handful of projects demonstrating great potential to help decarbonise European industry by harnessing the clean, green power of hydrogen. By Bart Biebuyck, Executive Director, Fuel Cells and Hydrogen Joint Undertaking

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Renewables Floating offshore wind

Globalising floating wind power Last year, Principle Power commissioned the 25MW WindFloat Atlantic (WFA) floating wind farm off Portugal – continental Europe’s first multi-unit floating array and the first project to obtain bank finance. It was a key milestone for the company, as well as the industry. The project serves as a springboard for the expansion of floating wind globally. Operations experience from this project is already being fed back into our design, allowing us to increase competitiveness and refine our procedures and processes for the much bigger projects ahead. We are currently supporting our customer Cobra Wind International Ltd to finalise the construction of the 50MW Kincardine project in Scotland, which will be the world’s largest floating wind farm when it comes online this spring. We are also finalising the detailed design for the 30MW Golfe de Lion project in the French Mediterranean, which will be the first floating project to use wind turbines with a rated capacity exceeding 10MW. Beyond these first small projects, we support customers such as Ocean Winds, Aker Offshore Winds, Simply Blue Energy and

Floating offshore wind will play a vital role in the energy transition globally, but it can only reach its full potential with the committed and wideranging support of governments, writes Aaron Smith, CCO at Principle Power – the industry-leading provider of floating wind platform technology, the WindFloat® Total, with several commercial-scale projects ranging between 100 and 1,000MW due online by midway through this decade. It is critical to note that the speed of growth for the floating wind sector in any market is dependent on political and regulatory factors. These create the volume and visibility required for the industry to invest with confidence, driving the development of the supply chain and achieving cost reduction. The willingness of governments to make sites available to project developers is key for enabling projects, and the slow pace at which governments are awarding sites has been a restricting factor. We see immense potential in the Asia Pacific region as governments increasingly look to FLOW energy to expand their

portfolios of domestic renewable energy. Although the market is nascent, developers in Japan, South Korea, Australia, China, Vietnam and Taiwan are advancing projects.

Unlocking economic potential Industry bodies, including EIC, showcase the potential opportunities that the sector can bring to local job creation and revitalising coastal industry. According to some, if the UK government adapts its support mechanism to help promote the industry, floating wind power could be built into an annual market worth tens of billions of pounds by 2050. We see that this potential economic growth can be replicated in other markets, especially where national plans aim to foster local content and jobs. Principle Power is entering into a new phase in its development as a company, and the floating wind industry is becoming increasingly dynamic as the market prepares for growth. As a market leader, we continue our work to make floating wind projects happen in every major global maritime region as quickly and competitively as possible. We intend to globalise FLOW and enable countries to unlock the massive potential of this renewable energy resource, to help address the threat that climate change presents to our planet. By Aaron Smith, Chief Commercial Officer, Principle Power

Harnessing the potential for floating offshore wind

IMAGES: XXXXXXXX

W

ith more than 80% of the global offshore wind resource in waters over 40m deep, floating offshore wind (FLOW) is emerging as a solution to unlock an enormous amount of previously inaccessible renewable energy resource. The Carbon Trust Joint Industry Project estimates that the sector will grow to 10GW by 2030 and with an upside potential of 120GW by 2040.

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Floating offshore wind: Renewables

Japan: market to watch

W (Left) The WindFloat Atlantic project has three 8.4MW wind turbines installed off the coast of Viana do Castelo, Portugal, at a sea depth of 100m

ith only one month to go before the winner of its first-ever floating wind farm auction is announced, all eyes are on Japan as the nation kickstarts its nascent FLOW industry. Japan is looking to rapidly scale up its offshore wind industry from almost nothing today to 10GW by 2030 and 45GW in 2040 – and its breezy shores and deep waters are attracting major international developers. Despite its small land area, Japan is the world’s sixth-largest maritime nation by the size of its exclusive economic zone. The country has nearshore deep waters, with 80% of its offshore wind potential located in sea depths of more than 100m. This makes floating technology a more viable option than bottom-fixed foundations. FLOW finally looks set to take off, says Rassim Hariz, Head of Business Development and Principal Consultant at Offshore Wind Consultants. “According to the Japan Wind Power Association, 40% of the 10GW by 2030 interim target will be installed through the development of FLOW. “Although the country has major plans for floating wind tied to its net-zero target by 2050, the government of Japan recognises that it must further develop its bottom-fixed wind industry before floating wind can accelerate beyond pilot projects.” Japan held its first auction for the development of a floating wind farm off the coast of Goto City in the southern prefecture of Nagasaki in June 2020. The proposed wind farm will have a minimum capacity of 16.8MW with a feed-in tariff of 34 US cents/

Japan targets 10GW of offshore wind capacity by 2030, of which 40% will be FLOW

Opportunities

KWh. The winner is due to be selected in June 2021. Local players venturing into the floating segment include Toda Corporation, Marubeni and Acacia Renewables, which was acquired by Iberdrola in September 2020. In November 2020, Japan officially launched its Round 1 tender for bottomfixed offshore wind farms in four designated areas in its waters – Noshiro and Yurihinjo (North and South) off the Akita prefecture as well as Choshi City, off the Chiba Prefecture. The closing date to submit proposals is 27 May 2021. For international investors, Hariz says investing in Japan requires having strong local and national partners. “Since 2018, major energy players including Ørsted, Equinor, CIP, RWE and Iberdrola have teamed up with Japanese utility companies and conglomerates and are gearing up to bid for the auctions.” Auction results are expected to be announced in October or November this year. Nine sites have been selected by Japanese authorities in different regions and are in various stages of development. Subsequent projects are expected to be bottomfixed wind farms relatively close to shore, with larger-scale floating wind projects anticipated in due course. The Japanese Wind Power Association expects FLOW will be in full swing after 2030, with more than 1GW to be introduced every year by 2040.

IMAGES: PRINCIPLE POWER

OUT EIC SOON I REPNSIGH GLO ORT T OFF BAL S WINHORE D

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For more information on offshore wind projects in the region, sign up to attend EEC 2021: www.the-eic.com/ Events/EnergyExportsConference

Planning Project management Marine co-ordination Installation

Challenges Language barriers and cultural differences Lack of transparency in procurement and project timelines Protective market – foreign companies are advised to partner with local entities Lengthy permitting process

Based on announced global FLOW developments, EIC estimates that by 2030 up to 51% of new floating wind capacity (27.65GW) will come from Asia-Pacific countries

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Oil and Gas Petronas

PETRONAS is the first Southeast Asian energy company to commit to net-zero carbon emissions by 2050. Why is PETRONAS aiming for this and how will net zero be achieved? PETRONAS’s sustainable development journey started in 2001. Our declaration to achieve net-zero carbon emissions by 2050 strengthens our corporate responsibility commitment to provide affordable, reliable energy while balancing climate change. We also believe this is an essential step to future-proof the organisation. It aligns with our Statement of Purpose and our threepronged strategy of maximising our cash generators, expanding our core business and stepping out to new energy with a solid commitment to sustainability. Our target of capping greenhouse gas (GHG) emissions by 49.5m tonnes of CO2 equivalent (tCO2e) by 2024, announced in 2019, set the move to gradually reduce more emissions to meet phased targets up to net zero. Our continuous emission reduction in the short term will be supported by increasing renewable energy installed capacity by 2024. We adopt life cycle thinking to appraise our environmental footprint across the value chain and create new,

PETRONAS is progressively searching for solutions partners inclusive opportunities that contribute towards a just transition where we operate. PETRONAS will continue leveraging technology in its strategy. We also plan to use carbon capture and storage (CCS) in addition to other technology solutions, including energy storage, electrification of gas turbines and wind turbines. These are in the pipeline for deployment starting 2025. To complement this, we have identified forest-based carbon offsets as a viable solution to push us further towards our 2050 goal. This holistic approach will be steered by our four sustainability lenses: continued value creation, safeguarding the environment, positive social impact, and responsible governance. We believe this will enable us to create new, inclusive opportunities that

contribute to just socio-economic development. We have also prioritised seven United Nations Sustainable Development Goals – those where we believe we can make the greatest impact – to give us more focus. Can you tell us a little more about the technologies PETRONAS is deploying to decarbonise its oil and gas operations? We continually carry out R&D for sustainable development; moving forward, we are shifting from grey to blue to green hydrogen technologies. To decarbonise oil and gas operations, we have incorporated technologies such as carbon capture, utilisation and storage (CCUS), automation, robotics and offshore low wind speed wind turbines through our Facilities of Future programme. We are also embarking on the second phase of a sequestration project at our Kasawari gas field – a major step towards sustainable development. It will be our first complete offshore CCS project and the world’s largest, based on the amount of CO2 injected into the offshore site per year. The project will feature CCS technologies to separate the CO2 gas and inject it into the

Dr Nasir Haji Darman, Chief Technology Officer at Malaysian state energy giant PETRONAS, talks to Energy Focus about net-zero aspirations, decarbonising oil and gas operations, and supply chain innovation

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Petronas : Oil and Gas

IMAGES: PETRONAS

(Left) Dr Nasir Haji Darman, PETRONAS Chief Technology Officer

reservoir for permanent storage. Carbon capture technologies include miniatured cryogenic distillation (Cryomin) and membrane for bulk CO2 removal range. We have also qualified potential CO2 storage sites, providing solutions for permanent CO2 sequestration. Subsurface and well technologies will include coupled modelling for CO2 storage application, fibre optic, and geopolymer cement for high CO2 wells, ensuring CO2 injection performance and monitoring of CO2 sequestration. We have also developed CO2 utilisation technologies, converting CO2 into high-value products such as precipitated calcium carbonate, high purity methanol and other minerals. Our Facilities of Future programme paves the way for a revolutionised operating philosophy by leveraging subsea factory technologies, digitalisation, automation, robotics, advanced material and machine learning. Robotic operations free our workers from hazardous environments and physically demanding tasks, minimise our carbon footprint, and bring costs down by a significant margin. Looking ahead, the ultimate form of an unmanned operation – the subsea factory – will soon be a reality. PETRONAS has also embarked on advanced materials, turning refinery waste into high-value graphene. In pursuit of cleaner energy, we have introduced offshore low wind speed wind turbines for hybrid offshore power generation, offering lower carbon emissions

With our aspiration to achieve net-zero carbon emissions by 2050, we intend to continue to intensify our efforts to reduce GHG emissions of 49.5m tCO2e by 2024 due to the reduction in the number of offshore gas turbine generators, lower maintenance costs and additional gas revenues. What other low-carbon solutions are you planning to deploy in the long term? PETRONAS’s strong sense of appreciation for resources has instigated projects on

Carbon capture, utilisation and storage CCUS will play a role in PETRONAS’s transition to net zero by 2050 CO2 separation and sequestration technologies for cheaper CO2 management

Onshore CO2 utilisation plant

Central processing platform Wellhead platform

Central processing platform

CO2 to be stored

Storage field

CO2 to be monetised

Gas field

Converted products: methanol, ethanol, urea, ammonia, lipids, precipitated calcium carbonate (PCC)

biomass-to-chemicals, bio-based speciality surfactants and plant-based aviation fuel from crude algae oil. We continue with our research into fuels and lubricants – looking at novel additives for fuels and ionic liquid and graphene for future mobility – and thermal management fluids for energy storage. Our hydrogen business is working towards achieving competitive cost in production. We have built our green hydrogen production testing facility, complete with an advanced electrolyser that we developed to enable efficient and cost-effective green hydrogen production. The system is designed to deliver about 50kg of clean hydrogen per day. Combined with competitive clean electricity, hydrogen will be the new source of fuel in the future. What is PETRONAS looking for from supply chain companies to help decarbonise its oil and gas operations? As already mentioned, with our aspiration to achieve net-zero carbon emissions by 2050, we intend to continue to intensify our efforts to reduce GHG emissions of 49.5m tCO2e by 2024. This can be done via continuous improvements in operational excellence, through technology such as automation and robotics, and by deploying innovative operations and technologies. In addressing the decarbonisation of our supply chain, it is pivotal for companies within this industry to unlock value and deliver sustainable solutions for our industry. What advice can you give to UK suppliers interested in working with PETRONAS? PETRONAS is progressively searching for solutions partners. Foreign companies have two options be to be licensed and registered with us: i. By appointing a local company as an agent ii. By incorporating a local joint-venture company with a local partner to perform business operations in Malaysia. The application must comply with the requirements as stipulated in the Licensing and Registration General Guidelines and the general requirements for licensing and registration. For further information, please visit PETRONAS Be Our Partner page at www.petronas.com/be-our-partner. www.the-eic.com | energyfocus

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Oil and Gas Scope 3 emissions

L

eading up to the UN climate change summit in Glasgow this November, the unequivocal focus is on accelerating the shift towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change. Bechtel shares this urgency. As the world seeks efficient ways to transition to alternative energy sources, we provide customers with innovative solutions to contribute to a clean energy future while promoting sustainable supply chain practices.

A sustainable supply chain As an engineering, procurement and construction (EPC) contractor, we engage with customers to understand their evolving needs for identifying, tracking and reporting their progress towards meeting their greenhouse gas (GHG) emission reduction targets. Many of our customers have announced commitments to reduce their direct emissions (Scope 1) and indirect emissions from the generation of purchased energy (Scope 2), as well as indirect emissions that occur in their value chain (Scope 3). Similarly, as part of our customers’ supply chain, Bechtel is committed to understanding and managing Scope 1 and 2 GHG emissions and instilling sustainability across the supply chain. We are working with suppliers to understand, collect and report their emissions, and incorporate sustainability, specifically GHG emissions, into the criteria of the request for quotation and the evaluation process.

IMAGE: SHUTTERSTOCK

Measuring leads to managing

With companies increasingly required to report Scope 3 emissions from their value chain under the recognised GHG Protocol, suppliers will need an understanding of their emissions and carbon footprint, and must demonstrate decarbonisation initiatives. Emerging evaluation criteria will score companies based on demonstrated carbon footprint reductions and/or targets to reduce. We encourage companies to analyse their entire supply chain and own their carbon footprint to understand the principal carbon emitters and how these can be reduced now or eliminated in the future. While this will be different for all companies, the crucial point is to commit to considering a carbon reduction model that will create further opportunities in existing and emerging low-carbon markets.

Increased opportunities We recognise that product origin is becoming a greater consideration (raw material production, fabrication methods, transportation, etc), and that there has been, to some degree, a contraction of previous ‘global sourcing’ initiatives. Increasingly, compliance with local content regulations is a precondition for mobilising the financing of low-carbon projects, which will increase local supply chain opportunities. We also continue to see an opportunity for the UK supply chain in existing markets (including petrochemicals and LNG) and acknowledge that these markets will remain essential as companies rely on success in these traditional energy sectors to help finance change. Decarbonisation technology solutions offered by the supply chain could provide competitive advantages. However, for our EPC projects, we need to be mindful of the cost implications associated with optimised, decarbonising energy-sourcing strategies and respective supply chain offerings. Companies that supply the oil and gas industry will diversify business models to evolve and adapt to navigate the energy transition, but their competitive environment

We intend to deliver a transparent and traceable supply chain

As we progress, we are committed to achieving greater supply chain transparency in order to encourage emissions accounting and reporting and help drive sustainability activities across our supplier organisations. Ultimately, we plan to move beyond measuring emissions and establish GHG emission reduction goals for our supply chain. Why? Because for EPC projects, the supply chain is a significant contributor to the overall carbon footprint during the construction of our customer’s facilities.

Greening the supply chain Andrew Cuniah at Bechtel on Scope 3 emissions and driving sustainability across the company’s supply chain may change as new companies come to market with new technology offerings.

Innovation will be key We recognise the importance of supplier innovation to support the decarbonisation of our customers’ facilities, and look forward to learning more from the supply chain. Suppliers can contribute to Bechtel’s value proposition by telling our supply chain management teams, led by Gerry O’Connor in Houston and myself in London, what they are doing to reduce their carbon footprint. For example, in our Bechtel Equipment Organization group, we are already looking at areas that support lower emission, electrification, products that require less power, and increasing recycling. Waste reduction at our sites continues to be an ongoing initiative. Moving forward, we intend to deliver a transparent and traceable supply chain. Only by better understanding their advancements towards GHG protocols can we achieve decarbonisation goals. By Andrew Cuniah, Supply Chain Operations Manager – London, Bechtel www.the-eic.com | energyfocus

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Power Decarbonising power (Right) Siemens Energy will dustrial gas upgrade an SGT-400 industrial ctricity and turbine to generate electricity d hydrogen thermal energy with stored ustrial-scale and show an industrial-scale wer solution Power-to-H2-to-Power

T

he dictionary defines ‘transition’ as a process ss of changing from one state ate or condition to another.. But in 2019, the Oxford English glish Dictionary attributed d another meaning to this word as ‘a name for a movement advocating a shift from dependency on fossil fuels to sustainable, ainable, self-sufficient living in communities’. es’. For us, the energy transition is just ust that: moving from fossil-based fuels to clean clean, low and zero-carbon replacements. And, as the original definition suggests, we have a time period in which to complete this process. Climate change requires the decarbonisation of economic systems worldwide. This affects the energy industry, accounting for around 40% of global carbon dioxide emissions and other sectors such as transport and industry. Renewable energy cannot meet this goal alone – if there is no wind, there is no power, and if there is too much wind, grids can become overloaded. Additionally, some sectors – such as the steel industry, long-haul transport, ships and planes – are difficult to electrify. It needs solutions that can store, transport and convert energy from solar and wind power. Green hydrogen can be the key to minimising CO2 emissions across sectors and achieving climate neutrality in the long term. Green hydrogen, produced by electrolysis of water using electricity from renewable energy sources, is the end goal, but so far, production is too expensive and complex for large-scale use. Alongside green hydrogen, industry also uses grey and blue hydrogen. Grey hydrogen currently accounts for 90% of the hydrogen used worldwide and is produced from fossil fuels, resulting in CO2 emissions. Blue hydrogen is also produced from natural gas, but the resulting CO2 is captured and stored and does not end up in the atmosphere.

IMAGE: SIEMENS ENERGY

Making gas turbines hydrogen-compatible While gas-fired power plants will be needed for security of supply in the long term on the road to decarbonisation, we’re working to make sure they’re ready for the future fuels that will be used to power them. We are developing our gas turbines to operate using up to 100% hydrogen by 2030. This will make them an integral part of a climate-neutral energy system and set our customers on track for the new hydrogen

The power of hydrogen Professor Armin Schnettler at Siemens Energy on paving the way for hydrogen-based energy systems economy, as our existing gas power plants can be retrofitted for hydrogen operation without replacing core components. We’re delighted that we are part of the world’s first integrated Power-to-X-to-Power hydrogen demonstration project. HYFLEXPOWER, based in France, will demonstrate how green hydrogen from electrolysis can serve as a flexible means of storing energy which can then be used to power a high-power Siemens Energy industrial gas turbine. During two demonstration campaigns, the facility will be powered by a mix of natural gas and hydrogen, ultimately aiming for up to 100% hydrogen operation. This would save up to 65,000 tons of CO2 per year for an industrial gas turbine (such as an SGT-400) at baseload operation. However, while these lighthouse projects provide the operational experience in practice, to truly start the hydrogen market

Figure 1: Interlocking parts Financing for clean hydrogen projects Offtake

Regulation

Green energy

Technology

Financing

we need to see government policies and frameworks implemented to meet the ambitious global climate reduction targets: renewable power must become cheaper, and CO2 more expensive.

The future of hydrogen Green hydrogen cannot replace fossil fuels tomorrow – there is a lot more work needed to reach that scale. Nevertheless, it offers enormous potential for reducing climatedamaging emissions in all sectors through sector coupling with Power-to-X technologies. To achieve the UN’s energy-related Sustainable Development Goals, 7.92 megatons of hydrogen would have to be produced globally in 2030, with low CO2 emissions. In 2019, however, the International Energy Agency’s Hydrogen Tracking Report suggested only 0.36 megatons per year had been produced. For the sector to grow at the speed and scale needed to meet the decarbonisation challenge, public policies must create the planning and investment security needed for developers, and they must have access to clean energy to enable green hydrogen growth (see Figure 1). Interest in hydrogen is growing, with demand increasing rapidly. It is clear the next significant transformation in the energy transition will be based on the hydrogen economy. By Professor Armin Schnettler, Executive Vice President New Energy Business, Siemens Energy www.the-eic.com | energyfocus

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Nuclear UAE (Right) Ali Al Zaabi (Below) The Barakah nuclear power plant, one of the largest in the world

Nuclear

opportunities

in the UAE

As the UAE plugs in its first nuclear unit for commercial operation, ENEC’s Chief Operating Officer Ali Al Zaabi talks to Energy Focus about the huge supply chain opportunities on offer at the Barakah nuclear power plant

IMAGE: ENEC

How is the nuclear plant progressing? The UAE Peaceful Nuclear Energy Programme and its flagship project, the Barakah nuclear power plant, are key parts of the UAE Energy Strategy 2050. The first of its four reactors is now commercially operating and the second is preparing for start-up, while Units 3 and 4 are in the final stages of construction and commissioning. The Emirates Nuclear Energy Corporation (ENEC) plays a significant role in achieving strategic objectives by producing clean electricity, driving sustainability and developing a solid local nuclear energy industrial sector. Its Barakah plant has created a new, prestigious and niche sector. It is now a key economic driver and a substantial energy contributor for the nation, while also meaningfully reducing UAE’s carbon emissions and footprint. The Barakah plant has opened up business opportunities across the sector’s supply chain, from design to construction and operations to maintenance. It is also creating new job opportunities in all of these areas, as well as in the research and educational fields. What is ENEC looking for in its supply chain? The four units of the Barakah plant will operate for at least 60 years, creating numerous opportunities for companies to support the high-quality operations and maintenance of the plant in accordance with the highest international standards. ENEC’s dedicated Business and Industrial Development Team and the Quality

Assurance team of Nawah Energy Company (ENEC’s operations and maintenance subsidiary) have worked with UAE companies including Emirates Steel, National Cement, Dubai Cable Company (DUCAB), National Marine Dredging Company, Borouge, Western Bainoona Group and Hilalco to raise their standards to meet the stringent regulatory requirements. This has not only resulted in the awarding of contracts to local companies, but also created opportunities for these suppliers to broaden their customer base by entering the international market for supplying goods and services to the global nuclear energy industry. To date, more than 2,000 local companies supplying products and services to the Barakah plant have been awarded contracts totalling US$4.8bn. And it is not just local companies; ENEC has contracts with companies worldwide for supplying equipment and parts through to consultancy and other services. What does ENEC need from the UK supply chain? The UK has one of the most established industries in nuclear science and technology, and is committed to nuclear energy as a source of clean electricity. Building on this expertise, we are always open to working with companies and organisations that bring value to our operations, support our intellectual capability development initiatives or enable the continued development of our highly-skilled Emirati workforce. To ensure the operations and maintenance activities of the Barakah plant, ENEC will be

looking for competent vendors who have the technical capabilities in the following fields: Engineering and technical services, Waste treatment and disposal Maintenance support and specialised services Outage support and services Operation spare parts (mechanical, electrical and ICT items) Laboratories and nuclear quality assurance programme consultants ENEC is always looking to partner with the best companies to support the international standards the Barakah plant is operated in line with, as well as identifying opportunities for partnership in R&D and knowledge transfer. How can UK companies become involved with ENEC? Nuclear energy and technology present the possibility for the research and development of new technologies, and experienced companies and research institutes can be involved. The possibilities for cooperation are endless, and we always welcome support for our operations as we strive to deliver clean electricity and power the UAE’s engine of growth. The ENEC Enterprise Supplier Registration process is centralised through the ENEC Commercial Directory system. The Directory provides a single online location where suppliers can register with ENEC and its subsidiary companies in a fast and efficient manner to work with ENEC, and its subsidiaries, Nawah Energy Company and Barakah One Company. UK companies looking to expand their nuclear energy offerings are encouraged to visit www.enec.gov.ae for more information and access to the supplier registration section. For more information on nuclear opportunities in the UAE, please contact ryan.mcpherson@the-eic.com www.the-eic.com | energyfocus

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EIC Member Focus T12 Consultancy

MY BUSINESS

Graham Melroy T12 Consultancy Tell us about a day in the life of T12? Days in T12 are rarely the same, which is part of the appeal and renews my motivation daily. Some days, business needs dictate a specific focus on marketing and business development areas, involving meetings and discussions with many new strategic partners. Other times, the focus is more internal, looking at the organisation, strategy and key objectives for the business. And this is all before we even get down to the day job of managing engineering design and delivery for our clients. What does T12 do? T12 is an engineering consultancy, but we believe we offer more than that. Our clients recognise the value of bolt-on engineering. What does that mean? Our clients typically want to grow their engineering capability, bring in external expertise and technical support, or use us as a strategic engineering partner to support their business in tenders and projects. T12 provides a tailored bolt-on engineering service to support their business objectives. How has T12 handled the COVID-19 situation, and what have been the complications? The crisis on a day-to-day level has had little effect on T12 as a business. We have always supported remote working and the systems and practices that go along with that. Regular communication, strong collaborative relationships, and tools such as video conferences will always remain at the core of our operating model and beliefs. From an outward-looking perspective, there has been no face-to-face networking, no conferences, no industry meetups. On a more strategic level, COVID-19 put the brakes on the economy in general. It made many companies cancel spending and push

open an office? Is this a business strategy or a response to COVID-19? No, we don’t plan on opening a physical office. Remote working has been central to the T12 business from the outset. We saw its inherent value in attracting and maintaining talent, reducing overhead costs, and supporting and overseeing local markets within the UK in a more effective manner.

Project Director Graham Melroy takes Energy Focus behind the scenes at T12 Consultancy projects to the right, meaning new opportunities were at a premium during the past year. However, with all the challenges, there were also opportunities. At T12, we took the time to build a sustainable plan for the anticipated recovery, which we are pleased to say is beginning to yield results. How have you been able to maintain good mental health and wellbeing during the pandemic? Maintaining good mental health can vary from person to person. For me, it’s doing simple things such as taking time out for yourself and your family, which can be challenging when working from home. I try to do the simple things and keep to a routine. I make sure I go out for a decent walk every day and a good long walk at least once a week, even with our great British weather. With your commitment to remote working, does that mean there are no plans to

What does the future hold for T12? I believe our strategic planning has been very effective, and I am confident our continued focus and vigour will stand us in good stead as we look to deliver value to our clients and grow towards the end of the year and into 2022. At T12, our focus is on sustainable growth, and we like to build lasting relationships with our clients; this can take time and, in some cases, feels slow; however, this detailed work in the early days does pay off in the long run. What opportunities do you see at present in energy transition sectors and new technologies? The energy sector is a fantastic place to be right now. There is just so much going on, lots of new technologies to explore, and so many exciting and innovative technologies emerging and becoming established – with even more on the horizon. At present, the energy industry is driven by traditional energies such as nuclear and gas, with coal all but scrubbed from the energy mix during the past 10 years or so. It’s clear that when huge industrial transitions like this occur, engineering is at the forefront. T12 is already supporting waste-toenergy, as well as supporting new technology introduction in oil and gas.

34 energyfocus | www.the-eic.com

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