Energy Focus Spring 2022

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energyfocus

ISSUE 46 SPRING 2022

F ROM T H E E N E RGY I N DUST R I E S COU NC I L VIEW FROM THE TOP ham ITM Power CEO Graham gen: Cooley on green hydrogen: the fuel of the futuree

RE RENEWABLES Oppo Opportunities abound i California’s in w wind-rich waters

OIL AND GAS North Sea Transition Deal one year on: what progress has been made by UK O&G?

NUCLEAR Net zero pushes nuclear power back onto the global agenda

Can the energy industry capitalise – or are the opportunities out of reach?

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Contents ISSUE 46 SPRING 2022

06

FROM THE EIC

ENERGY TRANSITION

5 Foreword From the Chief Executive

18 North Sea CCUS hubs in action

6 View from the top

A look at the three most advanced CCUS hubs around the North Sea

Dr Graham Cooley, CEO, ITM Power

Dr Graham Cooley

Professor Sir Jim McDonald FREng FRSE, President of the Royal Academy of Engineering

OIL AND GAS

10 News and events

32 Ambitious North Sea Transition Deal makes strong progress

Updates from the EIC

12 The big question

14

What are members doing to overcome the supply chain crunch?

Mike Tholen, Sustainability Director, OEUK

Fortune favours the bold

14 Special report Jonathan Dyble asks: will energy be helped or hurt by the inflationary boom?

RENEWABLES

40 My business

22 Regional spotlight

Andrew Hart, CEO, Cargostore Worldwide

28 Floating wind: A chance for offshore success

POWER

North America: Hotspot for renewables but wind powers ahead

24 The US Golden State: A golden opportunity for offshore wind power Paula Major, Chair of Offshore Wind California and VP Offshore Wind – US Mainstream Renewable Power

34 Floating an idea for fossil-free platform power

24

Tim Burnett, General Manager, Market Innovation Oil & Gas, Wärtsilä

Floating offshore wind in California

36

Nuclear is back in favour

NUCLEAR

32

36 Is nuclear back on the table? George Borovas, Head of Nuclear and Managing Partner, Hunton Andrews Kurth Tokyo

North Sea Transition Deal

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

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 Aaron Nicholls 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

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 explore the concept of an inflationary boom – a time when inflation is rising, oil and gas prices are reaching new highs, energy security is at risk and supply chain logistics issues are the norm. What does this mean for the immediate future of energy sector, and what needs to be done to combat it?

I’m writing this foreword at an extraordinary time, with Russia embarking on a full-scale invasion of Ukraine. We never thought we would see this kind of war in Europe again, so it’s extremely worrying for all of us. All at EIC stand in support of the people of Ukraine and remain hopeful that the conflict can come to a swift end. Even before this invasion, the issues of energy security, gas price hyper-inflation and fuel poverty were vexing policymakers and business leaders, but this has now become a critical issue for our sector. With this being a new priority for 2022, will resolving these issues slow down the pace of the energy transition, or is the solution actually a faster move to renewable power, decarbonisation, and shaking off our reliance on traditional oil and gas? Compounding the problem is the fact that the world is also walking into a supply crunch and price inflation crisis. Shipping and logistics issues, reduced availability of key resources and services (such as specialised vessels), price increases, and recruitment are all posing significant challenges to business leaders. The forecasted scale of required infrastructure growth will need vast increases in capacity across the world – from a supply chain that is suffering from multiple constraints and may not be able to deliver the growth. Certainly, we urgently need analysis in the supply chain over what available capacity we have today and what we will need tomorrow. Without the capacity understanding, is the ambition not achievable? If so, how do we address this critical issue?

Despite all this, we are seeing massive opportunities for growth in all energy sectors, in all regions, all at the same time – we have certainly never seen a market like this in recent times. Data from EIC’s CAPEX project-tracking database EICDataStream confirms this. Post-COVID-19, all energy sectors are recovering at an impressive rate. This is especially the case for the renewables and energy transition markets, which are receiving attention from countries and companies as they go faster than ever before to reach their highly ambitious net-zero targets. Following COP26 in Glasgow, huge opportunities are becoming available in all mature renewables markets covering wind, solar and hydro, as well as hydrogen, carbon capture, utilisation and storage, energy-from-waste, biofuels and the circular economy. We were delighted to interview Dr Graham Cooley, CEO of ITM Power, in this issue of Energy Focus; he confirms our analysis. Dr Cooley leads one of the world’s largest electrolyser manufacturers and innovators, which is proudly UK-based, and champions green hydrogen as the fuel of the future, with its rapidly decreasing costs making it competitive with grey and blue alternatives. He highlights the chance the UK has to take the lead in the global green hydrogen market. Now is surely the time for businesses to take advantage of these unique transition opportunities. Companies should look carefully at investing in these and other new technologies and sectors to meet this unprecedented demand. They need to grow their way through this crisis as part of an increasingly diversified portfolio of revenue streams.

In addition to growth by diversification and net-zero innovation, EIC is a longstanding champion of our members developing new export markets, and the timing has never been better to re-energise your export growth plans after two years of travel restrictions and disruption. We all know that while the UK is an exciting market, it is not big enough to feed the ambitious growth plans of all our supply chain businesses, let alone the international companies that also plan to win their share of the UK market. Growing your UK and international market share together is the best pay to accelerate your growth and allow you to more readily repay debts built up since the 2014 oil crisis, Brexit and COVID-19. Give your balance sheets a stronger footing to navigate the inevitable next crisis, which is perhaps already upon us. Above all, during this time of opportunity and uncertainty, entrepreneurs and innovators can take the lead. History has taught us that fortune favours the bold in such moments, and the rewards are waiting for those who can seize the opportunities with both hands and lead our energy sector into new and uncharted waters. While what we are calling an ‘inflationary boom’ has negative connotations, the riches are certainly there for those who are willing to take them.

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 Dr Graham Cooley, CEO, ITM Power

View from the top Dr Graham Cooley CEO, ITM Power

The solution to the energy crisis is more renewable power and more green hydrogen

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Q&A Dr Graham Cooley, CEO, ITM Power: From the EIC

IMAGE: SHAUN FLANNERY PHOTOGRAPHY

Energy Focus meets Dr Graham Cooley, CEO of Sheffield-based energy storage and clean fuel company ITM Power, the world’s leading hydrogen electrolyser manufacturer

EIC data shows that more than 90% of the hydrogen projects announced globally for construction during the next five years are green. Why is green hydrogen is so popular? There are powerful policy drivers for the green hydrogen market as the world moves to net zero. Today, millions of tonnes of hydrogen are sold into industry worldwide, and all of that needs to be decarbonised if we are to reach net zero. You can only get to net zero if you use green hydrogen to replace natural gas in the gas grid or industrial applications. The cost of green hydrogen has also significantly come down. Green hydrogen is directly related to the cost of renewable power, and as the cost of renewable energy has come down, so has the cost of green hydrogen. Today, green hydrogen is competitive with grey and blue hydrogen. Green hydrogen can also help provide energy security. The world has to move away from natural gas, given today’s high and volatile gas prices, and the geopolitics and security of energy supply chains. Finally, by connecting an electrolyser to a long-term power purchase agreement (PPA) with a renewable energy source, you actually get an extremely lowvolatility fuel. The International Energy Association says the world needs 3,500 GW of electrolyser capacity by 2050. How will the industry gear up to meet this challenge? ITM Power has raised £250m to expand our manufacturing capacity to 5GW per annum by 2024, but this only scratches the surface if you look at it over the next 20 years. We need more manufacturing capacity, more gigafactories, and backing from the capital markets. Alongside this, we need the UK government to be more proactive. British energy policies tend to react to circumstances rather than plan for the future. Climate change is a huge problem, but it’s also an incredible opportunity for technology development, manufacturing and engineering. We are a market leader in green hydrogen. ITM Power is the world’s largest electrolyser factory, and it’s in

Sheffield. The government ought to view that as an industrial opportunity, and consider the energy transition as an industrial transition. The UK has set itself an ambition for 5GW of hydrogen production capacity by 2030. Are you concerned that the UK seems to be focusing more on blue hydrogen growth in its initial scale-up, versus green hydrogen? We’re on a journey – a journey that is without a doubt going in the direction of green hydrogen as policymakers acknowledge its immense energy storage potential. Green hydrogen gives you renewable energy storage. With blue hydrogen, you have an ongoing and huge carbon storage liability. To deploy green hydrogen you only need to repurpose the existing natural gas infrastructure, whereas for blue hydrogen – which will continue to use the UK’s methane-leaking gas infrastructure – a CO2 infrastructure and a separate hydrogen infrastructure are also needed. Carbon capture and storage schemes are enormous and incredibly expensive. Blue hydrogen makes no sense at all. What type of support can the government give to encourage the switch to green hydrogen production? The government needs to understand the link between renewable power, long-term energy storage and providing net-zero molecules to industry. In the recent Round 4 Contracts for Difference (CFD), which aims to secure up to 12GW of renewable energy generation – predominantly offshore wind – the negative price protection for the renewable energy companies has been eliminated, so it now falls on the generators and the bidders in the CFD to find a solution. That solution is long-duration energy storage using green hydrogen. There needs to be more joined-up thinking between the CFD for offshore wind and the incentives for green hydrogen. The debate is not currently as sophisticated as it needs to be. And the understanding of how all these elements fit together has not been correctly understood in government.

About Dr Graham Cooley Dr Graham Cooley joined ITM Power as CEO in 2009. Before this, he was CEO of Sensortec Ltd, founding CEO of Metalysis Ltd – a spin-out from Cambridge University – and founding CEO of Antenova Ltd. Dr Cooley started his career in the power sector in 1989 with the CEGB, before serving as the Business Development Manager for National Power plc and International Power plc, developing energy storage and new generation technologies. He has a degree in physics, a PhD in materials technology and an MBA. Dr Cooley also sits on several industry bodies and is a member of the UK government’s Hydrogen Advisory Council.

www.the-eic.com | energyfocus

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From the EIC: Q&A Dr Graham Cooley, CEO, ITM Power

Are you concerned that the hype around COP26, energy transition, and hydrogen/carbon capture, utilisation and storage is going to fade away, and that many of the projects announced will fail to reach final investment decisions? The whole world is now deadly serious about the energy transition. Some problems have certainly come to the fore during this energy crisis. On one hand, you have COP26 and an incredible driving force towards an energy transition. On the other, there is an energy crisis. Somebody somewhere needs to join those two things up. The solution to the energy crisis is more renewable power and more green hydrogen. As the UK works to scale up its projects and supply chain in preparation for net zero by 2050, do you think the government and industry are doing enough to get there? I do fear that the energy transition will become secondary to inflation and fuel poverty during this energy crisis. We must address fuel poverty, but we can’t sort short-term fuel poverty issues at the expense of the most important project on the planet: decarbonisation. We need to find a route through those two things. If you use more and more renewable power, you need fewer fossil fuels, and the more renewable power you have, the more energy storage you’ll need. That’s why you need green hydrogen. These things are solutions to some complicated problems, but the thinking just isn’t joined up enough. What help do you need from government to support your growth and ability to be globally competitive? We’re still waiting for the first large-scale (100MW and above) electrolyser project in the UK. The UK government is funding front-end engineering design studies, white papers and report studies, but it hasn’t funded a large-scale electrolyser, and that is what ITM Power is advocating now. Are you concerned about the supply crunch or inflation? We’ve been developing polymer electrolyte membrane (PEM) electrolysis equipment for more than 20 years, we were

I do fear that the energy transition will become secondary to inflation and fuel poverty during this energy crisis the first hydrogen-related company on the London Stock market, and we’ve been developing our supply chain to reduce, recycle and reuse the materials that we use. When you look at the supply chain and the risks in the supply chain, it’s a competitive advantage to ITM Power. Our competition hasn’t done the work that needs to be done, and that’s one of the reasons ITM Power is a world leader. ITM Power has been built on solid partnerships. Can you tell us more about your collaborations? Strong partnerships are integral to ITM Power. We’ve been working incredibly well with Shell and Linde Engineering for about eight years. We first started deploying hydrogen refuelling stations on Shell’s UK forecourts, using Linde hydrogen compression and dispensing technologies. Since 2017, we have moved from deploying 100kW units to 100MW at Shell’s Rhineland

refinery in Germany. That is, working together, we have achieved a 1,000-times scale up over the last five years. We are working with Ørsted and partners on two projects in the Humberside region – the Gigastack project with Phillips 66 and the OYSTER project with Siemens Gamesa. And we are delighted to be partnering with Scottish Power in the Green Hydrogen for Scotland initiative. Recently, Linde and Italian natural gas utility company Snam have become important strategic investors. We pride ourself on our ability to develop partnerships with global players and use those to develop our tender opportunity pipeline and backlog, both of which now stand at a record. Will COVID-19 or Brexit affect your business in 2022? I have great sympathy for people whose lives have been negatively impacted by the pandemic. It’s been an awful time. But looking at ITM as a business, 2020 and 2021 have been transformational years. We raised a significant amount of money and have just under £400m on our balance sheet. We had substantial backing from the City of London, and we ended up with a tender pipeline close to a 1GW – that’s quotations made against commercial tenders; our backlog of projects now stands at 499MW. We attracted strategic partnerships, moved into the world’s largest PEM electrolyser factory, and through our fundraising activities we developed a platform to deliver to market our nextgeneration product, the 5MW Gigastack, two years earlier than previously planned. As national commitments to net zero accelerate, I believe we are very well placed, with our partner Linde, to address the rapidly growing demand in the market, albeit with new working practices. We’ve proved that we can cope with the difficulties that arise, but I do hope that 2022 marks the end of the pandemic. Are you confident that the UK supply chain can be competitive and build its capability and capacity to match your growth trajectory? We have suppliers all around the world, but the UK, notably Sheffield, is a fantastic place

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Q&A Dr Graham Cooley, CEO, ITM Power: From the EIC

ITM Power Helping the world reach net zero through the power of green hydrogen

ITM Power operates from the world’s largest electrolyser factory in Sheffield with a capacity of 1GW per annum, and has announced its intention to build a second UK Gigafactory in Sheffield with a capacity of 1.5GW, expected to be fully operational by the end of 2023. The Group’s first international facility, expected to have a capacity of 2.5GW per annum, is intended to be operational by the end of 2024, bringing total group capacity to 5GW per annum.

400+

£390 £4.2

employees

million

– more than doubled in the last 18 months

cash balance

million

£

revenue Work in progress

MW

Up 309%

%

499

MW

Up 206%

Tender pipeline

Backlog and pipeline worth

880

£473

MW

million

Up 166%

Up 309%

( % change Jan 21–22 )

86

Backlog

IMAGES: SHAUN FLANNERY PHOTOGRAPHY / SHUTTERSTOCK

Flying start for 2022 Project win for 24MW ammonia application in Norway €1.95m grant from the German government for the SINEWAVE green hydrogen project

in which to be an engineering company and a manufacturing company. We are planning a second automated 1.5GW capacity factory, which will provide the template for our first international facility. We also plan to launch a National Hydrogen Research, Innovation and Skills Centre in a pioneering collaboration with the University of Sheffield, which will

bring together academic research and industrial expertise. The region is already rich in industrial heritage and now has the opportunity to build on its advanced materials and manufacturing reputation to demonstrate global leadership in the manufacture of hydrogen electrolysers and create a highly-skilled workforce.

To deliver on the energy transition, do you believe the best way forward is to ensure a just transition for oil and gas? The oil and gas industry and the City of London must be firmly and fully onboard with the energy transition. I’ve seen some amazing things happen in the oil and gas industry, including Equinor, BP, and Shell’s investments into renewable power, and a strong interest in some of the world’s largest green hydrogen projects. The oil and gas industry must be involved. We have some great partners in the oil and gas industry, and they are key to the development of green hydrogen. As we emerge from the pandemic, are you seeing new opportunities that excite you but also worry you as high and sustained inflation looms? We see interest in green hydrogen all over the world. The radical price increase of natural gas is a powerful driver for green hydrogen because of the cost structure. Although there’s inflation in the cost of electricity and gas, if you connect directly with a PPA to offshore wind or renewable power to provide energy storage, you get a very low price for green hydrogen. I’m worried about fuel poverty, but from the point of view of green hydrogen for decarbonising industry, it’s a driving force. Do you already see a skills shortage in the UK, or can you adequately attract and retain talent? Many fear the energy sector can no longer attract enough talent; do you subscribe to this belief? No, I don’t. As a team of more than 400, we’ve more than doubled in the last 18 months and have found some fantastic people with transferable skills and great enthusiasm for our business. We are a magnet for talent, and that is because people want to be involved in the energy transition. Young people developing their careers want to be part of the solution, not part of the problem. Offer people great jobs and an exciting career in a new and rapidly growing industry, and you won’t have any problem recruiting great talent in the UK. We have some of the most outstanding scientists and engineers in the world. www.the-eic.com | energyfocus

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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 Conferences from EIC coming up in 2022 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.

The North Sea Decarbonisation Conference

Events

EIC LIVE e-vents This year, we are still focused on delivering a packed and exciting virtual events programme, featuring some of the biggest names in the energy industry and with the majority free-to-attend for EIC members. We are also delighted to be reintroducing a range of physical events in a safe and COVID-19-friendly environment, including the EIC’s flagship energy conferences, the North Sea Decarbonisation Conference and the Energy Exports Conference.

When: 17–18 May 2022 Location: De Vere Grand Connaught Rooms, London Why attend? The EIC, along with its international supporting partners, is delighted to be bringing you the second North Sea Decarbonisation Conference. 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 North Sea enters a new era as an energy basin, the oil and gas industry is reshaping its

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

Meet inward delegations from export markets around the world at EEC 2022

strategic responses to the energy transition in order to help reduce emissions, leverage industry capabilities and accelerate towards clean energy. Realising a net-zero vision of the North Sea is both a technological challenge and a huge opportunity, as there is an increasing need for the global transition to clean power to be at least four times faster than it is at present. Visit www.the-eic.com/Events/ TheNorthSeaDecarbonisationConference

Energy Exports Conference When: 14– 15 June 2022 Location: P&J Live, Aberdeen Why attend? The EIC’s flagship event, the Energy Exports Conference (ECC), is returning to a physical format for the first time since 2019, taking place in Aberdeen this June. We know how important it is for business owners to find new routes to growth and resilience in these continuing difficult market conditions. There are vast and exciting energy project opportunities around the world, and the ECC provides companies with access to hundreds of contacts, and a chance to learn about new export opportunities. Meet inward delegations from export markets around the world at ECC 2022. Visit www.the-eic.com/Events/ EEC2022

Making your voice heard During these past few months, EIC’s External Affairs team has been busy working across the policy landscape, engaging with governments in the UK and abroad to ensure that the voice of the supply chain is heard when designing policies and represented in consultations. The current Contracts for Difference scheme is one such document. We have worked with members in nuclear and advocated for the regulated asset base model, and we have worked with hydrogen and carbon capture, utilisation and storage organisations to ensure that the visibility and capability of the supply chain is recognised and developed. We are also working in the finance area to ensure that the policy and finance is representative of what is needed, and to find out how this can change to enable research and development, rather than hindering it. The EIC, in taking forward discussions with international delegations, has looked to develop opportunities with policymakers elsewhere in order to ensure export potential. In all of our work with policymakers and elected members, it is your voice and input that provides the strongest messaging. As we look to strengthen our work in this area, we could not do it without the input of our members.

Reports UK Operational p Renewables In 2021, 606MW was added across 16 projects in the biomass, energy-fromwaste, offshore wind, onshore wind and solar sectors in the UK, with 7.8GW expected to come online in 2022. Despite this, if the country is to meet its targets for clean energy, these 2021 additions are disappointing. However, the outlook for new capacity additions is positive for the coming years, and the opportunities here are highlighted in this report.

European p Operational Renewables Europe has emerged as a global leader in the transition to renewable sources of energy, and has made great progress in bringing renewable assets online to replace facilities that emit greenhouse gases. At the forefront of Europe’s transition to renewables are the targets set by the EU in its latest Green Deal, including a 55% reduction in greenhouse gases by 2030 and 100% clean power by 2035.

Brazil Operational p Renewables During the past five years, Brazil has commissioned slightly under 19GW of renewable energy in hydropower, onshore wind, solar and biomass/ energy-from-waste collectively. Of this new additional capacity commissioned to the grid, 10.4GW came specifically from onshore wind. It has taken Brazil’s global capacity to 174.6GW (including renewable, thermal and nuclear plants).

EIC Country Report: Vietnam Vietnam, with a population of 99 million, is experiencing GDP growth that is higher than those of neighbouring countries Indonesia and Malaysia, and is also placed above the UK and global average. Download the latest EIC Country Report to learn more about Vietnam’s energy landscape, who the major players are, political, economic, social and technological analysis, and for advice on doing business in the country. 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 challenges are you overcoming with the current supply chain crunch?

The supply chain is currently experiencing a crunch, with shipping delays, price increases and logistics issues. What are EIC members doing to overcome these issues and thrive in an increasingly challenging operational environment? Energy Focus puts the big question to four members

Kyriacos Panayides CEO at AAL Shipping AAL Shipping is a global multipurpose shipping operator. Since COVID-19 emerged, stricter health and safety measures in ports and terminals and the rise in demand for basic goods and commodities have led to congestion issues and prolonged idle time. Port terminals and cargo storage areas are full in many ports, causing delays to discharge and load operations and cargo readiness. This impacts our schedule, and congestion charges are being levied on shippers for access to some of the busiest ports. Our procurement of cargo lashing equipment and spare parts is being delayed and failing to meet delivery times while vessels are in port. We carry complex, multi-million-dollar heavy-lift project cargo, requiring specialist handling. Every cargo is different, as are stowage and engineering plans. It has proven difficult to schedule and execute vessel

We constantly have to change the allocation of our vessels attendance of necessary shore personnel due to port restrictions and delays. This is increasing dependence on vessels’ masters, officers and crew, and remote communications systems. However, our services have operated uninterrupted during the pandemic and delivered a dependable solution for shippers and project owners. Planning future cargo employment for our fleet has been difficult. To optimise performance and deliver economies of scale, we constantly have to change the allocation of vessels and mitigate points of delay. AAL Shipping is a project heavy-lift, breakbulk, steel, dry bulk and general cargo ocean transport operator. Since 1995, it has delivered solutions for industries such as energy, mining, construction

and agriculture. AAL operates one of the sector’s largest heavy-lift fleets, serving scheduled monthly liner operations between Europe, Middle East, Asia and Oceania; regular trade lane services connecting the Americas and the rest of the world; and tailor-made tramp sailings globally.

Philippe Somers CEO at ACE 54 Focusing on project logistics within Africa and the Middle East, we have felt significant delays in several large size projects. The macro forces affecting the industry include reduced oil and gas production in Africa as investments in sustainable energy sources soar. The disruptive shocks from COVID-19 are also still being felt across the region, with Africa having been hit extremely hard – the impact has been vastly underestimated, with both cases and deaths in Africa significantly undercounted. There are also upcoming presidential elections in Angola, Kenya and Senegal – three countries supporting significant infrastructure projects.

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Members’ comment: From the EIC

We continue to look for ways to optimise efficiency in our processes In addition to this, we are facing exceptionally high ocean freight rates caused by port congestions due to a lack of resources in some of the world’s largest ports, increased fuel prices, and shipping lines investing in more sustainable methods of transportation. And while costs are rising in the supply chain, clients and shippers want the cheapest price on paper – which is not necessarily the ultimate cheapest rate at the end of the day. To mitigate against these challenges, we continue to look for ways to optimise efficiency in our processes and improve performance by being hands-on, so we can become the conduit for success for our global clients shipping to Africa and the Middle East. ACE 54 offers shippers and consignees more options and a competitive edge in-country on the African continent. This concept provides technical information and best pricing for project destination services in the five African regions. The company has expertise in oil and gas (mid and downstream), renewables, mining, nuclear, hydro power, rail and infrastructure.

Jun Zhang CEO at Atmos International Despite the pandemic further compounding supply chain issues, Atmos International (Atmos) is fortunately a technology company, with services that can be delivered remotely. An area the supply chain crunch has impacted, however, is our leak and theft detection hardware. For example, our non-intrusive instrumentation, such as Atmos Eclipse, is an important part of our customer’s leak

and theft detection strategies, combining software and hardware to provide a complete solution. Atmos’s R&D department has been constrained by parts shortages impacted by the pandemic and changes in customs regulations. Microchips, for example, are in high demand and manufactured in limited quantities. Ensuring we have sufficient stock before completing electronic designs, rather than buying for a ‘just-in-time’ manufacturing delivery, is one of the ways we overcome this. R&D is flexible when it comes to changing difficult-to-source parts that are nonintegral to meeting safety certifications. Good parts are also reused rather than being scrapped, not only to minimise wastage but also to put them back into circulation. Overcoming these challenges meant we were able to deliver large-scale hardware projects at the height of the pandemic. For one customer, we delivered and installed over 50 Atmos Eclipse units across 38 sites. Atmos International is passionate about technology, innovation and customers, aiming to deliver the the industry’s best pipeline leak detection, simulation solutions and customer service. More than 1,500 pipelines and 60 countries within the oil, gas, chemical, water, aviation and mining industries benefit from its technology.

Chris Denton Supply Chain Director, Proserv The challenges faced by supply chains are unprecedented and may represent a new normal. Brexit, COVID-19, protectionism, conflicts and extreme weather have contributed to a disrupted supply chain.

R&D is flexible when it comes to changing difficult-to-source parts

We have developed strong internal networks to share intelligence and resources Flexibility, adaptability, networks, collaboration and change-orientated individuals are key enablers for world-class organisations to thrive in today’s landscape. At Proserv, our supply chain can be global, regional and local. We therefore deploy appropriate strategies that support our operations, customers and stakeholders to deliver maximum value. We have developed strong internal networks to share intelligence, resources and best practice, and through our Supply Chain Talent Development Programme we are providing Proserv’s future supply chain leaders with the necessary tools to succeed year on year. Collaboration to address extended lead times through improved forecasting, the sharing of strategies and partnering are key to future growth. We recently signed a collaboration agreement with Viper Innovations, which shows our approach to working with technology partners to deliver improved levels of service and value. Proserv’s dynamic and committed supply chain team is front and centre in supporting our own energy transition. We have great confidence in our people and processes to maintain high levels of performance, no matter what challenges we face. Proserv is a global controls technology leader, delivering solutions for infrastructure across the energy sector. Proserv’s mission is to harness its expertise and experience to innovate technologies that will improve the reliability, optimise the performance and extend the operational life of key assets. Proserv’s solutions encompass subsea and topside controls, holistic cable monitoring, SCADA systems, intervention workover control systems, sampling andmeasurement. Its technology strategy is focused on energy’s future and the company aims to reach net zero carbon by 2050 or earlier.

www.the-eic.com | energyfocus

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Special report Inflationary boom

Are the opportunities out of reach? With a spike in demand and higher prices providing energy companies with the means for expansion across both new and traditional energy segments, Jonathan Dyble asks: is the current energy landscape equipped to support major growth ambitions? 14 energyfocus | www.the-eic.com

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Inflationary boom : Special report

Oil-driven renewable investment

W

IMAGES: SHUTTERSTOCK / ISTOCK

hile 2021 once again proved that predictions must come with disclaimers, thanks to even more unanticipated events, there is at least some cautious optimism in 2022. As economies continue to rebound from two years of pandemic-induced hardships, successful vaccination programmes and the seemingly less lethal Omicron variant of COVID-19 have boosted confidence as the world once again emerges from uncertainty. Right now, the global outlook is improving. The International Monetary Fund predicts that global growth will reach 4.4% this year, while the Organization for Economic Cooperation and Development revealed that inflation among its 38 states exceeded 5% at the end of 2021. We are currently witnessing an inflationary boom, with strong growth plus a push on prices – a scenario that has seen the energy industry begin to broadly benefit from recent spikes in energy prices. “Demand for energy is increasing as we emerge from the COVID-19 pandemic,” explains John Kent, Chief of Energy Transition at Kent plc. “This is particularly true for transportation fuels, and also hydrocarbonbased power generation in Europe, as wind volumes have been lower in recent months and geopolitical tensions are at a recent high due to the conflict in Ukraine. “Additionally, under-investment in new assets in recent years is fuelling the increase in oil and gas prices. OPEC Plus also maintained a largely cohesive position in recent months on the back of increased cashflow from higher energy prices.”

Opportunities aplenty Indeed, the situation that has emerged has been something of a perfect

storm – one that presents significant opportunities for energy firms. Global oil prices are now rapidly approaching US$100 per barrel for the first time since 2014, providing industry players with the cashflow they need to begin to truly expand investment, enhance research and development efforts, and accelerate project implementation. EIC data shows that traditional oil and gas will remain the largest market for the next five years (see Figure 1). However, for Neil Golding, Director of Market Intelligence at the EIC, significant sums may be leveraged from this booming sector to allow investments in other markets to blossom. “We’ll see investment in renewables,” he says. “Wind and solar offer the potential for low costs, and they’ll be hugely important to ensuring energy firms align with their net-zero targets. “I think we’ll see ramping up of activity in the Middle East, both in terms of conventional hydrocarbons technologies but also potentially in the hydrogen arena – and certainly in carbon capture.” In terms of other regions, Golding anticipates Europe leveraging the inflationary boom to become more self-sufficient in meeting energy demand, while also forecasting huge growth in offshore wind in the Asia Pacific region, driven by China. Indeed, it seems likely that energy firms will take advantage of the boom in oil prices to facilitate their investments in areas such as these. “Many operators are experiencing buoyant cash positions and can see a clear path to continued strong earnings,” explains Kent. “Energy firms are cognisant that there is a development window now open before the world is likely to see a dropping demand in hydrocarbons. I believe regions with lower

We are currently witnessing an inflationary boom with strong growth plus a push on prices – a scenario that has seen the energy industry begin to broadly benefit from recent spikes in energy prices

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Several countries and companies have committed to investment in renewables in recent months thanks to the confidence provided by an inflationary boom, underpinned by high oil prices: September 2021: TotalEnergies revealed it would leverage high oil prices as a means of buying back US$1.5bn in shares so that it could boost investment in renewable energy projects October 2021: The UAE earmarked US$163.4bn for investment in renewables by 2050. Qatar Petroleum also changed its name to Qatar Energy to signal its enhanced focus on renewables December 2021: Saudi Arabia committed to generating 50% of its electricity from renewables by 2030, committing US$101.3bn to renewables investments by the end of the decade February 2022: bp stated it would ensure low-carbon energy would account for 40% of total spending by 2025 and 50% by 2030, shortly after announcing its highest annual profit in eight years

production cost and lower carbon footprints are also likely to see stronger longer-term returns, and getting ahead of this with proactive planning now is likely to reap long-term reward.”

Growth potential: attainable or unviable? There are, however, question marks on whether energy firms will be able to capitalise on the inflationary boom to the extent that they may want to. Supply chain constraints will be a major factor here. Prevalent in all sectors globally, they are perhaps the most significant barrier preventing many markets from taking off as we would otherwise expect. Here, Golding points to the offshore wind market as an example. “Worldwide, we’re expecting to see between 4,000 and 4,500 www.the-eic.com | energyfocus

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Special report: Inflationary boom (Right) Many in the energy industry are warning of a skills shortage, which could hinder growth and activity

US$6bn

US$371bn

Power Oil and gas remains the dominant market for the next five years, with US$3.6tn of CAPEX through to 2027, should all developments proceed. Renewables represents one-third of investment in projects due to be commissioned by 2027 at US$2.1tn of CAPEX. And it is the beginning of the journey for energy transition, with investments hitting US$371bn across hydrogen, carbon capture and floating wind sectors.

Energy transition

US$2.1tn Figure 1. Total CAPEX on global projects

Mature renewables and cleantech (including nuclear)

2022-2027 Source: EICDataStream (February 2022)

US$3.6tn Mature hydrocarbon

companies,” Golding turbines installed offshore explains, providing the between now and the end EIC’s take. of 2024. From 2025 to These thoughts are 2030, to hit the targets on echoed by David Clark, the announced projects, CEO of Vysus Group – a we will have to install leading engineering and anything between 27,000 technical consultancy. and 40,000 turbines. “We will very quickly see “We’re looking at a skills shortage in the potentially 6,000 turbines energy sector, with many a year that need to be people having left the installed over that period, sector for good,” Clark but we just simply don’t states, recounting the have the vessels or impact of more challenging fabrication capacity to years. “Coupled with the achieve those numbers supply chain constraints right now.” and cost inflation in key This problem is being core components such as exacerbated by political steel and cement, the challenges. In the UK, for Neil Golding, Director of Market delivery of new projects example, Brexit is Intelligence, EIC will become increasingly continuing to contribute challenging.” to a delay in goods getting into the country. Meanwhile, skills shortages present an Industry remains upbeat equally significant challenge. For new Many industry players are working closely projects to accelerate, a dramatic increase with universities to show the benefits of in industry specialists is required, yet the carbon capture and clean tech in order to current talent pool is unable to fully meet attract new talent, while Kent points to such demands. strong anticipated growth in low-carbon “Personally, we’re finding attracting and and renewable energies. recruiting people to work in the energy “This year will be better than the last industry to be a significant challenge, and two years,” Golding adds. “We’ll see more we’re hearing the same from our member activity in oil and gas; we’ll see more activity

We’ll see more activity in oil and gas; we’ll see more activity in offshore wind; we’ll see projects really moving forward in the carbon capture and hydrogen sectors

Top global markets in energy transition North America, Europe and Australasia lead the way in terms of the number of new project announcements, with the US, Australia, UK, Chile and Germany on top. The top 5 countries leading in CAPEX spend (US$m) through to 2030 on known developments are Australia, the US, Brazil, China and the UK. Source: EICDataStream (February 2022)

in offshore wind; we’ll see projects really moving forward in the carbon capture and hydrogen sectors. And you will continue to see growth in the commoditised renewables sector as well. “There’s just that one big question mark,” he finishes. “How far will energy companies be able to capitalise on this window of opportunity?”

16 energyfocus | www.the-eic.com

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Energy transition North Sea

T

North Sea

CCUS hubs

in action

Industrial clusters are critical to getting to net zero. While the development of carbon capture, utilisation and storage (CCUS) so far has been slow, stronger climate targets and investment incentives are injecting new momentum into the technology. Energy Focus spotlights the development of the three most advanced CCUS hubs around the North Sea in Europe, with an introduction by James Richardson, Commercial Director, UK Industrial Decarbonisation at Baker Hughes

o reach net zero, the International Energy Agency estimates that 7.6 gigatonnes of CO2 will need to be captured and stored annually by 2050 using carbon capture and storage (CCS). With industry being responsible for 30% of total global CO2 emissions, industrial clusters will be critical players in accelerating the path to carbon neutrality. While first-of-a-kind projects such as East Coast Cluster, Northern Lights and Porthos face considerable challenges to their development, from a technology viewpoint, many (although not all) of the component parts are proven at some scale. The supply chains built up around our chemical, petrochemical and offshore oil and gas industries have significant capability. The new opportunities presented by the investment in CCS and hydrogen hubs is another market into which these core capabilities can spread. The opportunities are substantial, but there are also risks. Parallel development of industrial clusters will cause supply chain constraints. This is true at a national level, but is even more true at a European level. The economics of cluster development vary from region to region. Those areas with favourable economics will accelerate supply chain development. This has the potential to cause constraints for those not at the forefront of construction when supply chains focus investment around the front runners. Ensuring that Europe develops a large, technologically advanced and capable CCS and hydrogen supply chain will depend on the rapid development of the market for applicable technologies. It is imperative that such infrastructure development continues at pace in order to reduce emissions, build out supply capacity and reduce investment uncertainty for the developers and their supply chains.

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North Sea industrial clusters: Energy Transition

GHG Emissions 27Mt CO2 By 2030, the cluster could capture up to 27Mt CO2 per year

10Mt CO2 captured by Net Zero Teesside

17Mt CO2 captured by Zero Carbon Humber

50% ECC aims to remove nearly 50% of all UK industrial cluster CO2 emissions

Jobs 25K ECC will support over 25,000 jobs per year, rising to 41,000 in 2026

Building starts 2023 Construction of CCUS infrastructure is slated to start in 2023

UK | EAST COAST CLUSTER

Kickstarting a green economy in UK’s largest industrial heartland After being selected on Track-1 of the government’s cluster sequencing process in October 2021, effectively receiving the green light to become operational in the mid-2020s, the East Coast Cluster (ECC) stands ready to decarbonise industry across Teesside and the Humber. The cluster will protect thousands of jobs and establish the region as a globally competitive climate-friendly hub for industry and innovation. The region has historically been the UK’s engine room and is currently responsible for almost 50% of the UK’s industrial cluster emissions. Many of its industries are hard to abate, making carbon capture, utilisation and storage (CCUS) integral to reducing its emissions. By 2030, the cluster could capture up to 27m tonnes of CO2 (Mt CO2) from a diverse mix of low-carbon projects, including industrial carbon capture, low-carbon hydrogen production, negative emissions power, and flexible power with carbon capture. Deploying CCUS technologies in Teesside and the Humber is an opportunity to support the government’s levelling up agenda. It will safeguard traditional industrial roles while creating thousands of new jobs in the green economy. Across the region, we will support on average more than 25,000 jobs

per year, peaking at 41,000 in 2026 when the ECC is operational. The ECC’s selection as one of the UK’s first two clusters was the first milestone along the road to making CCUS a reality on the East Coast. The next milestone will come in summer 2022, when we find out which projects the government will select to connect to the infrastructure. Government support has been, and remains, integral to delivering CO2 reduction through carbon capture, providing the clarity and guidance needed to unlock private investment. Meanwhile, the construction of the CCUS infrastructure is already planned to begin in 2023. We will actively work with the industry’s supply chain and local communities as we take on the exciting development of this first-of-its-kind project for the UK. The Climate Change Committee has highlighted the vital role of CCUS in the decarbonisation of the UK, stating that achieving net-zero by 2050 will not be possible without CCUS. The ECC stands ready to kick-start a new green economy by decarbonising one of the UK’s industrial centres. By Andy Lane, Managing Director, Net Zero Teesside and Northern Endurance Partnership

Northern Endurance Partnership 5 partners bp, Equinor, National Grid, Shell and Total

Project value US$2.6bn+ average GVA up to 2050

(Above) The East Coast Cluster is made up of both Zero Carbon Humber and Net Zero Teesside, supported by the Northern Endurance Partnership

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Energy Transition: North Sea industrial clusters

Norway | NORTHERN LIGHTS

GHG Emissions 1.5 Mt CO2

Carbon storage as a service Northern Lights is responsible for developing and operating CO2 transport and storage facilities, open to third parties, as part of the Norwegian government’s full-scale CCS Longship project. When it is operational in 2024 it will be the first-ever cross-border open-source CO2 transport and storage infrastructure network, and will offer companies across Europe the opportunity to store their CO2 safely and permanently underground. The project reflects the Norwegian government’s ambition to develop a full-scale CCS value chain in Norway by 2024, demonstrating the potential of this decarbonisation approach. Northern Lights JV DA is equally owned by Equinor, Shell and TotalEnergies. The first development phase will have the capacity to store 1.5Mt CO2 annually, and we plan to increase the capacity to 5Mt CO2 in a second development phase (subject to a final investment decision).

Based on interest from industrial customers, we have decided to raise our ambition from the current 5Mt as demand grows across Europe. We recently received €4m under the Connecting Europe Facility funding scheme to support FEED studies enabling this expansion. The interest in carbon capture and demand for storage capacity is growing fast as companies and countries implement net-zero strategies. We are positioning ourselves to receive CO2 from several different sectors. The opportunity is enormous as it is almost impossible to achieve the world’s climate goals without this technology. At our Øygarden receiving terminal, most of the civil works for site preparation have been completed. The construction of the import jetty is well underway, and the project office and visitor centre are due for completion in Q3 this year. Fabrication and installation of the onshore plant are about to start.

Our first offshore CO2 injection well was drilled in 2020, and the second well is set for drilling mid2022. The fabrication of the umbilical is completed, and fabrication of the power and fibre optic control cable is ongoing. Engineering of pipelay and fabrication of pipeline is continuing. In October 2021, we awarded contracts to build two dedicated CO2 carriers. These will be delivered in the first half of 2024. We are on schedule to start operations in 2024 as planned. An important goal of the Norwegian government’s commitment to Longship is to demonstrate that CCS is sustainable. The Norwegian project is intended to trigger CCS investments in Europe, and the significant increase in the ambitions of Northern Lights testifies that the European market is moving in a positive direction. By Børre Jacobsen, Managing Director, Northern Lights JV DA

Phase one of Northern Lights will capture 1.5Mt CO2 per year

5Mt CO2 The ambition is to expand capacity to 5Mt CO2 per year in Phase 2

Jobs The project’s construction phase will bring between 1,500 and 3,000 jobs, with around 170 jobs created directly during operation

Startup Phase 1 is on track to start operations mid-2024

Partners Equinor, Shell, TotalEnergies

Project value US$1.63bn

(Left) Northern Lights is using an innovative and versatile ship-based system for transporting CO2 and storing it 2.6km under the seabed

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North Sea industrial clusters: Energy Transition

GHG Emissions 2.5 Mt CO2 Porthos will store 2.5Mt CO2 per year for 15 years

10% Porthos aims to remove around 10% of the CO2 emissions in Rotterdam

Startup 2024

Partners EBN, Gasunie and the Port of Rotterdam Authority

The Netherlands | PORTHOS

(Left) Porthos will store 37Mt CO2 in sealed reservoirs of porous sandstone, more than 3km beneath the seabed

Port of Rotterdam CO2 Transport Hub and Offshore Storage The Netherlands has clear climate objectives: to reduce greenhouse gas emissions by 55% below 1990 levels by 2030, and to be carbon neutral by 2050. One of the few solutions to tackle emissions from heavy industry is CCS. Currently, CCS is the fastest way to substantially reduce CO2 emissions at a relatively low cost. It is a temporary solution, giving industry time to make their production processes more sustainable. The Rotterdam port area is responsible for approximately 14% of the CO2 emissions in the Netherlands, making the region’s

contribution to the national climate objectives extremely important. Porthos – a collaboration between EBN, Gasunie and the Port of Rotterdam Authority – is developing a project to transport CO2 from industry in the Rotterdam port area and store it in empty gas fields beneath the North Sea. The carbon that will be transported and stored by Porthos will be captured by various industrial companies in Rotterdam. Our customers, Air Liquide, Air Products, ExxonMobil and Shell, will supply their CO2 to an onshore collective pipeline. The CO2 will then be pressurised at a compressor

For more information on these projects please email neil.golding@the-eic.com

station and transported via an offshore pipeline to a platform at the North Sea. From the platform, the CO2 will be injected into empty gas fields. The empty gas fields are situated in sealed reservoirs of porous sandstone, more than 3km beneath the seabed. Porthos will store around 37Mt CO2 – approaximately 2.5Mt CO2 per year for 15 years. With seven major companies and two ministries – Economic Affairs & Climate Policy and Interior & Kingdom Relations – working together on this project, meeting all preconditions and requirements is a complex process. The three state-owned companies each have their own shareholders and corporate culture, and each of our customers has its own ideas and approach. Bringing it all together is sometimes a challenge. However, the common goal is the binding factor for settling discussions. In 2021, Porthos achieved several milestones. We have taken significant steps in the permitting process and selected a construction company for the onshore pipeline. Our customers were awarded Stimulation of Sustainable Energy Transition subsidies, and last December we signed the final CO2 transport and storage contracts with our customers. Porthos is sold out; there is currently no storage capacity available, but we are investigating the possibilities for a follow-up project. The project team is working hard to realise Porthos. We are working on the technical preparations and the permitting process. Following the final investment decision, expected later this year, the construction of the infrastructure will commence. It is expected that Porthos will be operational by 2024. By Wim van Lieshout, Project Director, Porthos www.the-eic.com | energyfocus

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Renewables North America

Hotspot for

renewables

but wind powers ahead

Sharp Hills Wind Farm Alberta, Canada EDP Renewables is building a 300MW onshore wind farm approximately 18km south-east of Consort, Sedalia and New Bridgen Hamlets. The wind farm features Enercon’s E-138 EP3 E2 turbines with a hub height of 128m and a 138.6m-diameter rotor. It is being developed in two phases, with 59 turbines and 12 turbines respectively.

Discover new renewable energy opportunities in North America with the help of team EIC Houston

T

he energy landscape of North America is growing into a diverse hotspot for renewable energy. With the likes of hydro, solar, geothermal and wind energy further cementing their presence in the region, novel technologies, such as tidal, are also starting to emerge at a promising rate. Amid all this growth, offshore wind has become a sector for new investment and opportunities during the past year. A key element of the Biden administration’s clean energy plans, the offshore wind sector is navigating at full sail in the US. From Massachusetts to Virginia on the East Coast, developers are advancing multi-billion-dollar projects that are stirring the supply chain and contributing to the government’s goal of achieving 30GW of offshore wind capacity by 2030. Indeed, EICDataStream is currently tracking 25 projects across the Eastern Seaboard with a combined CAPEX of US$82bn. Construction of the country’s first utility-scale offshore wind farm is now

underway and conditional orders for equipment supply are now being converted to firm contract awards as developers Ørsted and Avangrid sanction their respective projects. Developers and contractors alike are also active in the development of onshore manufacturing and shore support facilities in various states. And that is just the beginning: the recent New York Bight lease sale organised by the Bureau of Ocean Energy Management last February offered six areas to players such as OceanWinds, RWE, Shell and TotalEnergies for a total of US$4.37bn. Looking beyond the East Coast, federal authorities are currently looking at the feasibility of offshore wind developments in the Gulf of Mexico as well as California. The Golden State is definitely a space to watch: seabed conditions will make the state the target of floating offshore wind developments. For more on West Coast opportunities, turn to the feature on page 24 by Paula Major, Chair of Offshore Wind California and VP of Offshore Wind at US Mainstream Renewable Power.

Oberon Solar PV project California, US With solar energy also dominating the US energy landscape, Intersect Power has proposed a 500MW solar PV plant and a battery energy storage facility in Riverside County. Intersect Power has received US$2.6bn in financing for its portfolio of solar and energy storage projects in California and Texas, which is expected to aid this development. The Bureau of Land Management has also authorised its build on public land.

Pinos Solar PV Plant Zacatecas, Mexico Meanwhile in Mexico, Desarrollos Solares PV de México I is developing a 297MW solar plant in Pinos, comprising of 1.05m polycrystalline photovoltaic panels and 400kV substations. An environmental impact statement for the project has been filed to the environmental regulator for assessment.

Looking to expand into North America? The EIC can help If you are thinking about doing business in North America, our team in Houston are on hand to help. For services including market intelligence, project data, industry connections and export assistance email houston@the-eic.com 22 energyfocus | www.the-eic.com

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North America: Renewables

Empire Wind Offshore Wind Farm New York, US Developed under a partnership between Equinor and bp, Empire Wind will boast an installed capacity of 2GW when its two phases – EW1 and EW2 – are complete. In October 2021, Vestas was designated as the preferred supplier for 138 V236-15MW turbines for the two projects. Both phases have electricity supply contracts with the New York State Energy Research and Development Authority.

Uisce Tapa Tidal Energy Project Nova Scotia, Canada

Vineyard Wind Offshore Wind Farm Massachusetts, US The first commercial-scale project to receive a final investment decision in the country, Vineyard Wind (developed by an AvangridCIP joint-venture) will generate 800MW from 62 Haliade-X turbines ordered from General Electric. Located about 40km off the coast of Martha’s Vineyard, the project will feature submarine cables supplied by Prysmian. Start-up is expected in 2024.

Moving to Canada, to exploit an area with some of the highest tides in the world, DP Energy has proposed the 9MW tidal project at the Fundy Ocean Research Centre for Energy site. DP Energy announced a partnership with energy utility company Chubu Electric Power Company and international cargo shipping company Kawasaki Kisen Kaisha to develop the first phase, employing three 1.5MW Andritz hydro turbines.

Borinquen I & II Geothermal Project Guanacaste, Costa Rica Coastal Virginia Offshore Wind Virginia, US Being developed by Dominion Energy, the Coastal Virginia Offshore Wind farm has a planned installed capacity of 2.6GW. Belgian company DEME Offshore and Prysmian were awarded a US$1.8bn contract for the transport and installation of project structures in addition to the supply and installation of submarine cables. Siemens Gamesa will supply 176 turbines following a contract awarded in December 2021.

Costa Rica is home to a geothermal project with one of the highest CAPEX in the region. Currently in the early planning stages, the two plants will have capacities of 55MW each and will run on steam from volcanoes. Instituto Costarricense de Electricidad will oversee the main work and will tender the design and construction contract for the machine house, in addition to the supply of the necessary electromechanical equipment in 2026/2027.

IMAGES: SHUTTERSTOCK / ISTOCK

Changuinola II Hydroelectric Power Plant Bocas del Toro, Panama

PROJECTS TO WATCH ACROSS NORTH AMERICA

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To move forward with its hydroelectric initiative, Empresa de Generacion Electrica is endeavouring to finalise the design of a 223MW hydroelectric power project. Being the only proposed hydropower project in the country, the study and design work for the plant is due for completion this year, with final completion earmarked for 2027.

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Renewables US floating wind

The US

Golden State: A golden opportunity for offshore wind power 24 energyfocus | www.the-eic.com

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US floating wind: Renewables

(Below) The Windfloat, pictured in operation off the coast of Portugal, is a floating offshore wind technology developed by California-based Principle Power – one of 40 member companies making up Offshore Wind California, which promotes policies and builds public support for offshore wind development in the state

C

alifornia may be best known in the energy industry for its trailblazing solar market, but the landmark Joint Agency Senate Bill 100 report (SB100), published in March 2021, concluded that California will need at least 10GW of offshore wind if it is to achieve its 100% renewable and zero-carbon goals by 2045 in a cost-effective manner. While this would be a positive step, 10GW represents just a small fraction of the approximately 140GW of new renewable energy that is needed for California to reach its full decarbonisation goals.

California gets serious about offshore wind The California Energy Commission is now working to establish clear offshore wind targets for 2030 and 2045, as directed by state legislation (Assembly Bill 525), through engagement with the industry and stakeholders. The focus is on setting out plans to support the development of a thriving and worldleading floating wind industry by 2030 and beyond. Even before the Bureau of Ocean Energy Management (BOEM) announced that it would lease the first 4.6GW of available deep-water leases by the autumn of 2022, California had the attention and engagement of the major global offshore wind players. Offshore Wind California, a coalition established by seven companies in 2019, now boasts 40 member companies, ranging from environmental consultants to large international energy companies.

The West Coast catches up

24-26 US offshore_Spring 2022_Energy Focus.indd 25

IMAGE: COURTESY OF PRINCIPLE POWER. ARTIST: DOCK90

With consistent winds, vast coastlines and a commitment to 100% clean energy, California is ripe to establish itself as a global leader in floating offshore wind power, writes Paula Major, Chair of Offshore Wind California, and VP of Offshore Wind at US Mainstream Renewable Power

These organisations are all working together towards the collective goal of realising California’s first offshore wind projects. The Morro Bay Wind Energy Area off the state’s Central Coast will have a capacity of approximately 3GW, and access to 5–6GW of interconnection capacity, according to a staff report from the California Independent System Operator. In Northern California, meanwhile, the Humboldt Wind Energy Area will have approximately 1.6GW of leases available, according to BOEM. Ahead of the auction, BOEM will issue a Proposed Sale Notice to gather feedback on several items relating to the proposed auction. The issuing of a Final Sale Notice

The vision for California is deploying floating offshore wind at scale and with speed www.the-eic.com | energyfocus

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Renewables: US floating wind

Eureka

Humboldt Wind Energy Area

The challenges are considerable, but the opportunities are tremendous for sowing the seeds to grow a long-standing thriving industry.

San Francisco

Rich with opportunities

Figure 1: California offshore wind energy areas Morro Bay

BOEM The Bureau of Ocean Energy Management has designated two Wind Energy Areas for the development of off shore wind power off the North and Central Coasts of California.

Morro Bay Wind Energy Area

will follow 45 days before the auction, containing details of the final leases being made available, the final list of qualified bidders, and specific details of the auction rules and bidding process.

The time is now for floating wind The UK’s recent ScotWind announcement, awarding 15GW of floating wind project leases, offers proof that floating wind is set for commercial-scale development on the global stage. According to the Scottish government, for every 1GW of capacity awarded, these projects will secure at least US$1.36bn in supply chain investment. The vision for California involves deploying floating offshore wind at scale and with speed. The new state budget proposal issued by California Governor Newsom earlier this year earmarked US$45m for offshore wind infrastructure in the fiscal year 2022–2023. A new Offshore Wind Energy Deployment Facility Improvement Program is planned to advance capabilities for deploying offshore wind in federal waters with improvements in facilities planning and development.

Los Angeles

Mainstream Renewable Power Mainstream Renewable Power is one of the world’s most successful gigawatt-scale renewables platforms developers across wind and solar. In May 2021, Aker Horizons acquired a 75% equity stake in the company, accelerating its plans to deliver its pipeline of over 16GW of clean energy. Mainstream is one of the world’s most successful developers of offshore wind at scale, having developed and consented 20% of the UK’s offshore wind capacity in operation or under construction – including the world’s largest operational offshore wind plant, the Hornsea zone.

California still has plenty of challenges if it is to establish itself as a global leader in floating wind. Unlike other US states, there are no firm offshore wind power offtake commitments or targets as yet. Ports will require investment, and transmission systems will need extensions in the north and upgrades elsewhere.

Local and or regional supply chains will be needed to support this new billiondollar industry along the West Coast – from California to Oregon (3GW by 2030) and Washington. From design, manufacture and transport of equipment, to installation and a host of activities and associated services, meeting the challenge will require a range of expertise to deliver the various aspects of each offshore wind project. With the significant water depths (500–1,300m) and hundreds of floating turbines along the Central and North California coasts, vast lengths of mooring lines will be needed – at least 800km to support the 300-plus turbines in California alone. Along with onshore infrastructure, a range of engineering services, environmental monitoring, surveys, protection services, remote operated vehicles, divers, other environmental activities and ports upgrades will be needed. Hydrogen, storage, and hybrid solutions also offer vast opportunities for partnership, investment, and innovation.

The next frontier in renewables Government agencies’ ongoing progress in California to bolster the industry by committing to offshore wind targets and supporting a supply chain will help drive California and the entire US West Coast to be the next frontier for floating offshore wind. By Paula Major, VP Offshore Wind – US Mainstream Renewable Power, Chair of Offshore Wind California, Board Member of Business Network Offshore Wind, and Council Member of America Clean Power Offshore Wind Council

26 energyfocus | www.the-eic.com

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ENERGY EXPORTS CONFERENCE

BOOK YOUR PLACE NOW

Energy Exports Conference 2022 I

P&J Live Aberdeen

14 – 15 June 2022

www.the-eic.com/EEC

PRINCIPAL MEDIA PARTNER

#1 event to identify global energy opportunities and meet decision makers Whether you’re an experienced exporter or are yet to begin your exporting journey, EEC will: Identify key global energy project opportunities and provide advice on how to succeed in new markets Renewables Onshore, offshore and floating offshore wind, solar, energy storage, geothermal, hydroelectric, biofuels, energy from waste

Hydrogen and Carbon Capture Blue hydrogen, green hydrogen, CCUS and direct air capture

ATTEND Identify new project opportunities. Engage and connect with international operators, developers, contractors, government, and export advisors 2021 stats

6198

Attendees across all sessions

1681

Give you access to contacts with exciting energy project opportunities from around the globe

Attendees visited the 24 exhibiting companies in the virtual exhibition hall

Discuss the industry’s energy transition requirements and opportunities evolving from net zero targets

Nuclear New build, SMR, AMR, O&M, waste management and decommissioning

EXHIBIT Dust off those demo products… The exhibition is the ideal platform for companies to showcase their products and services to the global audience

2961

Individual registrations from 1,871 registered companies

519

Networking and one-to-one meetings

Energy Opportunities Electrification, oil and gas, advanced fuels, upstream decommissioning, emission reduction

SPONSOR Enhance your profile and align your brand with the key themes. Access an unparalleled level of exposure to key decision makers within the global energy industry

159

Speakers from 43 companies

283

Virtual meeting hub connections

Organising partners

EIC_Spring22_027.indd 27

11/03/2022 09:14


Renewables UK floating wind

I

n one day, the recently announced ScotWind offshore wind leasing round added a pipeline equivalent to double that of all the UK offshore wind currently in operation. Of the 24.8GW of new capacity expected to be developed, 15GW will come from floating wind – enough for the annual power needs of around 10m homes. This demonstrates Scotland’s huge ambition to develop the global offshore wind market and indicates the scale of necessary action to achieve net zero. Offshore wind is increasingly recognised as both a source of much-needed additional renewable capacity and a major economic opportunity for the UK, as outlined in the government’s net-zero strategy. Floating wind platforms, whereby wind turbines are tethered by mooring lines to the seabed, allow turbines to be located in deeper waters than fixed-bottom wind farms. This opens up vast areas of the deep sea for generating renewable power, where the strongest winds tend to form. Doing so is critical for the development of clean energy in not only the UK, but also other countries with access to deep waters, such as the US, South Korea, Japan, China, Norway, France and Spain.

The floating wind market is maturing. Other facilities, such as Gwynt Glas in the Celtic Sea, set to be the world’s largest floating wind farm, have been announced – but what wee need now is rapid upscaling. The portfolio o off projects anticipated to flow from ScotWind (see Figure 1) will provide an opportunity for the UK to lead on floating wind, and to show the world the role of engineering in achieving net zero.

Winds of change: opportunities for economic development and clean energy Leveraging power from floating wind to transition to a low-carbon economy comes with many advantages. Not only can it generate more energy from stronger winds, but it can also reduce construction costs and delays by integrating turbines at sheltered locations before deployment. Additionally, developing the floating wind industry could significantly boost coastal economies.

Floating wind:

In Scotland, it would enable industry to build on its rich heritage in offshore systems, subsea engineering and manufacturing, echoing the beginnings of the domestic oil and gas sector. Floating wind provides a practical route for oil and gas workers to transfer their skills to renewable energy. Across the UK, floating wind has the potential to deliver £43.6bn in UK gross value add (GVA) by 2050, creating more than 29,000 jobs in the process, including many employment opportunities for engineers and technicians. By gaining an early-mover advantage, the UK is well placed to create a globally competitive supply chain, project delivery reputation and experienced talent pool, and to sell its specialised engineering expertise to other countries adopting floating wind energy. The UN’s International Renewable Energy Agency forecasts that 90% of electricity will be generated by renewable sources by 2050. A huge global shift is required to achieve this. In the UK, offshore wind currently accounts for 13% of our total electricity generation. However, it will need to form a much higher proportion if we are to meet our commitment to 100% clean electricity by 2035. Significant further investment in floating wind is needed for the UK to reach its clean energy potential.

A chance for offshore success The ScotWind tender results mark the commercial breakthrough of floating offshore wind, but we need significant and sustained investment in infrastructure and supply chain capability if the UK is to deliver the technology at scale and cement itself as a world leader, says Professor Sir Jim McDonald FREng FRSE, President of the Royal Academy of Engineering 28 energyfocus | www.the-eic.com

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UK floating wind: Renewables

UK offshore wind currently accounts for 13% of the UK’s total electricity generation

15

14

Figure 1: ScotWind Awarded Projects

13

7

Green areas are those under option agreement. Numbered labels indicate successful bids listed here

16 12

8

11

9 10 5

4

6 3

17

2 1 1 BP Alternative Energy Investments 2,907MW 2 SSE Renewables 2,610MW 3 BlueFloat Energy, Falck Renewables 1,200MW 4 Shell New Energies 2,000MW 5 Vattenfall 798MW 6 DEME 1,008MW 7 DEME 1,008MW 8 Falck Renewables 1,000MW 9 Ocean Winds 1,000MW 10 Falck Renewables 500MW 11 Scottish Power Renewables 3,000MW 12 BayWa 960MW 13 Offshore Wind Power 2,000MW 14 Northland Power 1,500MW 15 Magnora 495MW 16 Northland Power 840MW 17 Scottish Power Renewables 200mw

www.the-eic.com | energyfocus

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Renewables: UK offshore wind

Nearly 15GW of new floating wind capacity to be created from ScotWind – enough to power around 10m homes annually Accelerating investment Making commitments to upscale offshore wind is one thing – but delivering on that objective is another. So, for example, how can the ambitions of ScotWind be realised? The first challenge is, unsurprisingly, cost – but this challenge has been overcome before. With fixed offshore wind, we have seen how swift upscaling, continued innovation and high-value engineering enable costs to fall; the significant reduction in £/MWh of offshore wind over the past decade shows that. Such an approach, in turn, precipitates further growth in global market development, UK jobs and exports. A second challenge is the level of infrastructure needed. The immense size of floating offshore wind structures requires a great deal of space to accommodate their manufacture. ScotWind, for example, will require up to 500 hectares (ha) of space for marshalling and assembly facilities, but Scotland currently only has an estimated

50ha available in its six largest facilities. It is vital that more collaboration between ports should be encouraged to overcome barriers related to lack of space. Forming ‘port clusters’ borne out of the combined efforts of multiple ports could help to provide the additional capacity needed. Additionally, the visibility of a long-term pipeline could help to create the cycle of investment needed for implementation. A healthy project pipeline inspires confidence and encourages investment in infrastructure and supply chain capability, and as upscaling occurs, costs may decrease, stimulating further investment and employment opportunities. This fosters a long-term approach and accelerates investment in research and innovation, which will become increasingly necessary if the UK is to cement its position as a global leader in offshore wind technology. It is also important to take account of the floating wind turbine’s life cycle, including

costs and responsibility for decommissioning. We must never forget the sustainability of the technologies themselves. And investment in creating sustainable end-of-cycle turbine designs to prevent environmental harm is also needed to further future-proof the enduring potential of floating wind.

Looking to the horizon As the UK sets out to meet its net-zero ambitions following COP26 and its focus on ‘levelling up’, new floating wind facilities have the potential to reinvigorate our offshore energy success to date. However, to ensure that the UK delivers on this potential in the decades to come, we must continue to invest in infrastructure, skills, technology and innovation. ScotWind is just the beginning. By Professor Sir Jim McDonald FREng FRSE, President of the Royal Academy of Engineering

ScotWind Awarded Projects Map Project reference

Operator

Value (US$bn)

Start up

Technology

Water Total capacity depth (MW)

5

2030

Fixed

2,907

1

Offshore Wind Farm Morven E1 Zone

BP Alternative Energy Investments

2 3

Floating Offshore Wind Farm E1 Zone

SSE Renewables

5.5

2030

Floating

Floating Offshore Wind Farm E1 Zone

BlueFloat Energy, Falck Renewables

3.5

2030

Floating

4

Floating Offshore Wind Farm Campion Wind E2 Zone

Shell New Energies

4.5

2030

Floating

5

Floating Offshore Wind Farm E2 Zone

Vattenfall

3

2030

Floating

798

6

Offshore Wind Farm Cluaran Deas Ear E3 Zone

Thistle Wind Partners (TWP) (Consortium: DEME Concessions (Wind) NV, Qair Marine SAS, Aspiravi International NV)

3

2030

Fixed

1,008

7

Floating Offshore Wind Farm Cluaran Ear-Thuath NE2 Zone

Thistle Wind Partners (TWP)

3.5

2030

Floating

1,008

8

Floating Offshore Wind Farm NE3 Zone

BlueFloat Energy, Falck Renewables, Ørsted

3.8

2030

Floating

1,000

9

Offshore Wind Farm Caledonia NE4 Zone

Ocean Winds (Consortium: Engie, EDP Renováveis)

4

2030

Fixed

10

Floating Offshore Wind Farm NE6 Zone

BlueFloat Energy, Falck Renewables

1.5

2030

Floating

11

Floating Offshore Wind Farm MarramWind NE7 Zone

Shell New Energies, Scottish Power Renewables

6

2030

Floating

12

Floating Offshore Wind Farm NE8 Zone

Floating Energy Alliance (Consortium: BayWa r.e., BW Energy, Elicio)

3

2030

Floating

960

13

Offshore Wind Farm West of Orkney N1 Zone

Offshore Wind Power (Consortium: TotalEnergies, Macquarie’s Green Investment Group, Renewable Infrastructure Development Group)

4.5

2030

Fixed

2,000

14

Floating Offshore Wind Farm N2 Zone

Northland Power

4

2030

Floating

1,500

15 16

Floating Offshore Wind Farm N3 Zone

Technic FMC, Magnora

2.3

2030

Mixed

Offshore Wind Farm N4 Zone

Northland Power

1.8

2030

Fixed

840

17

Offshore Wind Farm MachairWind W1 Zone

Scottish Power Renewables

3

2030

Fixed

2,000

72

2,610 1,200

77

2,000

50

1,000

100

3,000

500

125

495

Source: EICDataStream

30 energyfocus | www.the-eic.com

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Continuing to invest in EIC members EIC_Spring22_031.indd 31

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Oil and Gas North Sea (Below) Sch Unt latem sit renist apitas dolori occus, erum alibus et quid mo volorem inus pe poriorundae quate et

Ambitious T

North Sea transition deal

makes strong progress

he quest to achieve net-zero greenhouse gas emissions while also ensuring energy security for the UK is our biggest challenge, but one we believe the North Sea Transition Deal (NSTD) will help us bring about. In February this year, OGUK expanded its remit to become Offshore Energies UK (OEUK). To make the most of our homegrown resources, the future of the North Sea lies in achieving an energy mix that is powered by oil and gas, alongside offshore wind and emerging technologies such as hydrogen production or carbon capture and storage (CCS).

Just transition It has been almost a year since our industry agreed the NSTD with the government. This groundbreaking agreement outlines how, together, we will work to deliver the skills, innovation and infrastructure the UK requires to meet its carbon reduction targets. It provides a credible plan for ensuring the transition to net-zero emissions is fair and sustainable. All parties, including the unions, industry and regulators, need to work together constructively to manage this process, ensuring we are inclusive about taking energy communities and the hundreds of thousands of people who rely on oil and gas for their livelihoods with us on this journey. Change cannot take place overnight. Demand for oil and gas is decreasing, but most forecasts recognise that these resources will be part of the energy mix for decades to come. Oil and gas provide 73% of the UK’s energy, and projections show

In the 12 months since the landmark North Sea Transition Deal was signed, the UK oil and gas industry has made strong progress towards delivering on its ambitious commitments, says Mike Tholen at Offshore Energies UK

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North Sea: Oil and Gas

2 1 34 5 Carbon capture and storage

Supply decarbonisation

North Sea emissions are down by 10% since 2018 The Oil and Gas Authority’s electrification competition awarded a total of £1m to three different studies Methane Action Plan launched

5 key commitments between industry and government: Progress to date

that they could still be needed for around 20–25% of the UK’s energy in 2050. We can do a lot to meet that demand by producing clean and reliable energy from our own resources in the North Sea. We know that it will take some time for renewables and other low-carbon energies to get to the stage where they can replace oil and gas. If we stopped producing oil and gas, we would have to import more energy – with a higher carbon footprint and a greater cost to the UK economy and jobs. And energy price increases are something we have all become painfully aware of in recent months.

IMAGE: ISTOCK

Delivering net zero and energy security The North Sea Transition Deal covers five key areas: CCS, hydrogen, supply decarbonisation, people and skills, and supply chain transformation. Together, these build on the UK’s global strength in offshore oil and gas production, and they seek to maximise advantages for the sector from the global shift to growing cleaner energy. For CCS, we are playing to our strengths. We are using our expertise to

Two ‘Track 1’ CCS projects – East Coast Clusters and Hynet – have been selected to be up and running by the mid-2020s Cluster plans are being developed Industry technical standards for CCS storage are being developed and shared

Hydrogen

BEIS’s Hydrogen Strategy released Hydrogen projects are developing, including the Hydrogen East Coast Cluster, with additional opportunities from Hynet, Scottish Clusters and the SNS Hydrogen hub

government’s consultation for the Climate Compatibility Supply chain Checkpoint. This will add A Supply Chain Champion rigour and transparency to has been appointed any future exploration A supply chain strategy is rounds, ensuring they being developed are justified in the Mapping of supply chain context of net zero. capability, capacity We are also advancing together with visibility of plans to power offshore opportunities platforms with electricity rather than gas turbines to reduce emissions further.

UK expertise

Our unique and world-class supply chain is key to the The OPITO-led Energy NSTD. By developing Skills Alliance is developing engineering services, an integrated workforce manufacturing and plan and forecast technology expertise to support the energy re-use depleted oil transition, we can and gas reservoirs and create a globally develop aquifers for competitive energy supply CO2 storage. We are chain of international repute with great export potential. adapting existing North Sea ‘People and skills’ is the fifth infrastructure such as NSTD theme, as our expertise will be pipelines and gas plants to allow the UK essential for realising the new to compete at scale in an exciting market. opportunities to be had in the evolving Building that expertise using our North Sea integrated energy mix. We aim to sustain heritage will enable us to help large parts highly skilled jobs and bring new energy of UK industry and society eliminate their businesses to develop local regions, CO2 emissions, too. including North-East Scotland, Teesside Hydrogen has significant potential to and the East of England, and to create tens provide a viable low-carbon alternative of thousands of jobs in the UK’s industrial for heating, heavy industry heartlands. We must create a more diverse and transport. We are and inclusive workforce if we are to achieve beginning to see some of that goal, as we work together with the our members undertake broader offshore energy community to exciting initiatives here. achieve a carbon-neutral basin by 2050. We are investing in cleaner production of oil and gas to decarbonise our Towards a net-zero basin energy supply, and are As a transformational agreement, the focusing on reducing the NSTD aims to deliver a number of clear emissions generated by the outcomes by 2030. These include extraction, processing and unlocking up to £16bn in investment transporting of oil and gas. during the next decade in crucial lowWe have pledged cuts of carbon solutions, cutting UK emissions 50% by 2030 and 90% by by 60m tonnes – equivalent to taking 2.5m 2040, with the aim of cars off the road – and reducing 15m tonnes becoming a carbon-neutral from industry production. basin by 2050. In support of this, we By Mike Tholen, Sustainability Director, contributed to the OEUK

People and skills

By 2030, the deal seeks to unlock up to £16bn of investment, secure up to 40,000 energy jobs and reduce emissions by up to 60m tonnes

www.the-eic.com | energyfocus

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33

11/03/2022 08:59


Power Floating energy hubs

Floating an idea for fossil-free platform power Innovative thinking is needed on the path to decarbonising the offshore oil and gas sector, writes Wärtsilä’s Tim Burnett

C

an the North Sea become a net-zero basin by 2050 while maintaining energy security? It is a tricky balancing act for UK oil and gas, but last year’s landmark North Sea Transitional Deal (NSTD) between government and industry is helping tackle the challenge. Through the deal, the sector has committed to cut emissions by 10% by 2025, 25% by 2027 and 50% by 2030, against a 2018 baseline. The net reduction should rise to 90% by 2040 and 100% by 2050, bringing the sector to net zero.

Getting to net zero Some North Sea operators are already taking steps to future-proof operations and optimise asset performance by deploying the latest digital technologies, machine learning, artificial intelligence and remote support. In its latest update on NSTD progress, Offshore Energies UK (formerly OGUK) reports that carbon emissions from the UK Continental Shelf (UKCS) are down by 10% since 2018 – half of which is a direct result of action

taken by oil and gas operators. However, it is evident that a 50% reduction in carbon emissions – and, ultimately, net zero – will require more dramatic change.

Tackling power is key For production platforms, the main contributor to emissions, apart from flaring and venting, is the power generation process. According to the Oil & Gas Authority, power accounts for around two-thirds of oil and gas production emissions. The gas turbines or diesel generators that typically power offshore platforms are fuelled either by gas from the well or bunkered marine diesel oil. Not surprisingly, then, operators are considering electrifying their platforms.

Figure 1: Floating towards net zero The floating energy hub uses local wind power for the bulk of the electricity required, with back-up power generated from carbon-neutral or zero-carbon smart gensets, supported by hybrid batteries for a fast response

Advancing platform electrification Whether platforms can be electrified by shore connection or using offshore renewable sources is the subject of much debate. However, one certainty is that full electrification of individual North Sea installations will require expensive power cables to be laid. And for some installations, the prohibitive expense will make decommissioning a genuine consideration. At Wärtsilä, we recognise that the pace of emissions reduction will accelerate as technology advances and our vision of the future evolves. For this reason, we believe that platform electrification can happen both cost-effectively and well ahead of net-zero targets.

With a floating energy hub, platform electrification can happen both costeffectively and well ahead of net-zero targets

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Floating energy hubs: Power

Powering installations using electricity, from a cable to the shore or from a nearby windfarm, could lead to a reduction of 2–3Mt CO2 a year – equivalent to the annual carbon emissions from households in a city the size of Liverpool Offshore floating energy hub One promising solution is to deploy floating wind turbines that can generate enough baseload to satisfy the energy demands of nearby offshore assets. This power is routed to a repurposed floating production storage and offloading vessel or similar stable floating structure, then redistributed to the installations as needed (see Figure 1). While wind power will generate the baseload, flexible four-stroke power generating sets (adapted to run on carbonneutral or zero-carbon fuels) will provide the flexibility, resilience and reliability needed for stable energy generation. Supplemented by a hybrid-battery system for fast ramp up, this combination turns the vessel into a floating energy hub ready to meet the power demands of the surrounding installations.

IMAGE: WÄRTSILÄ

Added value The floating power hub will not only reliably meet the energy needs of nearby assets, but as it is fully mobile, it can also be redeployed to other areas or regions when those requirements change.

Other benefits include low maintenance and upkeep requirements, as a permanent human presence is not required. The intention is for the hubs to be unmanned, with all control and monitoring activities transferred to an onshore control room using digital enablers that already exist. Enablers such as Wärtsilä Expert Insight, for example, which uses machine learning to enable better maintenance decisions, recognising anomalous behaviour before problems arise so that appropriate corrective action can be taken. Operated as a Normally Unattended Installation (NUI), there is no requirement for accommodation facilities or a helideck, although a safe refuge would still form part of the structure. By adopting NUI principles, maintenance will be carried out every six months, with the asset accessed by means of a walk-to-work facility. Centralising power generation in a floating hub means that surrounding oil and gas installations no longer need to commit resources to maintain their own power systems. Maintenance personnel

are freed up to focus on other areas, and the reduced need for maintenance interventions would likely improve safety and reduce associated costs. Fuel bunkering is concentrated in one central location, reducing the risk of environmental escapes.

Plans for the future Even more innovative developments are possible further into the future if we consider the production of green hydrogen to store the surplus energy that is produced from floating wind farms. However, it remains to be seen whether this would be an economical use of power at facilities dedicated to oil and gas applications. The technologies needed to make this happen are already in service, although not yet applied in this way in the oil and gas industry. Viable, affordable green power for offshore platforms is within reach if we work together. By Tim Burnett, General Manager, Market Innovation Oil & Gas, Wärtsilä www.the-eic.com | energyfocus

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35

11/03/2022 09:00


Nuclear Nuclear’s new glow

Is

nuclear back on the

table? Nuclear is back in the limelight and can no longer be dismissed as a viable and sustainable solution, says George Borovas at Hunton Andrews Kurth

T

he past few months have been remarkable when it comes to the prospect of seeing a wave of new nuclear build around the world. Romania has signed an agreement to build new reactors with the support of the US, and France has pledged to build as many as 14 new reactors from 2028. Meanwhile, the UK is backing plans for new nuclear power plants and has announced a new government-supported financing model for nuclear projects, the Regulated Asset Base. Poland, Estonia and Saudi Arabia have also been in the news with their ambitious plans to develop new nuclear power programmes, while the EU has classified nuclear power as a green investment under the EU Taxonomy for sustainable activities. There are even

announcements for new nuclear plants in the US. Are all these a sign of things to come, or will this be yet another ‘nuclear renaissance’ that is never realised?

Rising to the net-zero challenge Nuclear energy is one of the cleanest and most efficient sources of energy around, and could be a sustainable and relatively economical option for meeting growing global energy demand. In addition, nuclear energy outperforms many other lowcarbon forms of energy because nuclear power plants produce carbon-free electricity 24 hours a day, seven days a week while requiring comparatively little land and materials and producing low quantities of toxic waste. As a generation technology, nuclear has has some of the lowest life-cycle carbon emissions, and has been proven to provide affordable, reliable, scalable and safe power. At this point, nuclear power, along with hydroelectric and geothermal, are the only low-carbon technologies that have been proven to provide safe and affordable non-intermittent electricity.

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Nuclear’s new glow: Nuclear

IMAGE: ROLLS-ROYCE PLC

Nuclear today Today, nuclear power makes a significant contribution to electricity generation, providing approximately 10% of global electricity. According to the International Atomic Energy Agency, the world currently operates a fleet of 443 commercial nuclear reactors, with a total installed capacity of 393GW. Currently, 30 countries have already included nuclear power in their generation mix and have operational commercial nuclear reactors. In addition, there are 51 nuclear reactors currently under construction in 19 countries. SMRs and advanced reactors

The case for new nuclear

Emerging new small modular reactor (SMR) and advanced reactor (AR) designs offer promising solutions that may help to mitigate many of the financing and risk challenges that we have seen with earlier nuclear power projects. SMRs and ARs are expected to have greater simplicity of design, economy of production (largely in factories), shorter construction times and reduced siting costs. Most are designed for a high level of passive or inherent safety, reducing the need for additional safety structures and large emergency protection zones. In addition, SMRs and ARs are suitable for areas and applications that are poorly suited to large nuclear power plants, such as small islands and areas with limited access to cooling water, countries with small grids, or other energy-intensive applications, including mining.

The world can meet only 39% of its electricity demand through low-carbon generation sources, and carbon-intensive fossil fuels currently meet the remaining 61% of existing demand. As the global population continues to grow, so will the need for power generation and energy. Accordingly, a range of technologies, including nuclear power, will be needed to provide clean energy transitions around the world – and while renewables will continue to lead, it will also be necessary for nuclear power to play an important part. So, it appears that, for good reason, nuclear is indeed back on the table. By George Borovas, Head of Nuclear and Managing Partner, Hunton Andrews Kurth Tokyo

Is the tide turning for nuclear? New global nuclear projects France has pledged tens of billions of state support to build up to 14 new generation reactors and a fleet of smaller nuclear plants. The plan is to order six new-generation EPR2 reactors from EDF, while launching studies for eight more The US announced a US$25m Nuclear Futures Package and will partner with Brazil, Indonesia, Kenya, Poland, Romania and Ukraine, among others, to support progress on meeting their nuclear energy goals The UK awarded Rolls-Royce £210m to pursue design and regulatory approval of SMRs in the UK Westinghouse Electric Company and Energoatom, Ukraine’s state-owned nuclear utility, signed a contract to develop the first AP1000 unit in Ukraine The US’s NuScale Power and Romania’s national nuclear company Nuclearelectrica have announced an agreement to build the first SMR in Europe Polish companies Synthos Green Energy and PKN Orlen signed an agreement to establish a joint venture for the deployment of a SMR fleet in Poland, which will commercialise SMR technology – in particular, GE Hitachi Nuclear Energy’s BWRX-300 Ontario Power Generation will work with GE Hitachi Nuclear Energy to deploy an SMR at the Darlington new nuclear site in Canada

(Left) A visual representation of how SMRs designed by Rolls-Royce could appear

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EIC Member Focus Cargostore

MY BUSINESS

Andrew Hart Cargostore Worldwide ldwide Can you tell us a little about Cargostore? The company began back in the 1990s, providing bespoke containers to the UK military, construction sites and the type of storage that you see on building sites. We still maintain that division, but our recent focus has been the expansion into the offshore sector. Around a decade ago the organisation saw the opportunity in DNV standard shipping containers, the Norwegian gold standard for safety for cargo carrying units, and moved into that sector. However, it wasn’t all smooth sailing and Cargostore entered a period of financial difficulty before my predecessor identified the problem, took the company by the scruff of the neck and completely turned its fortunes around. What does Cargostore do? Our signature product is the DNV unit, always bright green and instantly recognisable as Cargostore. The key features of a DNV unit are the lifting points that have pad eyes, which means when our units are lifted, they’re lifted with a system that cannot fail. They’re highly certified, even during the manufacturing process, and are all created in one piece so they can’t break or snap off. On top of that, we have the largest fleet of DNV reefers globally, and it’s now what we’re known for in the market. We support a variety of industries, from refrigerated catering all the way through to transporting massive equipment, and repairs and maintenance operations. Our business is now 80% offshore, and of that, a good 60% is offshore wind – we’ve been there since the very beginning. We’re known as ‘the wind guys’ and are at the forefront of it, but that’s not to say

offshore DNV refrigeration units and the offshore wind sector. Since I joined, we’ve been busy and have completed a full company rebrand, as well as revamping our IT systems and structures, which gives us much more clarity in our decision-making processes and provides our clients with a more data-driven service so that they can get better access to information in real time. We’ve entered the Mozambique market, our first strategic move into the mining sector, and also opened in Mexico and Taiwan, with France soon to follow.

CEO Andrew Hart takes Energy Focus behind the scenes at Cargostore we’re ignoring oil and gas – Abu Dhabi and the Middle East have been key to our growth and development. You became CEO in 2021 – how has your first full year at the helm been? I joined the business in September 2020 as Vice President of Offshore, as part of a transitionary plan to become CEO in February 2021, organising the division ready for growth. It has been a lot of fun, but also very challenging, simply because the whole global business scene and sector has been challenging. However, we’re bouncing back from the worst oil price crash in decades, and from Covid-19. We’ve shaken up the business and managed to get a few building blocks in place for future growth as part of a pretty robust three-year strategy to deliver the shareholder value that our owners are looking for, and to maintain our position as the bestknown provider for

Why did you rebrand, and how does it tie in with your strategy going forward? There were a couple of reasons. Firstly, the navy blue and yellow colours felt quite old-fashioned and were introduced back in the 1990s when the company was servicing a different sector. Our DNV units are famously being bright green, so we took this colour and made it our flagship colour, creating a more seamless process with our logo and all marketing collateral. The logo also reflects our core product, with the pad eye, the DNV component that we’re well-known for, incorporated. Overall, it has a much cleaner, crisper and more modern feel. Not too corporate, but professional. We’re also in an exciting place in the company’s history – we welcomed new owners in 2020 and wanted to create something that the whole team could get behind. It was an opportunity to engage with staff while launching a brand new strategy, and what better way to do that with an all-new brand?

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AssetMap

EICAssetMap

Australasia Join us

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