Energy Focus Summer 2017

energyfocus

ISSUE 28 SUMMER 2017

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

INSIDE

VIEW FROM THE TOP Atlantis Resources CEO Tim Cornelius talks MeyGen and global tidal power

BREXIT Routes to success as the UK leaves the European Union

OIL AND GAS Premier Oil’s Russell Dandie on making the UKCS viable

Building the next generation of engineers: As the energy sector struggles to bridge the gender gap, we ask how can we encourage more women to consider a career in the industry?

MY BUSINESS Behind the scenes with EIC member Blaze Manufacturing Solutions

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Contents ISSUE 28 SUMMER 2017

06

FROM THE EIC 5 Foreword

From the Chief Executive

6 View from the top Tim Cornelius, CEO of Atlantis Resources

10 News and events Updates from the EIC

14 The big question

We ask members: How can we encourage the next generation of energy workers?

16 Special report: Engineering the future

David Nicholson searches for solutions to the energy industry’s gender imbalance

20 Making a success of Brexit

Jeremy Bowden reveals the routes to success

54 My business

Ann and Howard Johnson, Blaze Manufacturing Solutions

Tim Cornelius

OIL AND GAS 26 Unlocking North Sea potential

39 Gas to wire

A natural fit for Brazil’s energy system. Gabriel Cavados, Senior Developer Energy Solutions, Wärtsilä Brasil

16

Q&A with Russell Dandie, Global Supply Chain Manager, Premier Oil

The energy gender gap

28 An industry shaped by mergers and acquisitions

Matthew Graham, Director of Investment Banking – Energy, Simmons & Company

20

33 Indonesia: Reforms fuel new opportunities Dinar Indriana Khoiriah, Managing Partner, Alefstrata

Routes out of Europe

34 Oil & Gas Asia 2017

The gateway to South East Asia

44

Get Fit For Nuclear

US offshore wind

Should you wish to send your views, please email: info@redactive.co.uk

Andrew Storer, Managing Director, Nuclear Advanced Manufacturing Research Centre

46 Turkey pushes on with nuclear ambitions The country’s nuclear new-build programme is under way

RENEWABLES 48 US offshore wind spins into life

Amisha Patel, Head of Power, Nuclear and Renewables, and Public Affairs, EIC

48

Chief executive: Stuart Broadley

Can UK business turn market scale into opportunity?

Kelly Butler, Deputy CEO and Marketing Director, BEAMA

44 Oil and gas suppliers get Fit For Nuclear

A step closer to exploratory drilling. Francis Egan, CEO, Cuadrilla Resources

89 Albert Embankment, London SE1 7TP Tel +44 (0)20 7091 8600 Email info@the-eic.com

41 India gets smart

NUCLEAR

31 UK shale gas

The Energy Industries Council

POWER

53 Exporting worldleading marine energy expertise

Interview with Eileen Linklater, Commercial Manager at EMEC

Editors Sairah Fawcitt +44(0)20 7880 6200 sairah.fawcitt@redactive.co.uk Edward White +44(0)20 7091 8638 edward.white@the-eic.com Publishing director Aaron Nicholls Production Rachel Young Senior designer Gary Hill Design studio manager Claire Echavarry

For sales and advertising please contact Tim Cariss +44(0)7759 463456 tim.cariss@redactive.co.uk Energy Focus is online at the-eic.com (members and subscribers only) ISSN 0957 4883 © 2017 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 17 Britton Street London, EC1M 5TP Tel: +44(0)20 7880 6200 www.redactive.co.uk

www.the-eic.com | energyfocus

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Foreword Stuart Broadley CEO

From the Chief Executive: In this edition we explore possible alternative Brexit scenarios and the implications for the supply chain, as well as highlighting a pressing question facing the industry today: how to create the next generation of energy workers?

Welcome back to a new and improved Energy Focus. As our regular readers will know, we’ve taken a brief pause to redesign our flagship industry magazine.

As you see it’s looking better than ever. You’ll also be happy to know that Energy Focus is now going to be published four times a year instead of two, so we’ll be able to keep you up to date on emerging trends and industry news more than ever before.

The work we’ve done on Energy Focus is just one of the many EIC developments taking place. On page 10, you’ll find a round-up of some of our other exciting activities, such as the first-ever EIC Connect Oil & Gas USA event in Houston in October, our newly launched line of EIC Country Reports and our acclaimed Survive and Thrive Insight Report, which identifies the strategies 26 EIC member companies have put in place to flourish even during the downturn.

It was great to hear one of our partners, Nuclear AMRC, mentioned on more than one occasion during the Survive and Thrive interviews. Their Fit For Nuclear (F4N) programme was used by two of the participating companies to successfully diversify from oil and gas into nuclear.

To find out more about the F4N programme and how it supports companies to expand into the nuclear sector, turn to page 44 where you’ll find an article written

by Nuclear AMRC’s Andrew Storer.

In addition to diversification, other key strategies being used by the companies to thrive are collaboration and innovation.

Premier Oil’s Russell Dandie explores how these two strategies are making UKCS

operations viable on page 26.

Mergers and acquisitions are becoming more and more common in the O&G industry, a recent high-profile example being Wood Group’s proposed purchase of Amec Foster Wheeler. Matthew Graham, Director of Investment Banking – Energy, Simmons & Company International takes a look at the impact these mergers are having on the supply chain on page 28.

Looking beyond our own shores, Donald Trump’s lack of enthusiasm for renewables (or renewables obligations at least) hasn’t dampened offshore wind developers’ appetite for the US market in the slightest.

As this region continues to ramp up, EIC Head of Power, Nuclear and Renewables and Public Affairs Amisha Patel explains how UK companies can break into this emerging and potentially massive market (page 48).

Our View from the Top section has always been one of the most popular features of Energy Focus and we always manage to attract big-name interviewees. I’m very pleased to say that this issue is no exception with Atlantis Resources CEO Tim Cornelius taking time out of his busy schedule to speak to us (page 6). I’ve followed with great interest the MeyGen tidal array development, so it’s very exciting to get a behind the scenes view of this project as well as the inside word on the company’s future plans.

Also as part of our Energy Focus relaunch, in each issue we’ll be tackling the big issues facing the energy industry.

In this edition we explore possible alternative Brexit scenarios, the implications for the supply chain and how companies can make a success of Brexit (page 20).

We also highlight a pressing question facing the industry: how to create the next

generation of energy workers. We commissioned a special report by David Nicholson (page 16), as well as putting the question to four EIC member companies: Balmoral Offshore Engineering, Global Energy Group, PJ Valves and TTE in a new section: the Big Question (page 14).

Another new section we’ve created is My Business (page 54), where we find out what makes EIC member companies’ tick. We kick off this new feature by catching up with husband-and-wife team Howard and Ann Johnson at Blaze Manufacturing Solutions – winners of the 2016 EIC Supply Chain Break Through Award. For details on this year’s EIC National Awards Dinner please turn to page 13.

I hope you enjoy your refreshed Energy Focus. Please do let me know what you think about its new look and any ideas you have for future articles.

Stuart Broadley EIC CEO stuart.broadley@the-eic.com

www.the-eic.com | energyfocus

5

From the EIC Q&A Tim Cornelius

View from the top Q&A: Tim Cornelius CEO Atlantis Resources

It’s our intention to deliver the first gigawatt of tidal stream. Cost is coming down all the time and the best sites in the world are yet to be developed 6 energyfocus | www.the-eic.com

Q&A Tim Cornelius: From the EIC

Energy Focus meets Tim Cornelius CEO of tidal power giant Atlantis Resources, the developer behind the groundbreaking MeyGen tidal array project being built in the Pentland Firth, Scotland To start off, could you give our readers some background on the MeyGen project?

MeyGen’s 400MW capacity makes it the world’s largest tidal stream project. It’s effectively leading the way both in best practice, technology advocacy and the introduction of the mainstream investment community to tidal stream. With respect to the community in and around Caithness, it’s very important because it provides alternative employment to the declining oil and gas sector, which also means there’s no skills shortage for us.

What does the completion of Phase 1A mean for the UK and the global tidal industry?

We’ve demonstrated the ability to build a multi-turbine array on time and to budget, and introduced more traditional sources of finance into the tidal stream sector. Lower cost of funding is ultimately the Holy Grail for project developers. It also provides evidence that after 10 years of research and development the UK industry has entered full-scale commercialisation – opening up commercial opportunities in France, South Korea, Indonesia, Canada and elsewhere.

What’s the latest on the project?

MeyGen Phase 1A has almost completed commissioning, and will begin autonomous operation shortly. The turbines began exporting power to the grid in March when we received our full Ofgem accreditation for Phase 1A and qualified for Renewable Obligation Certificates.

What lessons have you learnt from Phase 1A that you’ll apply to Phase 1B? Numerous lessons, not least of which is that, against expectations, we are able to work on these projects throughout the winter months. We have proven that jack-ups can be used in high flow environments, so we can now revert to using drilled monopiles, which are a much lower cost than the large gravity-based structures used on Phase 1A. We have experience of grid connection and have shortened the deployment process.

How have the turbines performed?

Both the Andritz and Lockheed Atlantis turbines have exceeded generation expectations. We’re very happy with capacity factors exceeding 44% – it’s an outstanding result.

When will Phase 1B start and what funding are you getting?

We expect construction to start by the end of this year. We’re getting €17m from NER300, €20m from Horizon 2020, both of which are EU funding programmes, and up to a further €10m from the European Investment Bank (EIB).

How can the supply chain help reduce the cost of tidal development?

The supply chain has already responded to requests for cost reduction from the offshore wind industry, and so it’s in pretty good shape. Lower sterling, steel prices and vessel rates due to the oil and gas downturn, have made the supply chain even more competitive. For us, it’s just a function now of reducing the number of cables. Putting multiple turbines on single cables rapidly reduces cost, as does the use of larger rotor blades.

After Phase 1B, what’s the timescale for 1C and 2 and 3?

1C is as far as we’re looking currently, and that’s imminent. We’re applying for a Contract for Difference (CfD) and as soon as it’s received we’ll progress to financial close. We would expect to be delivering as per the CfD window in either 2020 or 2021.

Do you think there are any gaps in the supply chain that need to be filled?

There are always gaps. More steel rolling capability in the UK for monopiles. And probably a more efficient, or at least a dedicated facility, for the manufacture of turbine blades. At the moment, it’s still a very manual process and more automation there would help.

About Tim Cornelius Having joined Atlantis Resources Corporation in 2006, Tim Cornelius is credited with growing the company into one of the world’s leading tidal power developers with a global project pipeline spanning Europe, Asia and North America.

He is currently on the board of Ocean Energy Europe and was recently recognised for his outstanding contribution to the promotion of tidal energy by the Society for Underwater Technology at All-Energy 2017.

Tim has a BSc in Marine Biology from Flinders University, an MBA from Bond University and remains a fully certified submersible engineer, ROV pilot and commercial diver. In his spare time Tim enjoys downhill skateboarding.

www.the-eic.com | energyfocus

7

Q&A Tim Cornelius: From the EIC

Valley tidal barrage, we are looking at offshore wind projects, pumped storage and interconnectors. We’ll be investing our own capital in some projects, but also managing some money on behalf of others.

Gamechanger for renewables MeyGen’s tidal energy project in the Pentland Firth is Europe's largest tidal power project and the world's first commercially funded tidal array Test programmes at the Orkney-based European Marine Energy Centre played an important role in the evolution of the AR1500 and Andritz Hydro Hammerfest devices Eventually 269 turbines will be installed on the MeyGen project site, producing 400MW – enough to power 175,000 homes and support more than 100 jobs With the predictable and cyclical nature of tidal generation, there is a unique opportunity for other renewable energy projects to share the limited local grid access available when the MeyGen project is not generating at maximum output

What are your priorities when engaging the supply chain and how can companies get involved with your projects?

We always try to maximise local content. But then there is price and terms of trade. Proactive engagement by the supply chain, where they have a vested interest in the project, is a strategy we’re actively pursuing. Of course, we still issue tenders, and anybody interested should contact the procurement team in our Edinburgh office.

2017 is an election year, do you see any risks to the sector at this point?

No, I think the sector has already taken as many shocks as it could possibly take. We’ve had very good election results in France and in South Korea recently.

Right now, we receive tremendous support from the Scottish government, and we don’t expect that to change.

Are you concerned about Brexit? Will it impact on European funding for your project?

It doesn’t affect any European funding for Phase 1B. However, losing access to the EIB, which is traditionally a low-cost source of finance, is going to be a big problem, not just for MeyGen, but for all similar projects in the UK in the medium-term.

Can you explain the reasoning behind the formation of Atlantis Energy and its move into non-tidal stream renewables?

It’s market pull – potential investors and developers were approaching us.

By creating Atlantis Energy, we will diversify our generation and customer base. In addition to the Wyre

How are your plans progressing overseas, in particular regarding Hyundai and South Korea?

The South Korean market is probably the most mature tidal power market in the world and therefore we want to be involved. Establishing a strategic relationship with Hyundai effectively allows us to enter the market. In return, we are well positioned to help Hyundai access markets elsewhere.

In Indonesia, we are developing a project with SBS International in the Lombok Strait near Bali. France is also a serious area of focus for us, as are Canada and China.

Is there anything these governments can do to accelerate development of the industry?

Just stable policy and clear pricing. We haven’t enjoyed that unfortunately in the UK, but in other countries, long-term tariffs for large-scale projects give investors the confidence to make the long-term investment decisions necessary.

Atlantis Resources Atlantis Resources is a vertically integrated marine power project developer and tidal equipment manufacturer. Its turbines have generated more than 10,000MW hours of electricity in open water conditions, and it has the world’s largest portfolio of sea-bed leases for tidal flow projects. The company was founded by Michael Perry in 1996 and is headquartered in Singapore.

What are your longer-term aims?

It’s our intention to deliver the first gigawatt of tidal stream. Cost is coming down all the time and you’ve got all the best sites in the world yet to be developed. Once a track record is established we should see a spurt of development. We’ll be focusing on larger projects, from 200MW up.

Atlantis project portfolio by construction date Project

Location

Capacity Date of (MW) construction

Date of CAPEX (£m) commission

MeyGen Phase 1A

UK

6

2015

2017

MeyGen Phase 1B

UK

5.1

2017

2018

41

MeyGen Phase 1C

UK

75

2019

2021

203

MeyGen Phase 2&3 FORCE Daishan Sound of Islay Indonesian Archipelago

51

UK

312

2022

2028

686

Canada

4.5

2018

2018

25

China

1

2018

2018

4

UK

10

2018

2019

70

Indonesia

12

2018

2020

95

India

250

2018

2026

690

Ness of Duncansby

UK

100

2020

2023

400

Brough Ness

UK

100

2020

2023

290 320

Mundra

Indonesian Archipelago

Indonesia

138

2020

2024

Mull of Galloway

UK

30

2021

2023

90

Strangford Narrows

UK

20

2021

2023

60

Portland Bill

UK

30

2021

2023

90

Strangford Lough

UK

1.2

2008

2008

17

Source: Atlantis Resources, Macquarie Research, February 2017

www.the-eic.com | energyfocus

9

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 Worldwide business support

Helping members to expand into markets across the globe

About the EIC Established in 1943, the EIC is the leading trade association for UK-registered companies working in the global energy industries.

Our member companies, who supply goods and services across the oil and gas, power, nuclear and renewable 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.

We do this in a variety of ways: 10 energyfocus | www.the-eic.com

Market insight

Helping members to track global energy projects Our projects database, EICDataStream, provides extensive information on over 7,500 active and future projects in all energy sectors. By tracking full project life-cycles from feasibility to construction and then completion, it helps members to identify opportunities and plan their business development strategies.

High-profile international events

Connecting members with buyers and enhancing knowledge The EIC hosts flagship industry events that bring together UK supply chain companies with global energy contractors and operators, and bespoke events that keep members informed about projects, sector developments and markets.

Our overseas trade delegations and EIC-run pavilions at international exhibitions introduce members to regional energy markets and their major players.

Member companies who want to do business outside the UK can rely on our global network of offices to provide regional market knowledge, one-to-one advice and practical support. We also provide virtual and rental offices, and facilities for hot-desking, meetings, conferences and corporate events.

Business intelligence Keeping members informed and raising their profile

We help our members to stay connected with the world of energy through informative online news, e-bulletins, market reports and industry publications.

Our comprehensive directory of member supplier services is also a useful resource for operators and contractors.

Industry courses

Trusted training delivered by energy experts Our quality courses, which can be delivered off-site or in-house, are led by highly experienced trainers with industry backgrounds. We tailor our training to suit a variety of levels and also work with member companies to run programmes, some of which include tours to manufacturing companies.

From the EIC News and events

Survive and Thrive Insight Report

EIC Country Report: South Africa

Our special Survive and Thrive Insight Report identifies the strategies that 26 EIC member companies of all sizes and sectors have used to grow and prosper in spite of the downturn.

The savings and new orders won by these organisations through their survive and thrive strategies, normally from just one or two customers each, come to well over £550m.

These strategies are proven and there’s no reason why they can’t work for your company too.

Make sure you’ve got your copy of the report – it could make a big difference to your business.

Are you thinking about making South Africa the next destination for your business? If so, this report is essential reading.

This is the first in our new range of EIC Country Reports which will give you all the information you need to decide whether or not a country should form part of your organisation’s export journey.

It thoroughly explores the state of South Africa’s energy industry, identifying the major current and future projects across all sectors. It will also introduce you to the key players in each market.

The report assesses the impact of political, economic and social factors on doing business as well as providing essential information for setting up a company in South Africa.

EIC members can download the report free of charge by logging into EICDataStream. If you’re not an EIC member please contact edward.white@ the-eic.com to buy your copy of the report.

W NEORTS P E L RE NOW B LA I A AV

The EIC Country Report: South Africa is available free of charge to EIC members and for purchase by nonmembers, please contact Amisha Patel, EIC Head of Power, Nuclear and Renewables, and Public Affairs for more information and to buy your copy: amisha.patel@the-eic.com

This is the first in our new range of EIC Country Reports which will give you all the information you need to decide whether or not a country should form part of your organisation’s export journey

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From the EIC News and events

EVENTS COMING UP

from Trafalgar Square, this Grade II listed hotel is the setting for many of the capital’s most glamorous red-carpet events.

Overseas delegation to Iran

EIC Connect Oil & Gas USA

When: 3 October 2017 Where: Norris Conference Centers, Houston Why attend? EIC Connect events bring together supply chain companies with major contractors and operators to explore how they can work together on current and future projects.

We already run EIC Connect events in the UK and the UAE. Now, for the first time, we’re taking this incredibly successful format to the very heart of the global energy industry: Houston.

Up to 20 leading oil and gas companies are set to take part in this high-profile event which will include operator and contractor briefings, an exhibition and a conference programme covering the current and future challenges and opportunities specific to the North and Central America region.

As well as providing updates on their projects during the briefing sessions, the participating operators and contractors will also be taking part in private one-to-one meetings with delegates to discuss their supplier requirements, procurement procedures and how they can work together on projects in the region.

The event will close with a Best of British networking reception with speakers, delegates, exhibitors and sponsors getting together over drinks and canapes. Don’t miss this valuable opportunity to engage with decision makers and buyers who are at the centre of global oil and gas project decision making.

When: 11 – 13 September 2017 Why attend? Since the partial lifting of sanctions last year, Iran is back on the global energy scene.

Iran has abundant resources: 158bn barrels of crude oil and 1,201tn cubic feet of natural gas, and now with new partner friendly contracts being rolled out and its financial system being updated, this massive market is ready to do business again.

This delegation is the perfect way to find out about the Iranian market and decide if it’s a good fit for your company. During your time

For more information and to book your place: www.the-eic.com/ EICConnect/OilGasUSA.aspx

The EIC National Awards Dinner

When: 12 October 2017 Where: 8 Northumberland Avenue, London Why attend? Enjoy an elegant evening in the company of fellow energy industry professionals with a first-class menu and A-list entertainment from Channel 4’s Jimmy Carr while celebrating the incredible

in Iran with the EIC you’ll meet lots of senior industry decision makers and potential local partners as well as learning about the key players’ procurement processes and local content laws.

As Iran opens up to foreign investment, this delegation is your fast track to the front of the queue.

This dinner and celebration is available exclusively to EIC members and their guests, with tables of 10 or individual places available: www.the-eic.com/Events/ EICNationalAwardsDinner.aspx

Please visit www.the-eic.com/ Events/OverseasDelegations/ OverseasDelegationtoIran.aspx for full details and to reserve your spot – spaces are limited.

Training: Bidding to Win – How to Beat the Competition without Cutting Prices

achievements of the UK supply chain in truly spectacular surroundings.

The EIC National Awards Dinner 2017 will take place in one of London’s most iconic and central venues: 8 Northumberland Avenue.

Located only a stone’s throw away

When: 16 November 2017 Where: EIC London office Why attend? Writing bids and proposals can be stressful, requiring considerable time and resources to meet the response time frames.

Unfortunately, there is no fast-track solution to winning work. Companies that take the easy way out, by recycling previous responses and attaching standard documents, are seldom successful.

The reality is that it’s a time-consuming exercise.

But tendering is usually where the big opportunities lie and one tender win can make the difference between a flourishing and a dwindling business. So it’s worth investing in the process.

This course focuses on key concepts from careful evaluation and incorporation of customer requirements to successful management of the entire bid process. You will learn useful techniques to justify higher pricing and ensure your proposal beats that of your competitors.

For more information on this and other EIC training courses please visit: www.the-eic.com/Training/ TrainingSchedule.aspx

www.the-eic.com | energyfocus

13

From the EIC Members’ comment

The

BIG question

How can we encourage the next generation of energy workers?

With fewer graduates and qualified apprentices entering the energy market, making the industry more attractive to talented millennials is now more critical than ever. But how can we gain the new faces we need?

Energy Focus puts the big question to four members

Raff Celentano Business Development Director at Global Energy Group Out of necessity, many oil and gas related companies have moved into other energy sectors to balance their portfolio.

This has provided a level of security and interest which supports the retention and development of people. This trend needs to be maintained to encourage people to join an exciting and interesting industry rather than a specialist sector.

With this in mind a new industry structured training and development programme should be developed with partnerships/collaboration between companies and education centres.

At a company level, engineers, for example, must be encouraged to work closely with fabrication and construction companies to provide a deeper knowledge and experience of their work i.e. from paper to site.

To encourage people to undertake engineering at university and for existing engineers to feel valued, the status of

14 energyfocus | www.the-eic.com

engineers has to be elevated to a professional level and recognised accordingly as for a legal or medicine degree.

The important connection with universities needs to be re-established as it serves two purposes. First, for the research of new technology and processes that can be utilised within the industry, keeping it fresh and exciting. Second, is that it provides potential graduates an opportunity to work alongside the industry.

Finally, the government has an important role in the future of the industry. We need a clear energy strategy paper which would provide clarity and a level of assurance for the companies and industry as a whole in which to invest in the future and in its people.

Based in Scotland and working worldwide, the Global Energy Group is a highly successful, award-winning energy sector service group.

Global Energy’s business proposition is to make its customers’ assets more profitable by reducing risks in construction and reducing asset downtime through effective integrity and maintenance solutions.

Dan Munro Group Managing Director at PJ Valves The next generation of oil and gas engineers are very bright, but they sometimes lack ‘mud on the boots’ experience, which can mean project procurement doesn’t always run as smoothly as possible.

Project specification workshops run by senior engineers or expert partner vendors would be beneficial to fast track knowledge transfer to this new workforce. Importantly, it would mean that the most common points where specifications are open to conflicting interpretations could be ironed out before projects even begin.

PJ Valves manufactures and supplies specialist valves for oil and gas projects and applications globally. Its product range meets complex specifications for major international end users.

Members’ comment: From the EIC

Steve Grant Managing Director at TTE Companies from within the energy industry should be looking to raise their profile to attract the next generation of workers by pro-actively participating and showcasing the potential career opportunities at schools and open events.

This can be further enhanced by engaging with a high quality, reputable training provider who can provide professional information, support and guidance to both the employer and the potential recruitee.

Also, by utilising the government’s Apprenticeship Levy organisations within the energy industry can address skills shortages and re-skill and develop their existing workforce or new entrants through maximising training resources and placing STEM apprentices at the heart of their workforce development.

Providing opportunities to develop and progress will help to motivate and retain employees and their knowledge within the business; this is particularly true of apprentices. Investing in apprentices and developing a skilled workforce for the future will enable your business to succeed.

TTE is the leading technical training provider in the UK, specialising in the delivery of technical training and consultancy services globally. Based in Middlesbrough, TTE has strong local and global links with companies operating in the oil and gas, manufacturing, engineering, utilities, pharmaceutical and petrochemical industries.

Steve Gibbs Group Public Relations Manager at Balmoral Offshore Engineering The energy industry, from renewables to oil and gas, offers wide and varying career opportunities that often come with an international flavour. Encompassing everything from

science, technology and engineering to sales, marketing, finance and HR these skills are in demand from the sector worldwide.

We have to differentiate the industry from alternative options and one of the best ways to do that is to highlight the international opportunities available for young people.

I read somewhere recently that 75% of pupils studying at primary schools today will be in jobs that haven’t even been conceived of yet so there’s lots of work to do and it should start as early as possible.

Of course another attraction is the higher than normal salaries offered by the industry.

These salaries are offered because the industry needs the best people and though the sector isn’t for the faint-hearted, it is a great space to be in for ambitious and driven individuals.

Once we have attracted new entrants to the industry and invested in them it is important that we retain those people. To do this effectively you need to provide great

leadership and a clear career path.

Employees have to be given responsibility for their decisions and actions and it can often be difficult for more experienced personnel to ‘let go’ of functions they have carried out for many years.

Without a commitment to staff development there is a danger that the industry will find itself bereft of talented leadership in the years ahead.

Balmoral Offshore Engineering provides industry-leading composite and polymer solutions for the subsea and deepwater sectors.

Laboratory, hydrostatic and mechanical testing facilities enable Balmoral to research and develop cost effective materials across a spectrum of applications. Products include distributed buoyancy, thermal insulation, surface/ subsurface buoyancy, elastomer cable protection, bend restrictors and stiffeners.

HOW CAN WE FIX THE SKILLS SHORTAGE?

Bridging the skills gap across the energy industries: What global hiring managers say Targeting female workforce

Bringing retirees back

21% Oil and gas 13% Petrochemicals 27% Power 60% Nuclear 27% Renewables

22% Oil and gas 25% Petrochemicals 9% Power 0% Nuclear 5% Renewables

Graduates/ Apprenticeships

Targeting new industries

36% Oil and gas 44% Petrochemicals 73% Power 40% Nuclear 45% Renewables

Partnering with colleges/ education 38% Oil and gas 50% Petrochemicals 64% Power 60% Nuclear 45% Renewables

18% Oil and gas 13% Petrochemicals 0% Power 0% Nuclear 27% Renewables

Making changes to retention and recruitment 57% Oil and gas 69% Petrochemicals 64% Power 60% Nuclear 45% Renewables

Additional training and development 55% Oil and gas 63% Petrochemicals 72% Power 100% Nuclear 59% Renewables

NB hiring managers could offer multiple answers Source: 2017 GETI: Global Energy Talent Index (produced by Energy Jobline and Airswift)

www.the-eic.com | energyfocus

15

Special Report Energy gender gap

Engineering the future

Searching for solutions to the engineering gender imbalance 16 energyfocus | www.the-eic.com

Energy gender gap: Special Report

I

Recruiting women into the engineering sector has long been a tricky issue, plagued by misconceptions and stubborn traditions.

David Nicholson shares some of the latest thinking on how to attract women into the profession

f you were asked to name the world’s most famous engineer or energy industry pioneer then who would you pick? Brunel perhaps? Or you might say Max Steineke if you work in oil and gas, perhaps Enrico Fermi if you’re interested in nuclear power. But how many people would (or could) name a woman?

Perhaps it’s not such an easy task; after all, these examples are historical figures who readily spring to mind and come from a time when female engineers were few and far between to say the least.

So, where are the female pioneers today?

Well, the good news is that they do exist.

More and more women are taking their seat at the top table of global energy companies – Vicki Hollub, CEO at Occidental Petroleum and Lynn J Good, CEO at Duke Energy for example – and most Energy Focus readers will know or have heard of Angela Knight, former Director of Energy UK, or Dame Sue Ion, Honorary President of the Nuclear Skills Academy and former Chair of the Nuclear Innovation Research Advisory Board. Outside of the boardroom, it’s more common than ever before to see a woman marking out a building site or cubing up for a concrete pour.

ILLUSTRATION: OLIVER BURSTON

Things are changing, but how much?

‘Proportionately, things haven’t changed much,’ says Sarah Simpson, Operations Director for multidisciplinary Create Consulting Engineers, where she works alongside an energy team.

‘What has changed is the attitude, which is moving towards increasing diversity. The atmosphere has definitely shifted.’

Simpson grew up surrounded by science – ‘All of the men in my family were engineers’ – which gave her a natural path into the discipline. Today she strives to attract more women into engineering, as the profession seeks to address the ‘paralysingly huge skills gap’ in engineering.

‘We’re all doing what we can to widen the field of recruitment,’ says Simpson. ‘If you look at other areas like medicine and law, they have made huge leaps in recruiting women.’

Engineering a new image Engineering faces the multiple challenges of

Instilling more positive images of engineering is a major part of the task perceived ‘maleness’, a confusion between the work of engineers and mechanics, and a persistent perception of engineering as a ‘dirty’ profession.

‘I’ve never worn a pair of overalls in my life,’ says Simpson, who describes her role as more project management. She has several strategies to improve female recruitment: anonymising CVs by education and gender ‘before anyone technical sees them,’ asking agents specifically to put forward women candidates, offering part-time and job share roles, and rebranding some job titles. ‘It took me a whole year to get a female CV for a job in drainage,’ recalls Simpson. ‘We might have done better to call it a “hydro-geologist”.’

Instilling more positive images of engineering is a major part of the task, argues Kathryn Jackson, Researcher at Nuclear AMRC in Sheffield. ‘The subconscious images tend to be very male – power, performance, speed – domains that are very attractive to men. So we’re presenting a different side, where engineering is a caring profession, about solving climate change, developing life-saving technologies…’

Jackson sees the family as a massive influence. ‘Part of the challenge is raising awareness among parents. So we run evening STEM events in schools where parents come along. They’re often surprised at the wealth of opportunities,’ she says.

Jackson has to deal with perceptions of nuclear energy’s safety and its long-term viability, especially in the light of the 2005 Fukushima disaster and the differing views of technology as an energy source or a weapon. ‘Women’s perception of nuclear is much lower than men’s, so it’s one thing we’re trying to do, to improve its popularity among women,’ says Jackson.

At the National Nuclear Laboratory, between 25 and 30% of the apprentices are female, which is a strong representation www.the-eic.com | energyfocus

17

Special Report: Energy gender gap

WOMEN IN ENERGY

Classroom to the boardroom pipeline STEM education and apprenticeships

GCSE

80%

compared with other similar ‘We need to show that fields. Improving the proportion engineering doesn’t just involve of women boosts general fixing cars and installing boilers,’ business performance, says says Chaplin. ‘I drive a desk. We Jackson: ‘Gender diversity makes need to push that it’s a fulfilling, a business more dynamic and varied, challenging job where you competitive. Women’s decisionmay need to provide an urgent making is more collaborative response to a problem. My salary than men’s.’ is a bit lower than some of my There’s mounting evidence peers in finance, but I work a that men favour a more diverse 37-hour week and I love my job.’ workplace. Male-dominated businesses are seen as old Powering ahead fashioned, monocultural places Traditionally, oil and gas Vicki Hollub which are less appealing on many companies have offered high Honorary President of the Nuclear levels. And challenging the salaries and better terms than Skills Academy stereotype doesn’t have to mean those in renewables. But the oil women behaving like men, price crash and the strengthening Jackson argues. Her colleague economic and technical case for Samantha Biddleston, a Welding renewables is shifting the Technologist at Nuclear AMRC, balance, according to Chaplin. is a case in point. ‘Sam’s hobby is The wind energy sector has Lynn J Good hair and beauty,’ says Jackson. attracted an increasing number CEO, Duke Energy ‘She’s a good example of of women, says Rhys Jones, Head a feminine role model of Technological Affairs at in engineering.’

RenewablesUK. ‘Wind attracts Like Sarah Simpson, more women than other power Biddleston grew up with an sectors, because of its positive engineer father. ‘Now I’m image. It’s a modern, future Dame Sue Ion technology and young women studying for a degree in Honorary President engineering,’ she says. ‘The want to be involved in something of the Nuclear profession has offered me making the world a better place.’

Skills Academy broader horizons that weren’t on Job security in oil and gas has offer elsewhere.’ weakened, and there are often more flexible For Rob Chaplin, Principal Naval Architect working patterns in renewables, says Jones. at BAE Systems’ In Service Submarines, ‘It’s also about valuing people: we need to say fostering an interest in the field needs to start “you’re a creative problem solver, we want at a young age. He’s visited schools where year you to come into a top end career, the 2 and 3 children (aged between six and eight) equivalent of being a barrister or a surgeon”.’ are fully engaged in STEM subjects, both male Given this fair wind, future generations of and female. Yet by year 5 (around 11 years old), engineers may be spoilt for choice when it interest among girls has waned. comes to famous female role models.

24%

LEVEL 3

Advanced Apprenticeships A-Levels Vocational Qualifications

LEVEL 4+

Advanced Apprenticeships A-Levels Vocational Qualifications

34% 7%

Today’s female pioneers

18 energyfocus | www.the-eic.com

61%

All male board

61% of the top 100 UK energy companies have all male boards 24%

1 woman on the board

15%

2+ women on the board

Energy sectors: Proportion of all board seats held by women

17% POWER & RENEWABLES

Executive board seats held by women: 15%

8% NUCLEAR 7% OIL AND GAS

Executive board seats held by women: 4% Sources: The WISE campaign; Women's Engineering Society (WES)

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Feature Brexit

Making a success of Brexit As Brexit draws closer, Jeremy Bowden takes a look at how exporters are reacting to the prospect of Britain leaving the EU, and what we might expect from a Brexit deal

W

ith the clock now ticking down the two years to Brexit, UK-based companies will soon find themselves in a very much smaller domestic market. How much of a difference that will make is highly uncertain at this stage. Above all, it’s difficult to tell whether recent comments from EU representatives are realistic, or simply aimed at scaring the UK electorate in the run up to the upcoming general election. If we are to believe the current UK government (at the time of going to print, the Conservative Party), there is nothing to worry about, and its position based on the most open trade arrangements possible: zero tariffs and some control over movement, will win out.

The UK’s decision to leave the EU has, however, produced a number of immediate effects, notably on exchange rates. It has also resulted in a rise in uncertainty, related to whether or not the UK will remain in the single market and a number of longer-term risks including UK policy adjustments, introduction of cross border regulations and

20 energyfocus | www.the-eic.com

the possibility of further breakup of the EU or UK – although the former looks less likely following recent European election results.

Currency ups and downs So far, the exchange rate movement has been the most significant Brexit consequence. If it’s permanent, as looks possible, this will improve exporters’ competitive position by reducing prices relative to overseas competitors – boosting exports and making imports less competitive. When combined with the government’s new industrial strategy, which is intended to boost exports and narrow the trade deficit (see Figure 1).

However, any exporters with significant reliance on imported raw materials or components have seen costs rise, forcing them to raise prices, which has countered the exchange rate advantage for some.

In the North Sea, most costs are in dollars, so it has become relatively cheaper to invest there since the pound fell after the referendum result. For example, the cost of developing Premier Oil’s Catcher field was originally set at a rate of US$1.60 to the pound. That’s been lowered to US$1.31, representing about US$100m of savings on the project.

Areas like nuclear development, where most investors are based overseas, may also be affected by the forex move, with Hinkley Point C likely to see another rise in sterling estimated costs. However, once again, the weaker pound makes UK-sourced inputs relatively more competitive.

Looking further ahead, a rise in import tariffs resulting from Brexit could offset any exchange rate advantage, hitting exports to the EU, although it could help domestic suppliers expand local market share in areas where competition from imports is high. If

Brexit: Feature

Figure 1. Graph showing slight improvement in balance of trade since the Brexit vote Apr 2016

Jul 2016

Oct 2016

Jan 2017

-4652 -3407 -1061 -3376 -3579 -5463 -5755 -688 -2324 -1833 -2975 -3663

GBP million 0

-2000

-4000

-4652 -6000

IMAGES: GETTY

The difference in value between UK imports and exports in GBP (millions) from April 2016–February 2017.

Source: www.tradingeconomics.com/united-kingdom/balance-of-trade/foreca

there is failure to reach a Brexit agreement, World Trade Organization (WTO) rules will apply, and that means tariffs of around 10% on most manufactured goods. On 30 April Theresa May repeated her belief that ‘no deal would be better than a bad deal’, reminding us that WTO rules are perhaps a real possibility – although this, as with recent comments from EU leaders, could be early posturing in the negotiations process.

WTO rules could mean further instability for the pound – but also for the euro, with the UK being Europe’s biggest single trading

partner. Britain’s substantial trade deficit with Europe means European exporters would be hit hard by WTO rules.

There are also a number of uncertainties that arise as a result of Brexit related to interconnector trade (electricity and natural gas cross border trade between the UK and EU) and clean energy policies. The extent of the impact will depend on whether any agreement to leave will be aimed at maintaining maximum cooperation, along with how closely the UK follows EU energy and climate policy. There had been

speculation that the UK might reverse key laws and practices – such as emissions goals or other elements of environmental policy – although there is little sign of that so far.

Inward investment in the UK energy sector may also be hit during the run up to a deal, as higher returns are required to compensate investors for the uncertainty. This puts upwards pressure on the cost of financing, raising the cost of investment in the UK energy sector. The scale of planned infrastructure investment in the electricity sector over the next decade means that even small increases www.the-eic.com | energyfocus

21

Brexit: Feature

Brexit uncertainty reduces investment activity; some growth with more distant markets The UK investment community has its sights fixed firmly beyond Europe according to a new report

by BusinessesForSale.com, although activity is down overall on heightened uncertainty over Brexit. The report, which examines the online activity of British investors in comparison to those overseas, has made the following discoveries: UK investors’ interest in UK businesses has dropped by 9.8% UK investors’ interest in European business has fallen in every European economic country surveyed, peaking at a 37.45% decline in Belgium, with France falling by 32.94%, Germany by 30.04% and Ireland 30.04% UK investors’ interest has grown the most in Australia

and Japan with growths of 81.6% and 67.72%, respectively There were also signs of the wider world showing more interest in investing back in the UK: Investors in the UK from the US were the highest in volume and increased by 11.56% Investors from Australia were second in terms of volume, and rose by 79.06% The volume of visitors from Asian countries remained lower overall, but increased substantially in percentage terms: Japan by 207.14%, Singapore by 55.59%, Hong Kong by 33.39% The findings are indicative and not an exact indicator of actual trade and investment. Rufus

in the cost of financing could have large consequences for total investment costs.

IMAGES: GETTY/ISTOCK

Routes out of Europe Post Brexit options include the halfway house of the European Economic Area (EEA), which is the option Norway has settled for. This would involve more or less automatic acceptance of all the energy and trade rules decided in Brussels. Another alternative is the Swiss model, which would exempt the UK from EU competition law and state aid rules, leaving energy arrangements with the EU to be worked out on a case-by-case basis.

Or the UK could manage to negotiate a unique arrangement unlike either Norway or Switzerland’s. That appears to be the objective of the current UK government and the main opposition, the Labour Party, both of which have said they favour a free trade deal negotiated very similar to current arrangements, alongside leaving negotiations, with some limits on freedom of movement.

Ana Stani , partner at E&A Law Ltd, said her company was working on various scenarios for UK and EU members, commenting that, ‘Although the existing

Bazley, Marketing Director at BusinessesForSale.com said, ‘Historically the UK has enjoyed consistently strong interest from investors based both here and abroad. This survey suggests there has been an undeniable loss of confidence and interest from UK investors in domestic and global markets following Brexit, no doubt fuelled by the uncertainty the decision has created in the business community.’

The figures cited compare the period from 12 March to 14 April for 2016–17, with that of 2016–17 and so cover the Brexit referendum results, but not the announcement of the UK general election, which is predicted to bring more uncertainty to the market.

models [Norway and Switzerland] are unlikely to fit. Freedom of movement and access to the single market seem unresolvable, and given this stance it looks like they might not be able to agree on anything, but I suspect this may change.’

'On nuclear the main issue is state aid, so if the UK did not choose the Norwegian model, it would not have to comply with state aid rules, so the UK could raise the price it pays for nuclear even further... I doubt [the new government] would want to do that with Hinkley Point C, but it may

The best way to reassure the UK’s energy supply chain and reduce uncertainty is for the government to provide barrier-free relationships and access to EU markets

free the government’s hand with respect to new developments, depending on the deal done.’ said Ms Stani .

She said it was single market issues, such as around trading and tax rules, the freedom of establishment, and the freedom of movement of people and capital that could have an impact on companies’ bottom lines.

‘Companies need to decide on possible scenarios and decide what to do in each eventuality,’ she added.

Put trade first The best way to reassure the UK’s energy supply chain and reduce uncertainty is for the government to provide barrier-free relationships and access to the EU markets, with low or no tariffs, and minimal customs processes – very much in line with current government and main opposition’s apparent thinking, but conditional on EU agreement.

A clear regulatory plan to give continuity and facilitate ease of trade is also a key goal, along with a migration system that enables business to retain access to key EU workers and skills, and protect access to EU R&D and innovation funding. There is also concern that without a smooth transition over the next two years and beyond, the risk of underinvestment will grow as uncertainty builds.

At this stage, it looks questionable whether all these conditions will be achieved, with the UK apparently prepared to accept no deal and EU members unanimously refusing to even negotiate on trade matters until after divorce arrangements are finalised. Exiting the single market appears a real possibility, which could make it difficult to achieve ‘barrier free relationships and access to EU markets’. On the other hand, the UK’s clout in EU trade is substantial and it may be that a mutually acceptable, and exceptional, deal still wins out.

Whatever the outcome, there will be advantages and disadvantages from Brexit – those companies that use the advantages and offset the disadvantages will be best placed. The prospect already appears to be refocusing investors around the world, helping with the push towards a wider global trade focus (see box), supported by groups such as UK Export Finance, which works with 70 private credit insurers and lenders to ensure export opportunities are funded. www.the-eic.com | energyfocus

23

Oil and Gas UK North Sea

Unlocking

North Sea potential Energy Focus talks to Russell Dandie, Global Supply Chain Manager at Premier Oil – one of the largest independent UKCS operators – about collaboration, innovation and maximising recovery from the North Sea

Please could you give our readers a little background on Premier Oil’s interests in the UK North Sea? Premier’s operations and production in the UK Continental Shelf (UKCS) has increased significantly over the last few years. In 2015, we were producing 17 thousand barrels of oil equivalent per day (kboepd) from our UK asset base. Today we are producing c.

45kboepd from our UK portfolio and this is expected to increase to c. 65kboepd once our Catcher project comes onstream later this year.

2016 was a significant year for our UK business with Premier’s operated Solan development coming onstream and our acquisition of E.ON’s UK assets which has added significantly to our portfolio of operated assets, key amongst these being Huntington and Babbage. There were also multiple smaller operated production assets that were acquired as part of this deal as well as the Tolmount project which is scheduled for a sanction decision in the first half of 2018. Given the significant increase in our UKCS production and asset base there has also been a commensurate

26 energyfocus | www.the-eic.com

change to the scale of Premier’s UK business unit in terms of expenditure and significance to the rest of the company.

different manner with key members of the supply chain to identify wasted resource and efficiency gains within scope execution.

What are the immediate challenges that Premier Oil is facing in the current market and how are you tackling them?

The immediate challenges are: 1. Cost control. The entire industry has responded predictably to the fall in the oil price with laser like focus on the unit rates of our contractors/vendors. There are other areas, however, that Premier can and has focused on to create a more sustainable cost environment within our critical spend areas, such as investing in longer-term contracts and relationships.

2. Right-scaling the UK business unit.

Ensuring that the business unit is set up for success given that it is now a multi-asset operating entity and ensuring that our internal capability is aligned to that of our third-party supply chain.

3. Creation of new disruptive supply chain strategies. Premier is open to alternative contracting strategies, including outsourcing, collaboration and working in a

Collaboration is a word that has been bandied about often by operators and contractors alike. Please can you give examples of how Premier Oil views collaboration and how you have collaborated with partners in recent months?

Premier is involved in a number of collaboration initiatives. In particular, we are working closely with three other operators in the UKCS on a proof of concept for horizontal collaboration. This entails a contract review and benchmarking exercise which will enable the four operators to gauge just how close we are in terms of ‘contracted specification’ and whether future value is accessible from economies of scale and standardisation.

What can the UK supply chain do to help ensure that the life of the UKCS is extended?

The UK supply chain should be open to alternative sources of quality products and services and to the challenge of doing things

UK North Sea: Oil and Gas Premier’s Catcher project remains on track to deliver first oil later this year

At a glance: Premier UKCS Highlights and achievements

Completion of the E.ON acquisition, significantly strengthening UK business unit Production more than doubled to 45kboepd Operating costs down a further 20% to US$24/boe Catcher CAPEX reduced by 29%

52

141

Revenue by region (US$m)

Indonesia Vietnam United Kingdom Pakistan & Mauritania

598

Outlook

Maximise operating efficiency Deliver Catcher on schedule and below budget Progress Tolmount to project sanction decision Continue to manage operating costs downwards

differently going forward. Innovation is not all about new technology. It can also be around how we contract and incentivise efficiency. Those who use contractor resources most efficiently should get the benefit of lower cost. Those that have been and continue to be wasteful with the supply chain’s finite resource base should face a significantly higher cost base. Working with contractors in a collaborative manner to remove wasted resource from a process is not something the industry does well and we need to look at and learn from other sectors in this respect.

SMEs are being asked to come up with pioneering solutions to problems by operators but often find that operator specifications and their actual requirements are not always aligned. What is Premier’s take on innovative solutions?

As an independent upstream company rather than a major the need and ability to raise and develop our own bespoke standards is much more limited, leading to more of a focus on the supply chain and its standard products and services. This enables the supply chain to be efficient in support of

7

Premier’s operations

192

OFFICES WORLDWIDE Business units UK Pakistan Indonesia Vietnam Falkland Islands

Other locations Brazil Mexico

983.4m 799

US$

TOTAL GROUP SALES REVENUE

our requirements as hopefully we demand less bespoke support from them.

How does Premier Oil obtain the optimum balance between cost, quality and time when selecting new technology?

New technology adoption is not necessarily the domain of independent energy companies. With smaller activity sets and more limited asset bases and resources, then the upside benefit conferred by some new technology to independents may not meet our internal investment thresholds, especially when the risk involved is taken into account. New technology, however, does not need to be limited to new products but can involve new commercial models and contracting strategies which Premier as an independent is better placed to exploit.

Tolmount is looking like it will be one of the most significant projects to move into the development phase in the next 12 months. What opportunities will we see for the supply chain on this project and how can they get involved?

The supply chain should already be aware of

EMPLOYEES

the project and its outline development plan which is a minimum facilities/unmanned platform with a trunk line back to the UK’s east coast. There is also a significant onshore piece of work to tie-in the gas export line into the onshore processing plant.

As supply chain manager, I and my team work alongside our project team to ensure that we stay abreast of the project’s requirements and, as signatories to the Oil and Gas UK Supply chain Code of Practice, the UK business unit will also be presenting forward contracting plans at regular intervals over the next two to three years.

What will the oil and gas operating environment look like in the next three years?

I hope that it will look more positive and vibrant than today! There is much talk in industry regarding a future recovery and I am not sure I am supportive of this view or see this in the demand and supply balance of our critical supply chains. Also the reduction in unit rates that have been ever-present in the industry for the last two years may not be sustainable in the short to medium-term future, especially if demand does indeed pick up. www.the-eic.com | energyfocus

27

Oil and Gas Mergers and acquisitions

As businesses move out of survival mode and look to the future, Matthew Graham foresees a modest upturn in oilfield services mergers and acquisitions

A

IMAGES: GETTY

mid cautious optimism, companies operating across the supply chain are continuing to focus on their customers in an effort to allay further volume declines and quell margin pressure.

But what do those customers – for most serving the sector, operators and Tier 1 service companies – want and need from the supply chain?

Some operators and Tier 1 contractors have always been firmly focused on cost and the current market backdrop has led others to seek efficiencies and price reductions leaving suppliers wondering how many appreciate that cost and value are not always synonymous?

With many companies in the sector facing significant financial challenges, certainty of delivery has become an ever more important factor in customer decision making and therefore, first and foremost, customers need confidence in the ability of their product and service providers to weather the current storm. Companies with strong reputations, scale and balance sheet strength are proving best placed in this regard.

In addition to needing robustness, customers want responsiveness, superior service quality and differentiation. In an increasingly competitive market environment, ‘me too’ businesses have suffered most as customers seek product and service providers with a competitive edge, or unique selling point.

Integration and service bundling have been buzz words for the last decade, however, the current downturn has led to these being paid more than lip service, as customers focus on supply chain rationalisation enabling them to streamline procurement processes and realise savings.

Creating value by M&A The volume of merger and acquisition (M&A) transactions

28 energyfocus | www.the-eic.com

An industry shaped by mergers and acquisitions taking place in the sector has been suppressed over the last couple of years; however, the objective of those deals that have closed has generally been to tick one of the boxes referred to above.

While it is often cited that companies engage in M&A to grow, diversify, eliminate a competitor, etc, recent deals in the sector have been predicated upon the ability to achieve specific, deliverable, tangible gains versus hypothetical benefits.

The industry downturn has prompted a spate of mega mergers, including GE Oil & Gas/Baker Hughes, Schlumberger/Cameron, Technip/FMC Technologies and, most recently, Wood Group/Amec Foster Wheeler.

In the case of Wood Group, the acquisition of Amec Foster Wheeler serves to diversify the business and reduce its reliance on the oil industry. The other deals were primarily driven by the desire to combine complementary products and services in order to provide customers with a broadened offering. Scope for substantial synergies has also been a key factor.

In the mid-market, access to proprietary technology has driven several recent deals, with large corporates seeking to acquire and use the offerings of niche providers to enable provision of a broader package of products

and services to their customers.

Emerson’s acquisition of Permasense and NOV’s acquisition of Axiom Process are two examples.

The ATR Group/Centurion Group merger was not technology driven, but was geared towards better serving customers. By merging they combined rather than competed to improve their position and deliver benefits to clients and synergies which were not available to either business operating alone. As a result, this deal has been very well received by customers, leading to more and better opportunities for the merged business.

An uptick in merger activity may emerge as a theme in the coming years.

Role of private equity Centurion Group is majority owned by SCF Partners and sector specialist private equity funds have shown that they have a real role to play in oilfield services M&A in the current market, not only by way of provision of capital, but by using the experience of their principals to work with management teams to develop business strategies and deliver on those.

Active investors in the sector include Buckthorn, who has recently acquired TWMA and Ashtead Technology, Norvestor, who recently bought Read Cased Hole, and Blue Water Energy, who have completed a number of acquisitions including Optilan.

SCF Partners and Energy Ventures, long-term investors in the sector, continue to actively pursue new opportunities.

What next for M&A? Although deal volumes are unlikely to return to pre-downturn levels in the short-term, companies and private equity funds active in the oilfield are continuing to focus on how best to manage the down market and position themselves to capitalise on the upturn when it comes.

Strategic M&A will be a significant factor in those conversations and as buyers and sellers have now had a couple of years to adjust to the ‘lower-for-longer’ market backdrop, we expect a greater degree of valuation alignment, which will be a key transaction enabler.

By Matthew Graham, Director of Investment Banking – Energy, Simmons & Company

lb/cf

fact

BPD bbl/h

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Oil and Gas UK shale

A step closer to exploratory drilling Cuadrilla CEO Francis Egan believes that shale gas has the potential to provide the UK with greater energy security, growth and jobs

L

ast October we were very pleased to be given planning consent for our shale gas exploration site at Preston New Road in Lancashire after a long planning and appeals process. This was a significant boost to the UK shale industry and the UK as a whole.

Over 80% of households in the UK rely on gas for their heating and as a country we are already importing over 50% of this to meet demand and gas imports continue to grow as North Sea production declines.

In 2013 the British Geological Survey estimated that there is some 1,300tn cubic feet (Tcf) of gas locked up in the shale rock which stretches across the north of England – the UK currently uses approximately 3Tcf a year for all its gas needs.

Shale gas exploration is critical to understand the economic viability of this resource which can, if commercial, play a vital part in securing the nation’s energy security.

In January we started construction of our new site in Lancashire, which we are currently completing, and preparing to start drilling over the summer and then hydraulic fracturing towards the end of the year.

Ensuring Lancashire directly benefits from our operations is something we are extremely

Contracting opportunities during exploration and appraisal Drilling

Rig and equipment mobilisation Supply of fuel Mechanical and electrical services Fabrication/welding services Recycling/disposal of drilling wastes Continuous environmental monitoring

Hydraulic fracturing

Equipment mobilisation Water supply and storage Supply of additives and sand Supply of fuel for the pumps Mechanical and electrical services Fabrication/welding services On-site water recycling facilities Removal and off-site processing of wastewater Continuous environmental monitoring

Well testing

Engineering consultancy Flare design, manufacturing and supply Civil engineering contractors Directional drilling specialists Applying for and making grid connections Marketing the extracted gas Continuous environmental monitoring

A full list of potential opportunities for the shale gas lifecycle can be found at: www.shalegaslancashire.co.uk/ supply-chain/the-opportunity/

committed to in terms of creating jobs, investment, new skills and community initiatives as a result of shale gas exploration and, if exploration is successful, shale gas production in Lancashire.

We have established our headquarters in Lancashire and for us it is a way of doing business. To support that commitment we continue to publish an independently verified tracker which demonstrates that in just three months of operations this year we had already nearly doubled our total investment into the county. The total of direct and indirect spend into the county from Cuadrilla and its suppliers now stands at over £1.4m.

In addition Lancashire businesses have also been encouraged, to register with the supply chain portal managed by the Lancashire Chambers of Commerce in order to be considered for contracts connected to the Preston New Road operations. Over 400 businesses have already registered.

The months ahead will be a busy and productive one for Cuadrilla. We are very pleased to be in a position to turn the potential for UK shale gas, to redress and reduce gas imports, into a reality.

By Francis Egan, CEO, Cuadrilla Resources www.the-eic.com | energyfocus

31

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Oil and Gas Indonesia

Reforms fuel new opportunities Dinar Indriana Khoiriah of Alefstrata sees opportunities abound for UK expertise as Indonesia seeks to increase upstream investment

I

ndonesia holds proven oil reserves of 3.7bn barrels and is in the top 20 of the world’s oil producers. The country is ranked 10th in global gas production, with proven reserves of 102tn cubic feet (Tcf) in 2016. On a reserves basis, Indonesia ranks 15th in the world and the third in the Asia Pacific region (following Australia and China).

Upstream investment in decline For decades, Indonesia’s oil and gas have been a key driver of economic growth. However, in recent years investment in the sector has been sluggish and despite signs of a slow global oil price recovery this trend is expected to continue over the next few years.

The industry’s contribution to state revenues has decreased significantly along with the decline of reserves and production. PwC reports that by the end of 2015 and 2016, total upstream oil and gas investment declined to US$15.6 and US$10.4bn respectively, falling well below expected targets. In 2017, the government expects the investment level to grow slightly to reach US$13bn.

Reserve depletion and lack of new discoveries are compounding the issue, which has led to the relinquishment of many oil and gas working areas during 2015–16. In 2016, only two new contracts signed from 17 contracts were offered.

According to the Indonesian Petroleum Association, exploration

Interested in Indonesia?

Event: EIC Indonesian Oil & Gas 2017 When: 1 November 2017 Where: City Plaza P9, Jalan Jenderal Gatot Subroto, South Jakarta, Indonesia Why attend? Jointly organised by EIC Asia Pacific, Department for International Trade Indonesia and oil and gas regulator SKK MIGAS, this event provides a unique opportunity for delegates to hear from senior figures at SKK MIGAS,

Pertamina and other leading Indonesian oil companies on their strategic plans for the industry.

The Indonesian Minister of Energy Jonan Ignasius and Vice Minister Arcandra Tahar are both expected to attend. One-to-one appointments with representatives from the operators and contractors taking part are available. Please contact Azman Nasir, Head of Asia Pacific, at azman.nasir@the-eic.com

spending plunged to a mere US$100m last year from US$500m in 2015 and US$1.1bn in 2014.

Key reforms A net importer of oil since 2004, Indonesia’s government is aware that exploration is key to the development of its oil and gas industry and is attempting to incentivise investment by finalising the draft revision of the Oil and Gas Law 2001.

The new law will establish a special oil and gas agency (BUK Migas), regulate a petroleum fund that will be used to find new oil and gas reserves and include a cost recovery scheme, which holds the government responsible for reimbursing operators’ exploration and exploitation activities. The response to Indonesia's latest licensing round (May 2017) will determine whether the proposed changes to new oil and gas legislation can be viewed as a success.

Immediate priorities With Indonesia's declining oil production and rising oil consumption, the government’s immediate priority is to maintain oil production at 800,000 barrels a day as a minimum.

To this end, the government has announced several new upstream oil and gas strategic

projects including Eni's Jangkrik field development, BP's Tangguh Train-3, Chevron's Indonesia Deepwater Development (IDD) project, and Genting’s Kasuri block. In addition a five-year acceleration programme will commence in 2018 aimed at identifying new technology to be implemented in all existing wells.

Opportunities As the country reforms to maintain production and attract investment, significant opportunities will be available to the UK supply chain, including: Enhanced oil recovery technology to increase oil production Supply of subsea equipment and services Liquefied natural gas receiving terminals and re-gas facilities Education and training Coalbed methane and potentially shale gas Other opportunities exist in drilling and completion, equipment, pipelines and control lines.

By Dinar Indriana Khoiriah, Managing Partner, Alefstrata For further information: To find out more, visit www.alefstrata.com

www.the-eic.com | energyfocus

33

Oil and Gas Asia Pacific

ACTIVITY TO WATCH ACROSS THE REGION

Oil & Gas Asia 2017:

Gateway to South East Asia

Now in its 16th edition, Oil & Gas Asia provides a platform for companies to tap into the region's business opportunities

O

n 11–13 July in Kuala Lumpur, Oil & Gas Asia (OGA) 2017 is expected to attract 23,000 delegates, many of whom will be representing Malaysia’s major operators and contractors.

These procurement specialists will no doubt make a beeline for the EIC-hosted UK pavilion, aware that the skills and products developed at complex brownfield sites in the North Sea can also be used to maximise recovery at their own maturing fields.

Likewise, Malaysia, with about 4bn barrels of oil and 83tn cubic feet of natural gas, and a government committed to increasing its energy sector by 5% annually, is an attractive market for the UK supply chain.

OGA 2017 is the only event where delegates can find out about the opportunities offered by the rapidly growing Malaysian market, learn about regional operators’ project requirements and procurement procedures, and meet with potential local partners.

Activity in South East Asia South East Asia is one of the

world’s fastest growing regions, with the International Energy Agency estimating that over the next 20 years its energy demand will surge by 80%. It is also expected to receive record levels of offshore investment over the next five years, where local capacity will need to be supported by foreign expertise.

According to the EIC’s project tracking database, EICDataStream, for 2017–21 there will be a total of 169 projects proposed or under development in this part of the world, worth a staggering US$124bn collectively.

VIETNAM

Gas is becoming an ever more important feedstock for Vietnam’s growing manufacturing and petrochemicals sectors, as the country continues to develop as a regional refining and petrochemicals hub.

PetroVietnam is currently undertaking appraisal works at Block 48/95 in the Malay-Tho Chu Basin.

This forms part of the larger Block B gas development project, which will produce approximately 6.4bn cubic metres of natural gas and 21,000bbl/d of liquid gas.

Two proposed refineries, the Long Son and the Nam Van Phong refineries, have now been approved by the government but have yet to secure sufficient funding for construction to start. If financing is achieved they will add more than 400,000bbl/d to the country’s refining capacity.

Offshore assets Looking ahead, the region’s decommissioning sector will increase in importance with Brunei, Indonesia, Malaysia and Thailand home to 833 installations that are 20 years or more old – the average life expectancy for an offshore asset.

Malaysia’s PETRONAS and Thailand’s PTT Exploration and Production have already listed platforms to be decommissioned, and with operators being encouraged to undertake decommissioning, the number is set to grow rapidly.

34 energyfocus | www.the-eic.com

MALAYSIA While many offshore developments are being put on hold around the world, here substantial projects are still moving ahead, including PETRONAS’ Bokor Phase III redevelopment project.

Malaysia Marine and Heavy Engineering will be responsible for the engineering, procurement, construction, installation and commissioning of the new central processing platform.

Another positive development is the very significant gas discovery made in Block SK408 offshore Sarawak by Sapura Energy, formerly SapuraKencana Energy, estimated to hold trillions of cubic feet of gas.

The Pegaga gas discovery located in Block SK320, again offshore Sarawak, is another project making good progress with an invitation to tender for an EPCIC contract expected to be issued by Q3 2017.

Asia Pacific: Oil and Gas

Looking to expand into South East Asia?

The EIC can help

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If you want to make the most of the many business opportunities on offer in South East Asia but don’t know where to start, then get in touch with the EIC. Our Kuala Lumpur team knows the local markets inside out and can introduce you to the all region’s key players.

Just as important as our practical advice and connections is our Kuala Lumpur Launchpad service which provides a low cost, low risk entry into this booming market.

We can provide you with serviced office facilities, meeting rooms and hot desks as well as a virtual office service: everything you need to start building your business in the region.

Please contact Azman Nasir, Head of Asia Pacific, at azman.nasir@the-eic.com

As a result of its falling domestic gas production, Thailand plans to build an LNG import terminal at Rayong, which is expected to start operations in 2023.

Carigali-PTT Operating Company (CPOC) continues to be active in the B-17 Block in the Gulf of Thailand, where it is moving ahead with its Phase Four field, comprising of three wellhead platforms with subsea tie-backs to existing facilities.

For those companies wanting to establish themselves in this region, Malaysia is the perfect place to start.

The EIC UK pavilion at OGA 2017 – Hall H5

Visitors to the EIC-run UK pavilion are sure to find a product or service which can add real value to their projects. UK companies will be exhibiting their wide range of tools and expertise, honed over four decades of operation in the North Sea. Exhibiting companies AFGlobal UK Ltd: A technology and manufacturing specialist, providing technology, services and fully integrated manufacturing capabilities to clients around the world. AFGlobal UK Ltd aligns well-established precision engineering with game-changing innovation.

Bridon-Bekaert The Ropes Group: Bridon-Bekaert The Ropes Group is a world leading specialist in the manufacture of wire and rope solutions for the most demanding of applications.

Colson X-Cel Ltd: A well-established and highly respected valve manufacturer, Colson X-Cel Ltd has a global reputation for excellence in product design, quality, reliability and the highest levels of customer service.

Hi-Force Ltd: Hi-Force is a leading designer, manufacturer and supplier of hydraulic tools. Catering to a wide variety of industries, its product range comprises over 2,000 products.

Hire Torque Ltd: Hire Torque Ltd is an industry leader in controlled bolting, flange working and portable machine equipment with unrivalled joint integrity expertise.

LUX Assure: LUX Assure offers two key products, CoMic™ and OMMICA™, to monitor and manage chemical levels in hydrocarbons, condensates and water.

INDONESIA The government of Indonesia aims to develop five

floating storage and regasification unit (FSRUs) in 2017 as part of its plans to improve its domestic gas infrastructure. The country currently has two new FSRUs, located in Central Java (FSRU Cilacap) and West Java (FSRU Cilamaya) under development, which are expected to be operational in 2018 and 2021, respectively.

State-owned PT Pertamina has unveiled its Refinery Development Master Plan aimed at boosting its total refinery capacity to approximately 2.3m barrels per day (bbl/d) by 2025 and cut the country’s dependency on oil imports. This ambitious plan will see four new refineries built at a total cost of US$12bn, with capacities ranging from between 300,000 to 350,000bbl/d.

Norbar Torque Tools Ltd: Manufacturers of high quality torque tools, including wrenches multipliers, screw drivers and calibration equipment, Norbar is devoted exclusively to the design, development and production of torque tightening and measuring equipment.

Raytec Ltd: Founded in 2005, Raytec is a world leader in LED lighting for security and safety, with over half a million products currently in service.

www.the-eic.com | energyfocus

35

Orga

The Way Ahead

IN CAP437 Helideck Lighting From 1 April 2018, all helidecks in the UK North Sea will need to be equipped with TD/PM Circle-H helideck lighting. Helidecks not fitted with the new standard in lighting will be considered unsuitable for night operations. So, come April next year, will your operations continue or will your night flights be restricted?

With the UK Civil Aviation Authority (CAA)’s deadline for installing CAP437 Touchdown/Positioning Marking Circle and Heliport Identification Marking ‘H’ (TD/PM Circle-H) lighting looming around the corner, choosing the right system for your offshore helideck is now more critical than ever.

There are a number of systems available on the market but having developed and trialled the Circle-H lighting scheme with the CAA, Orga is the one company best qualified to help you make the correct choice.

Choose Orga TD/PM Circle–H… …for safe landings Designed in conjunction with and approved by the CAA, the Orga TD/PM Circle-H provides pilots with the best possible visual cues during approach and landing in all weather conditions.

Delivering a step change in helicopter safety on offshore helidecks, Circle-H has been widely welcomed by the helicopter pilots. The world’s first Circle-H was installed in 2012 by Orga and since then pilots continue to report smoother and more controlled landings. By replacing floodlights with LEDs, the system eliminates the dangerous and disorienting ‘black-hole’ effect that previously challenged pilots, making every landing much safer. …for high quality and efficient technology With more than 80 systems installed and over 120,000 operational landings Orga’s non-netted TD/PM Circle-H lighting system has already proved that it is easy to install and maintain, even on an operational helideck.

It is the clever design of the product – with LED light-prepared, semiflexible, low profile, metal module plates ¬– that enables easy and direct mounting on the helideck. And thanks to this, downtime is low, permitting a 30-minute medevac window for emergencies.

In addition, state-of-the-art LED technology, which gives reliability, long life and low power consumption, coupled with durable and robust components helps lower the total cost of ownership.

Unlike a netted system, the Orga TD/PM Circle-H is compatible with Deck Integrated Fire Fighting systems and fully in line with CAA requirements.

The light panels are helideck frictiontest friendly, meaning they do not have to be removed for friction testing, and benefit from a ‘fit and forget’ design

Advertising Feature which ensures that they will never need to be recertified.Meanwhile, approved fixing methods for both steel and aluminium decks ensures structural integrity, durability and water-tightness of the helideck.Orga’s innovative Atex/ IECex Circle-H helideck lighting system incorporates a unique modular system, which works in conjunction with Orga perimeter and status lights and illuminated windsock. …for peace of mind Having been involved in the design and development of the CAP437 Circle-H lighting specification, the compliance of Orga’s system with all regulatory and operational requirements is totally guaranteed.

Orga’s TD/PM Circle-H lights meet ICAO and other relevant regulatory requirements, as well as the CAA’s latest CAP437 standard for helideck lighting systems.

Further testing, both in the factory and in service, enables you to implement Circle-H with the security and knowledge that you are providing the safest system available.

Orga also offers survey, installation and training support to give you the quickest and smoothest Circle-H installation available in the market, while maintaining the rigorous safety standards required for mounting a lighting system in a challenging environment.

Selecting your system With time running short, Daniel Powell, Business Manager Helideck at Orga advises buyers “to look more closely at the effectiveness of the system and avoid making a decision based on initial outlay alone”.

Mr Powell continues, “It is really important to understand the true

ongoing cost of installation, inspection, maintenance, and replacement parts as well as the resultant downtime of the system. Taking the time to ask these questions will ultimately lead you to long-term benefits, not only in terms of safety but also in whole life costs.

“However, this needs to be done sooner rather than later,” Mr Powell warns, “in order to meet the CAA’s 31 March 2018 deadline for installing Circle-H and to avoid night flying restrictions.”

Orga: At the forefront of best practice Improving the lighting of offshore helidecks has long been, and will continue to be, a concern for both industry and regulators. For more than 20 years, the CAA has been conducting dedicated offshore and onshore helideck trials aimed at enhancing visual cues to aid pilots landing at night.

During that time Orga has worked closely with the CAA producing the prototype for the green perimeter lighting, which was adopted as an international standard in 2004, before

developing Circle-H lighting which the CAA mandated in 2013.

Today, Orga continues to support the CAA in shaping helideck regulations with the design and validation of a new specification to add function to a vessel’s Helideck Monitoring System (HMS). Further afield, the Brazilian Navy (Brazil’s civil aviation authority) recently invited Orga – as an international company at the top of its field – to present on best practice in CAP437 helideck lighting.

For more information visit www.orga.nl Or contact Daniel Powell at: d.powell@orga.nl

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Power Brazil

Brazil’ s energy system A NATURAL FIT FOR

Gabriel Cavados from Wärtsilä Brasil explains why gas to wire on-site power generation is the way forward for Brazil’s onshore gas producers

R

egardless of the current challenges to economic growth, Brazil has an emerging market for natural gas, especially for power generation. However, one question arises: how to match the need of the electricity system for a cheap and flexible fuel with the requirements of the gas producers for long-term take-or-pay contracts?

IMAGES: GETTY/ISTOCK

Need for flexible power generation Brazilian electricity supply is highly dependent on hydro plants, accounting on average for 70% of the country’s needs.

Power generation from this source is uncertain and dependent on water availability. Furthermore, the remaining potential for new hydro plants is located in the Amazon region where the permitting process has become more complicated.

During the past few years Brazil has started to build large-scale wind and solar energy projects, which will account for 15% of the energy matrix in the near future.

Due to the intermittent nature of these sources, there is a need of flexible and ‘dispatchable’ power generation. Natural gas matches these requirements, ensuring a

suitable back-up source to hydroelectric generation in years of low rain and a good means to balance the short-term volatility generated by the other renewables.

Onshore vs offshore potential?

With huge offshore deepwater reserves, especially in the pre-salt layer, Brazil is a well-known player in the oil market. Its offshore fields could provide natural gas for power generation but the production is associated with oil, meaning flexibility of supply would be an issue. Another disadvantage of the pre-salt reserves is their south-east location, which is some distance from where most of the new renewables are located in the north-east of the country and where hydroelectric generation is facing problems because of ever decreasing rainfall.

Considering the options, Brazil’s local authorities need to give attention to the country’s onshore natural gas potential, both conventional and non-conventional.

According to the National Agency of Petroleum, Natural Gas and Biofuels (ANP) – Brazil’s oil and gas regulatory agency – there is an estimated 500tn cubic feet of non-conventional gas reserves to be

explored. The major barrier so far in turning this resource into real development is the lack of infrastructure to transport the gas as the Brazilian pipeline network is not well developed and covers only the cities close to the shore. The onshore reserves are pure natural gas, not associated with oil, and have the advantage of being cheap and flexible.

Gas to wire on-site generation The Brazilian transmission network for electricity is highly developed, and it is possible to find an interconnection point at a reasonable distance close to almost every sedimentary basin. By utilising the gas to wire concept – integrating natural gas production with power generation – on-site at these fields, Brazil will have a better balance in its portfolio of generation assets which will help address the current vulnerabilities in its electricity sector.

Today, the electricity price cap for natural gas plants is set by the price of imported liquefied natural gas, which is expensive, mainly because of the logistics involved. For inland natural gas fields, onshore natural gas plants using the gas to wire concept is an exciting way forward for Brazil’s gas producers ¬– not only will they monetise reserves but they will also enable a more reliable, affordable and sustainable Brazilian electricity system.

By Gabriel Cavados, Senior Developer Energy Solutions, Wärtsilä Brasil www.the-eic.com | energyfocus

39

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Power India

Can UK business turn market scale into opportunity?

India’s ‘power for all’ programme is accelerating but is the country the huge opportunity that it is presented to be, asks Kelly Butler from BEAMA

W

ith a 90/10-percentage split of ownership between state and private investors (the latter through public private partnership) in India’s energy industry, clearly there is a lot of scope for market intervention at national and state level.

Under the Indian Electricity Act 2003, the central government sets policies and plans for the overall sector and state governments set policies for respective state energy companies. This structure is mirrored by the regulatory environment.

A 2003 PwC report identified that the power sector in India still has a long way to go in its reform, perhaps due to its market structure.

However, in recent years signs are visible that this is moving in the right direction, in the form of privatisation of state utilities, providing more avenues for investment.

This needs to be tempered by an emphasis on state and central regulatory bodies providing plenty of coordination and maybe some learning from other nations, including the UK given the wealth of expertise gained from Low Carbon Network Innovation, Network Innovation Competition and Network Innovation Allowance schemes.

Market vision and drivers The Indian government has a clear overarching energy objective: ‘Access, Availability and Affordability of Power for All’. Working with various facilitative platforms including the Indian Smart Grid Forum there is a comprehensive state/utility smart grid vision and roadmap for India

which underpins the overall objective.

The challenge for the sector is to transform what is now a non-inclusive, constrained and vulnerable system that is prone to security breaches into a secure, adaptive, sustainable and digitally enabled ecosystem that provides reliable and quality energy for all.

Central to this is a social policy dimension through provision of energy to rural communities. Some 35% of the Indian subcontinent (400 million people) is still without power today. The government target is to ensure every household has a secure connection to the grid.

rural communities without power.

Transmission extension is impressive; in 2014–15 some 22,000 circuit kilometres (ckt. km) of lines and 66,000MVA of transformer capacity at 220kV was added to the system and by May 2015, the Indian high voltage network extended to 316,281ckt.km of lines at 220kV and above.

In 2014, the government approved over £540m of grants for strengthening intrastate transmission, clearly understanding its challenge and rising to it through creating an encouraging investment environment.

Growth by numbers

UK companies seeking business opportunities in India should examine the list of government priorities below. These are just a sub-set of the bigger picture.

Appropriate policies and programmes to provide access for electricity for all: 100% electrification reach by 2017 24/7 quality supply on demand to all citizens by 2027 Starting with consumers with load >20KW by 2017, 3-phase connections by 2022 and all consumers by 2027 Policies supporting improved load control through dynamic tariffs and mandatory demand response programmes; bulk consumers by 2014 extending to all 3-phase (or otherwise defined) consumers by 2017 Policies created for demand response ready appliances by 2017 Enabling programmes and projects in distribution utilities to reduce aggregate technical and commercial (AT&C) losses

The level of investment opportunity in transmission lines and distribution networks can be best identified by the growth in generation assets.

This has nearly doubled in the last decade, making India the fifth largest power market in the world in terms of installed generating capacity. And the generation vision in itself presents a significant opportunity for renewables with 175GW of renewable generation targeted by 2022, split as follows: 100GW solar 60GW wind 10GW biomass 5GW small hydro The growth in generation and the need to extend reach to all communities has placed pressure on cross-state transmission lines, with a number of pinch points across the country still limiting the connection of

Priorities and timelines

www.the-eic.com | energyfocus

41

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India: Power

UK smart grid capability: Potential for export and knowledge share The UK is a leading nation in smart grid development, having built the knowledge to design intelligent systems that can be an ‘add on’ upgrade to existing asset infrastructure.

BEAMA has showcased such technology over the past five years with customers learning through experience of the Low Carbon Network Innovation framework.

Over £600m has been spent on trialling network automation, low voltage monitoring, mesh systems, SCADA solutions, power quality management, energy storage (network and building based), microgrids and distributed generation. On the latter point, there has been a meteoric rise in the growth in PV technology deployment.

The UK has become a global leader in smart metering and association connected device technology through the smart meter roll-out and policy; although it should be remembered that the average customer energy bill in India is £3 and the driver for metering is theft reduction over energy efficiency and other UK derived benefits.

to below: 15% by 2017, 12% by 2022, and 10% by 2027 Enabling programmes and projects in transmission utilities to reduce transmission losses to below: 3.5% by 2017 and 2.5% by 2022 Conversion of existing extra high voltage sub stations in all urban areas to gasinsulated substations Mandated roof top solar for connections with a load >20kW (where space is available) Microgrids (with grid isolation capability) at 1,000 sites including villages, industrial parks and commercial hubs by 2017 and 10,000 sites by 2022 Tariff mechanisms, new energy products, energy options and programmes to encourage participation of customers in energy markets and the evolution of ‘prosumers’ (consumers who also produce) by 2017 These are real targets and aspirations and lay the foundation for UK opportunities.

Analyser & Instrumentation

By Kelly Butler, Deputy CEO and Marketing Director, British Electrotechnical and Allied Manufacturers Association (BEAMA) For further information: To find out more, visit www.beama.org.uk

Support for export Like the Energy Industries Council (EIC),

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BEAMA is confident that there is opportunity for UK exporters and together co-hosted an international trade and export briefing for manufacturers and network solution providers on 29 June alongside Energy Systems Catapult. The Department for International Trade also briefed companies on its Indian Campaign and aligned support programme.

BEAMA’s recently signed memorandum of understanding with Indian counterpart Indian Electrical and Electronics Manufacturers' Association (IEEMA) means we will support knowledge transfer activities and in March 2018 will be taking a delegation of government grant supported UK companies to the Elecrama trade show.

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Nuclear F4N

OIL AND GAS SUPPLIERS GET FIT FOR

nuclear

Manufacturers with oil and gas experience can find new opportunities in nuclear, but must be ready to meet the sector's demands, says Andrew Storer of Nuclear AMRC

W

ith the oil and gas downturn still restricting investment, engineering suppliers to the sector are increasingly looking for opportunities elsewhere. Many are looking at the civil nuclear sector and its demands for safetycritical precision engineering to support new build and decommissioning.

Decommissioning Authority (NDA) currently spends around £1.8bn a year with its supply chain, and has mapped out activity for the next 100 years – clearly, there are serious long-term opportunities for companies which can provide bespoke solutions to specific challenges, or produce high-volume items such as waste containers to strict standards.

Nuclear offers huge opportunities

Manufacturers seeking to enter the nuclear supply chain need to prove they can work to the stringent quality standards demanded by regulators and the industry's top tier. For companies with experience in oil and gas, the general demands will be familiar – highintegrity precision-engineered components and fabrications which will perform over long periods in extremely tough environmental conditions, delivered to cost, on time and with no risk.

But even experienced energy sector suppliers are likely to need a helping hand to meet the specific demands of nuclear. That support is available through the Fit For Nuclear (F4N) programme.

Energy companies are planning to build up to 16GW of new nuclear power at six sites around the UK. This will require a total investment of at least £60bn, and developers have committed to spending at least 60% of that with UK companies. The new build programme has been slow to start, but last year's final investment decision on Hinkley Point C means that things are finally moving.

EDF Energy has already invested several billion pounds in site preparation and is aiming for generation by the mid-2020s.

With all but one of the UK's current nuclear fleet scheduled to be retired by 2030, the need for new build is becoming pressing.

The UK is also faced with the challenges of cleaning up its legacy reactor sites, including the world's largest decommissioning site at Sellafield. The government's Nuclear

44 energyfocus | www.the-eic.com

Making the transition

Specialist programme fills gaps F4N is a unique service which lets companies measure their operations against the

standards required to supply the nuclear industry, and take the necessary steps to close any gaps. It has been developed by the Nuclear Advanced Manufacturing Research Centre (Nuclear AMRC) in collaboration with its top-tier industry partners.

F4N is based on a detailed gap analysis covering six key categories of business operation and performance, plus a checklist of nuclear-specific requirements. It is not a formal qualification or accreditation, but it has become a recognised badge for nuclearready manufacturers.

Over 600 UK manufacturers have now taken the initial F4N online assessment, with most receiving ongoing support from the Nuclear AMRC's industrial advisors and nuclear specialists. Completing the programme requires commitment and drive from the company's senior managers, and typically takes 12–18 months – although some companies with oil and gas experience have completed it in just four months.

Delivering real impact The majority of manufacturers entering F4N are active in the oil and gas sector, according to a recent survey of participants, and come from all tiers of the supply chain.

Precision engineering firm NOV Gateshead, part of US-based National Oilwell Varco, won

F4N: Nuclear

(Above) Oil and gas supplier Abbey Forged Products secured interest from nuclear buyers after completing the F4N programme (Below) The Nuclear AMRC offers access to advanced production-scale equipment

its first nuclear order after being granted F4N status. The firm supplies high pressure valves, flowlines and precision machined components to oil and gas clients, and entered F4N as part of a programme of diversification into new markets.

‘Because we've always been in oil and gas, getting the F4N badge shows that we are committed to diversification and can support the nuclear sector,’ said Business Development Manager Richard Bathan. ‘It's given us prestige and credibility.’

NOV Gateshead received its first nuclear enquiry, for a complex machined component for a decommissioning contract, soon after completing the F4N programme. The firm has already secured follow-on work, and is now targeting £3–5m of nuclear orders a year.

Specialist heat exchanger manufacturer Heatric, part of the Meggitt group, also entered F4N to support diversification from its core oil and gas business.

The Poole-based business is now targeting opportunities in new build, decommissioning and emerging areas such as small modular reactors.

‘There are clearly great opportunities out there for us,’ noted Heatric's Manufacturing Development

Manager Paul Morris. ‘The F4N questions were very much aligned to what we were already doing in levels of compliance for oil and gas.’

Further down the supply chain, Sheffieldbased Abbey Forged Products, a specialist supplier of forgings up to 1,800kg, has received a number of new enquiries after completing F4N last year.

‘We have started selling the fact that we're Fit For Nuclear, and there has been interest from customers who are in the nuclear sector,’ said Business Development Manager Lee Thomas. ‘When that work does start to filter down to the market, we will be well positioned rather than trying to jump in at the last minute.’

Helping companies diversify In the survey of companies at all stages of their F4N journey, around half said they have already experienced meaningful business benefits. A significant proportion said they have won new orders or enquiries as a result of F4N – many more said it's simply made their business better. Nine out of 10 participants would recommend the programme to other manufacturers.

The survey also showed a strong appetite from companies to link their business development with manufacturing R&D to expand their technical capabilities. As part of the government-backed High Value Manufacturing Catapult, the Nuclear AMRC works with companies to develop new capabilities and explore innovative processes, using some of the largest and most advanced manufacturing facilities available for collaborative R&D anywhere in the world.

Many F4N companies have supplemented their journey of business improvement by working with the centre's researchers to reduce their manufacturing cost, risk and time, and to investigate new technologies and processes without any risk to their current production. Heatric, for example, is collaborating with the Nuclear AMRC to investigate automated welding technology to reduce cost and lead times.

The Nuclear AMRC is now working with the EIC to help more companies diversify from oil and gas into nuclear, and

The F4N journey Fit For Nuclear is not a formal qualification, but a journey of business improvement.

The process typically takes 12–18 months.

capability 1Nuclear questionnaire

Complete an initial nuclear capability questionnaire through the Nuclear AMRC’s F4N online tool at www.f4n.namrc.co.uk

2 Online assessment

The full F4N online assessment covers six key categories of business operation and performance, with 10 multiple-choice questions in each category.

3 Site visit and verification

You will receive an initial rating, based on the information you have provided. On meeting the minimum standard, an F4N advisor will contact you to arrange a visit to your company to review and verify your answers.

4 Action plan

Your F4N advisor will support you as you create an action plan to close any gaps in performance. Once your action plan is put into practice, its nuclear specialists and advisors will review your progress and help you develop your capabilities. This step may take up to six months. On meeting all the standards, you will be granted Fit For Nuclear and added to the online directory of F4N companies.

5 Nuclear expert support

The Nuclear AMRC will appoint an experienced nuclear specialist to help you identify specific opportunities in the nuclear sector. Its specialists can help match your capabilities with current and upcoming tenders and make sure you’re in the best position to win work.

6 Access to ongoing support Take advantage of the Nuclear AMRC’s other support programmes and capabilities, and promote your participation in the F4N programme.

ensure that EIC members can access its facilities and support.

By Andrew Storer, Managing Director, Nuclear Advanced Manufacturing Research Centre For further information: To find out more, visit www.namrc.co.uk www.the-eic.com | energyfocus

45

Nuclear Turkey new build

Tempted

by Turkey?

Energy Focus reviews Turkey’s progress in nuclear power development

T

o aid economic growth, reduce it heavy reliance on fossil fuels and cut back its reliance on Russian and Iranian gas for electricity, Turkey is looking at nuclear power to help diversify its energy mix.

With a population of 77 million and electricity demand increasing by 7% annually, Turkey’s new nuclear power programme aims to provide 5% of the country’s energy by 2023 and 15% by 2030.

Turkey plans to build nuclear power plants at three sites: Akkuyu, on the Mediterranean coast; and Sinop and Igneada, both on the Black Sea coast.

Akkuyu The formal groundbreaking ceremony for the Akkuyu plant took place in April 2015 with major construction works expected to start in February 2018. The Turkish Ministry of Energy has announced that it will grant the construction licence, which allows formalising of a land site and general construction works to start, later this year.

In accordance with an agreement signed

by Turkey and Russia in 2010, Rosatom (Russia's state nuclear company) will build, own and operate the Akkuyu plant. The US$20bn nuclear power plant (NPP) will consist of four VVER-1200 units, each of which will be capable of generating 1.2GW of

The valley of Akkuyu, in the southern province of Mersin, where Turkey's first nuclear plant is now being built

46 energyfocus | www.the-eic.com

electricity. It is expected that the facility will produce approximately 35bn kilowatt-hours of electricity per year once completed. The Akkuyu power plant is forecast to begin operating in 2023 at the latest with a service life estimated at 60 years.

Sinop Turkey’s second plant will be built in Sinop by a consortium comprising Japan’s Mitsubishi Heavy Industries (MHI), Itochu, France's ENGIE and AREVA, and Turkish state electric generation company, EUAS. Technical feasibility studies that will determine the site suitability of Turkey's Sinop NPP are expected to be completed by the end of this year. MHI has said that they aim to complete all technical and commercial feasibility studies by March 2018 before applying for site and construction licences.

The US$22–25bn Sinop project calls for four units (a total capacity of 4.6GW) with the first unit to commence operating in 2023.

The ATMEA1 reactors, developed by MHI and AREVA are generation III+ pressurised water reactors developed using verified French and Japanese nuclear technology.

There are also plans to build a US$1.9bn nuclear technology centre in Sinop.

Igneada China is in line to build Turkey’s third NPP,

with US-derived technology. Since November 2014, Turkey has been in exclusive negotiations with China’s State Nuclear Power Technology Corporation (SNPTC) to build a NPP using reactors from the US firm Westinghouse. More recently, it has been reported that Turkish President Erdo an and his Chinese counterpart President Xi Jinping have agreed to accelerate the construction process. The bidding process is expected to be opened in 2017, with SNPTC currently favourite to win the contract.

Making it happen Turkey has pledged to work closely with the International Atomic Energy Agency to ensure safe construction and strict quality controls. To fulfil its nuclear ambitions, the country is working on developing the necessary laws and regulatory framework to create a sound investment environment.

IMAGES: GETTY/ISTOCK

Turkey pushes on with nuclear ambitions

As Turkey develops its civil nuclear programme to meet growing demand for electricity, opportunities exist for UK companies to enter the Turkish market. These include: Regulatory assessment and licensing Regulatory framework (materials, use, storage, transportation) Inspection and enforcement Nuclear licensee integration Waste management and oversight Technology and knowledge transfer and strategy In-house deterministic and probabilistic safety analysis delivery Core design, fuel and performance responsibility Integration of design, maintenance and operating practices Condition assurance Development and implementation of condition management There are also opportunities for the UK in the areas of training and human resources, supply chain capacity building and security.

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Renewables US offshore wind

Still in its infancy US offshore wind offers huge opportunities, as the country looks to draw on UK and European expertise to advance development, writes the EIC’s Amisha Patel

B

ack in 2001 when Cape Wind was proposed as America's first offshore wind project, the US offshore wind market barely existed. Today, the UK and Europe is leading deployment of offshore wind on a massive scale with over 12GW in operation, and the US has commissioned its first ever project – the Block Island Wind Farm – even though Cape Wind fell through. The Block Island project saw five commercial turbines connected to the grid last summer, most of which were manufactured in mainland Europe, and drew on European installation experience.

The industry learnt crucial lessons from the Cape Wind project about the importance of community engagement and planning processes. This, coupled with the experience of building Block Island, has given the US offshore wind sector real momentum. With many states

putting plans in places for projects, this market is set to take off.

The prospect of promising developments in the US is catching the attention of European companies that can export their years of experience in the field. These include some of the largest companies in the world namely, DONG Energy, Siemens and Statoil – who, along with construction and engineering capabilities, bring a lower cost of capital which has been a key focus in Europe.

Several projects in the US are now in the advanced stages of development and are scheduled to begin operation post 2020.

Notably, the announcements of unprecedented commitment to deployment offshore Massachusetts and New York.

Massachusetts In Massachusetts, there are a total of five wind energy areas designated by the government

for offshore wind development.

The Energy Bill passed in August 2016 included a requirement for utilities to contract 1.6GW of offshore wind power by 2027.

Massachusetts has invested in infrastructure to encourage deployment with a marine terminal to support offshore wind projects and a blade testing centre to attract more technology companies.

With Deepwater Wind, DONG Energy and Vineyard Wind all announcing their intent to use the New Bedford Marine Commerce Terminal when construction activity commences in their respective lease areas, activity is really ramping up in this area. The remaining two areas are expected to be leased in 2018.

Most recently DONG Energy has secured the lease for the Bay State Wind project. Global provider of engineering and technology-centric professional services Lloyd’s Register has

At a glance: Massachusetts Deepwater Wind, Deepwater One project 1GW – largest ever planned US project DONG Energy/Eversource Energy, Bay State Wind project – potential for up to 2GW Vineyard Power will develop a 160,000-acre lease area and has completed the geophysical and geotechnical surveys for the site

used the expertise of its subsidiary SGC Engineering to support DONG Energy in the evaluation of the Bay State Wind project, with its offshore site and export cable route geophysical and hydrographic surveys.

The first tender round to obtain a power purchase agreement (PPA) is anticipated to take place in June 2017, which will commit the winning project to deliver power four years later.

The remainder of 2017 will see the area focus on the implementation of the

spins into life

US offshore wind

48

US offshore wind: Renewables

legislation and the procurement process. The Massachusetts Clean Energy Center (MassCEC) has issued a request for proposal for engineers to analyse other sites in the state where the industry could establish a base for ancillary work, operations and maintenance, and future manufacturing.

IMAGES: ALAMY/ISTOCK/SHUTTERSTOCK

New York Meanwhile, New York has committed to build 2.4GW of offshore wind by 2030 starting with the Deepwater One – South Fork 90MW project in the Rhode Island-Massachusetts lease area.

Earlier this year a PPA was signed between the developer Deepwater Wind and Long Island Authority. Construction is set to start as early as 2019 with a target commercial operation date of 2022.

The developer is also trying to secure a PPA for the 201MW East End Wind project to be developed alongside the South Fork project in the same lease area. All the projects will be built over one construction campaign if the latter projects obtain

approval.

Statoil Wind is also looking to develop a project in New York, winning a lease at the end of last year. The New York State Energy Research and Development Authority is currently putting together a strategy to develop the state’s offshore wind resources. The Offshore Wind Master Plan is expected this year and will further identify sites and set targets for capacity and detail target commercial operation dates.

New Jersey In neighbouring New Jersey, DONG Energy has secured rights to explore the potential development of 1GW of offshore wind with its Ocean Wind project. US Wind Inc also has plans to develop at least 600MW in its lease area.

Maryland Elsewhere, Maryland aims to bring 5GW of capacity online within the next 10 years or so.

Maryland’s Public Service Commission (PSC) has approved applications that were submitted

by US Wind Inc and Skipjack

Offshore Energy LLC for up to US$1.9bn of developments. The state has now become the first to back commercial scale construction. The PSC's decision is contingent on approval by the federal government of the developers' site assessment plans, as well as construction and operations plans.

North Carolina In North Carolina, Avangrid fought off competition from Alpha wind and Statoil to win a bid to develop the Kitty Hawk zone. Regulators expect to execute the lease by the summer once the review is completed.

However, with the state being less progressive in terms of policy to support development of the project, construction is likely several years away.

California Moving across to the West Coast, the debut auction for the Californian lease is anticipated to take place by the end of 2018.

State officials are working with the federal agency to gather data for the entire West Coast with the first sale set to focus on the central region where developers

At a glance: Maryland US Wind of Baltimore and Skipjack Offshore Energy, a subsidiary of Deepwater Wind, to build a total of 368MW of capacity US Wind Inc. Maryland Offshore Wind Farm – 248MW 62 wind turbines will be installed in 20–30m water depth, inside an area spanning nearly 80,000 acres. The project is expected to be operational 2020 Skipjack Offshore Wind Farm – 120MW 15 turbines between 17 and 21 miles offshore.

The project is expected to be operational in early 2022

Trident Winds and Statoil have already staked claims. The Bureau of Ocean Energy Management (BOEM) and the California Energy Commission will present initial findings and outline a proposed call area at an Intergovernmental Renewable Energy Task Force meeting on 13 July.

www.the-eic.com | energyfocus

49

US offshore wind: Renewables

MASSACHUSETTS

CAPE WIND EMI 1GW BLOCK ISLAND Deepwater Wind 30MW DEEPWATER ONE Deepwater Wind 1GW

RHODE ISLAND

BAY STATE WIND DONG Energy; Eversource Energy Potential of up to 2GW VINEYARD WIND Copenhagen Infrastructure Partners; Avangrid Renewables 1GW

NEW JERSEY PENNSYLVANIA

NEW YORK

DEEPWATER ONE – SOUTH FORK Deepwater Wind 90MW EAST END WIND Deepwater Wind 201MW NEW YORK Statoil More than 1GW

D

OCEAN WIND DONG Energy 1GW NEW JERSEY US Wind Inc 600MW

VIRGINA

NEW JERSEY

US WIND INC MARYLAND US Wind Inc 248MW SKIPJACK Skipjack Offshore Wind 120MW

NORTH CAROLINA

MARYLAND

KITTY HAWK ATLANTIC WIND LEASE SALE Avangrid Renewables Potential 1.5GW

NORTH CAROLINA

For further information: Further details of the projects mentioned in this article are available on the EIC’s global project tracking database, EICDataStream.

CONNECTICUT

AN

By Amisha Patel, Head of Power, Nuclear and Renewables, and Public Affairs, EIC

NEW HAMPSHIRE

MASSACHUSETTS

L RY

Cost reductions will be crucial for the growth of America’s offshore wind market, and it is widely believed across the industry that the US can benefit from European experience. In the US, cost reductions will depend on near-term deployment as well as sustained investment in offshore wind technology and the supply chain. Future cost reductions will come through technology advancements, as well as streamlining the construction and installation process. The industry certainly has the potential to benefit from 25 years of European experience making the US offshore market one to watch.

NEW YORK STATE

E

Low costs will pave the way

As it stands, developers have collectively paid an estimated US$60m to secure leases, as described, for a combined 18GW of offshore wind potential, which underscores the private sector’s strong confidence in the US market. However, for the industry to progress it needs to have policies in place to support the ambitious deployment targets.

While opportunities are abundant, European developers must still grapple with plenty of risks in the US market. Local opposition, limited supporting infrastructure and no requirements for offtake agreements to name a few. In Denmark, for example, the government appoints sites, performs all the permitting and grid connection work and then holds auctions.

As a result, project prices in Europe are at record low prices.

At the end of 2016, Vattenfall submitted a winning bid of US$53/MW per hour (MWh) for the 600MW Kriegers Flak, 58% lower than the cap price for the Danish offshore wind tender.

MAINE VERMONT

MA

Lessons from Europe

US OFFSHORE WIND PROJECTS (EAST)

R WA LA

This record-low bid proves that the European Union’s goal for an offshore wind levelised cost of energy of US$112/MWh by 2020 is possible. In the UK, costs have lowered by almost a third since 2012 to the targeted £100/MWh, well ahead of the 2020 target date.

But it is DONG Energy’s zero subsidy bid to build two projects in the German North Sea – relying on wholesale market prices instead of support from the government – that is a major breakthrough for the cost competitiveness of offshore wind and demonstrates the technology’s massive global growth potential.

DE

The federal agency plans to issue a call for information and nominations by the end of the summer, which will include a 45-day comment period.

Identification of the area is expected by the year-end or in early 2018. At the same time, BOEM will begin an environmental assessment and an auction could follow late in 2018 at the earliest. US developer Trident is proposing to build a 765MW floating wind farm off Morro Bay and is targeting a 2025 commercial operation date.

Statoil is also interested in the 68,000-acre site 33 miles off the coast but is yet to outline any firm development plans.

STAGES OF WIND FARM DEVELOPMENT Expression of interest Leased PPA/subsidy approved

Project on hold Fully commissioned Planning

US OFFSHORE WIND PROJECTS (WEST) MORRO BAY Trident Winds 765MW MORRO BAY Statoil Capacity TBC

NEVADA

UTAH

CALIFORNIA ARIZONA

Source: EICDataStream

www.the-eic.com | energyfocus

51

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Renewables EMEC

Exporting world-leading marine energy expertise Eileen Linklater, Commercial Manager at EMEC, tells Energy Focus why the UK is the undisputed global leader in marine energy

Forging alliances Most recently, EMEC has been engaged to provide feasibility studies around the creation of CMEC – a Chinese version of the Orkney facility – in a project supported by the UK Foreign and Commonwealth Office and China-Britain Business Council’s Prosperity Fund.

‘Our relationship with China has been built up over several years,’ says Linklater.

‘Like many of our international collaborations, it’s taken time to lay the groundwork, creating understanding of the benefits the industry can bring, both in terms of the positive impact on climate and the economic potential.’

Supply chain benefits According to Linklater, EMEC’s international collaborations are also opening up opportunities for UK supply chain companies.

‘Where we’ve helped with the groundwork in other countries we’ve seen Orkney-based operators going over to these places and doing business themselves,’ she says. ‘Through our sharing of knowledge we’re creating an export market for other local supply chain companies.

‘Our vision is for a globally successful marine energy industry,’ she adds. ‘To reach that goal as quickly as possible, we feel the need to help these other regions develop in a way that’s complementary to what we’re trying to do here, rather than have people trying to reinvent things in different places.’

Through our sharing of knowledge we’re creating an export market for other local supply chain companies R&D across the globe With this vision in mind, EMEC is also progressing many collaborative international R&D programmes. For example, Canadian company, Rockland Scientific, recently fitted innovative turbulence measuring instruments to EMEC’s bespoke Integrated Monitoring Pod (see top right photo) which enables 24/7 real-time data collection from a variety of sensors to undertake comprehensive concurrent environmental measurements, providing improved characterisation of high energy marine environments.

‘They’re deploying the same technology at the Fundy Ocean Research Centre for

Energy (FORCE) in Canada, so we’ll be gathering comparable data from different site conditions,’ says Linklater.

‘While the conditions are different in different parts of the world, we want to see some consistency around the standards that are developed and the research work that goes on, so that it has more value at the end of the day.’

Setting the standard To this end, EMEC has coordinated the development of 12 industry guidelines – six of which are being progressed for global adoption as the first international standards for marine energy. As the pace of the marine energy sector continues to pick up – Orkney developer Scotrenewables Tidal Power recently generated over 18MWh within a 24-hour period from its 2MW rated SR2000 turbine, under testing conditions at EMEC’s Fall of Warness site – Linklater says standards development will become increasingly valuable as technologies progress towards commercialisation.

‘Making sure that technical performance is verified all along the way, and performance claims checked and validated, is something we see as vital,’ she explains. ‘As the industry moves towards commercialisation, investors and insurers need to know how they can make investment decisions on these projects and they can’t do that without a reference point. Confidence is what it’s all about.’

IMAGES: SCOTRENEWABLES/EMEC

‘T

he biggest hook is the sheer level of experience we’ve got here in Orkney,’ says Eileen Linklater, reflecting on why the Scottish island community is the global epicentre of wave and tidal. As commercial manager of the Stromness-based European Marine Energy Centre (EMEC), Linklater works closely with a growing number of international agencies keen to replicate the Orkney test centre model. ‘People from all across the world come to visit EMEC. They feel it’s important to come here and see first hand how we do things.’

Established in 2003, EMEC remains the world’s only fully accredited marine energy test centre, hence the steady stream of international visitors heading its way. The centre has supported the deployment of more marine energy devices than any other single site in the world – 30 to date, from 19 different clients spanning nine countries.

In addition, EMEC’s specialists provide a range of consultancy and support services, with that expertise much in demand from emerging test sites and marine energy programmes in Canada, China, US, Japan, Taiwan, South Korea and Singapore.

Tidal Power's 2MW SR2000 tidal turbine being tested at EMEC's Fall of Warness site in April 2017

www.the-eic.com | energyfocus

53

EIC Member Focus Blaze

MY BUSINESS

Ann and Howard Johnson, Blaze Manufacturing Solutions

game changer in both safety, and oil and gas production optimisation.

Can you tell us a little bit about Blaze?

Howard: Blaze has established itself as a market leader in fire and gas safety solutions within the oil and gas and energy sectors. We are a family business with a team of 30 employees who will never settle for industry norms.

How did Blaze start out?

Ann: Feeling unchallenged at work, Howard set out to capture the excitement of running an ambitious company that would bring new ideas to a conservative industry. Starting out from our garden summer house, one of our first projects was a £1m contract in India!

What do you know now that you wish you’d known when you started the company?

Ann: Oh, where to start? We’ve made every mistake you can make and learnt a lot. We probably didn’t understand that Blaze would become our whole being, 24 hours a day, seven days a week. It isn’t for everyone.

What’s a typical day like at Blaze?

Ann: Howard starts ridiculously early while I come into the office at about 8.30am. We work in different sides of the business; if we’re both in the office we always go out to lunch together (me with papers hidden in my handbag to discuss with him at lunchtime).

What’s the best thing about running a family business?

Howard: Being able to work with our sons. There is nothing like it. If we weren’t all involved then we wouldn’t be able to work the hours we do. We all understand what has to happen and why.

54 energyfocus | www.the-eic.com

Energy Focus caught up with husband and wife team Ann, Finance Director, and Howard, Managing Director, to find out what day-to-day life is like at Blaze You won the 2016 EIC Supply Chain Breakthrough Award for your Flameshield 300TM fire protection solution, can you tell us about this product?

Howard: Flameshield 300™ is the only flexible pipework solution that fully complies with IMO A.753 and ISO 22899 criteria – the highest standards for fire safety. By design the system cannot block due to corrosion debris, therefore hot working and plant shutdown during installation are not required. Flameshield 300™ is a safe, costeffective and efficient solution, and such a

Blaze has come through the industry downturn really well, how have you managed this?

Ann: The downturn was brutal but we couldn’t give up. To move forward we had to take risks. We funded our own innovation so we could improve our offering and stepped into different markets. The biggest risk was Howard spending last summer in a copper mine in the Democratic Republic of the Congo – we now have a million-pound order from that mine!

What do the next 12–18 months look like for Blaze?

Howard: We have a solid order book in renewables and mining as well as the oil and gas sector. We want to deliver exceptional projects in these new sectors to build on the reputation we already have in oil and gas. We will also look to other sectors.

What's been Blaze's biggest highlight?

Ann: Genuinely, we could not believe we had won the EIC Breakthrough Award last year.

No one was more surprised than me when our name was announced.

Finally, this issue of Energy Focus explores how the industry can encourage the next generation of energy workers.

How do you think we can achieve this?

Howard: Through enthusiasm for our industry. The downturn has created a lot of apathy, with many experienced engineers retiring. It is our responsibility to create a culture of knowledge sharing to bring on the next generation. We embrace new ideas and work closely with schools and universities to ensure they see the energy sector as exciting.

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Rotork products and services help companies in the oil & gas, water & waste water, power, marine, mining, chemical, pharmaceutical and food industries around the world.

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Rotork Innovation A Client Support Programme that helps you to: • Protect your investment • Increase plant availability • Maximise productivity • Reduce cost of ownership • Protect the environments

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