Europe Energy Review

New oil and gas discoveries offshore Norway, a new wind power record in the UK, and a lot of green energy projects and deals featured in Europe’s energy sector at the end of 2023 and early 2024.

Oil & Gas

Neptune Energy and its partners announced in December a new discovery at the Kyrre prospect and confirmed the volumes for the Ofelia appraisal well, both located in the PL 929 licence, close to the Gjøa field in the Norwegian sector of the North Sea.  

Neptune has completed the Ofelia appraisal well, 35/6-4 ST2, in the Agat formation. The estimated recoverable volume is in the range of 16-33 million barrels of oil equivalent (mmboe). In addition, the 35/6-4 A side-track was drilled into the overlying Kyrre prospect, resulting in a new gas discovery, whose estimated recoverable resources are between 11-19 mmboe of gas, bringing the total recoverable volume from both discoveries to approximately 27-52 mmboe.

“Confirming the Ofelia volume as well as making another discovery nearby, further strengthens our understanding of the Greater Gjøa Area which is an important growth hub for the business in Norway,” Neptune Energy’s Managing Director for Norway and the UK, Odin Estensen, said.

“The dual discoveries allow for a potential fast track, low cost, and low carbon development.”

Norway’s Equinor and Germany’s SEFE have entered into long-term gas sales agreements and pledged to pursue large scale hydrogen supplies. After the Troll gas sales agreement in 1986, the deal to supply SEFE (Securing Energy for Europe) with around 10 billion cubic meters of natural gas per year from 1 January 2024 until 2034 is one of the largest gas sales agreements Equinor has signed as a company.

“This is a response to Europe’s need for long-term, reliable supply of energy and a viable route to decarbonization at scale”, Equinor’s CEO Anders Opedal said.

Equinorhas also agreed to sell all its assets in Azerbaijan to Azeri state firm SOCAR. The assets comprise a 7.27-percent non-operated interest in the Azeri ChiragGunashli (ACG) oil fields in the Caspian Sea, an 8.71- percent interest in the Baku-Tbilisi-Ceyhan (BTC) pipeline, and 50 percent in the Karabagh field.

“Equinor is in the process of re-shaping its international oil and gas business, and the divestments in Azerbaijan are in line with our strategy to focus our international portfolio,” said Philippe Mathieu, Equinor’s executive vice president for international exploration and production.

Low-Carbon Energy

The UK set at the end of December a new wind energy generation record of 21.8 gigawatts (GW) of clean electricity, according to National Grid ESO, which said that the record was set in the half-hour period between 8.00 and 8.30 am in the morning on December 21, providing 56 percent of Britain's electricity. This beatthe previous record of 21.6GW set on 10January 2023.

“Wind power is taking centre stage in our modern clean energy mix, strengthening our energy security and keeping Britain powered up at the coldest, darkest time of the year,” RenewableUK's Chief Executive Dan McGrailsaid.

“In the new year, the renewable energy industry will be working closely with the Government to ensure that we maximise investment in new projects, most critically through the next auction for new clean energy projects, to lower everyone’s energy bills and get us to net zero as fast as possible,” McGrail added.

The amount of UK electricity generated from fossil fuels fell by 22 percent year-on-year in 2023 to the lowest level since 1957, an analysis from Carbon Brief found.

Thanks to a rapid expansion of renewable energy sources, electricity from fossil fuels in the UK has dropped by two-thirds since the peak in 2008, according to Carbon Brief. Within that total, coal power generation has plunged by 97 percent and gas – by 45 percent. At the same time, electricity from renewables has jumped six-fold since 2008.

The UK government unveiled a plan to make the country a global market for carbon capture, usage and storage (CCUS). The plan, CCUS Vision, sets out how the UK will transition from early projects backed by government support to becoming a competitive market by 2035, meaning UK companies will compete to build carbon capture facilities and sell their services to the world.

CCUS Vision includes measures such as moving to a competitive allocation process for carbon capture projects from 2027 to speed up the building of the UK’s CCUS sector, and creating the conditions for projects that cannot transport CO2 by pipeline to enter the market from 2025 onwards, using other forms of transport such as ship, road, and rail.

“The UK holds a strategic advantage compared to other countries thanks to its unique geology, skills and infrastructure as an island nation. It also offers enough space under the North Sea for up to 78 billion tonnes of CO2,” the government said.

In response to CCUS Vision, Offshore Energies UK said that “the announcement takes the UK a step closer to net zero and will also bring investment into a new industry which will ultimately create 50,000 new jobs.”

OEUK sustainability and policy director Mike Tholen commented,

“The UK is on the brink of a transformation that will allow us to provide carbon capture and storage facilities to industry here and to help our European neighbours. This is good news for tackling climate change and for boosting the UK economy.”

Separately, OEUK said in a report that the North Sea energy workforce offers an unrivalled pool of skilled oil and gas specialists that must be retained to power the transition to clean energy.

A successful homegrown energy transition using existing skills could see the UK energy workforce swell by 50 percent with new jobs bringing the total number employed in the sector to 225,000 by 2030, according to the OEUK’s Workforce Insight 2023 report. More than 90 percent of all those currently working in oil and gas production and its associated supply chain have skills that are potentially transferable to wind, carbon capture, usage and storage, and clean hydrogen energy production, the report highlights.

“This cannot be a debate about oil and gas versus renewables. We need to support both oil and gas and renewable energy since they are increasingly the remit of the same companies and the same people,” said Katy Heidenreich, OEUK’s director of supply chain and people.

The Crown Estate has announced an Offshore Wind Leasing Round 5, which seeks to establish a new floating wind sector in the Celtic Sea off the coasts of South Wales and South West England. It is expected to be the first phase of commercial development in the Celtic Sea, bringing an exciting opportunity to create up to 4.5GW of new renewable energy capacity.

Commenting on the announcement, OEUK wind & renewables manager ThibautCheretsaid,

“Combined with INTOG and ScotWind, this leasing round will not only help the UK establish a new floating wind sector, but it will also provide opportunities for local communities, expand our energy mix, and help the UK to maintain a homegrown energy transition.”

Following the launch of the first hydrogen allocation round (HAR1) in July 2022, the UK government has selected the successful projects to be offered contracts—these are 11 projects totalling 125 MW capacity. This round will provide over £2 billion of revenue support from the Hydrogen Production Business Model, which will start to be paid once projects become operational.

The pipeline of energy storage projects which are operational, under construction, consented, or being planned has increased by more than two-thirds over the last year in terms of capacity, a report released by RenewableUKshowed in December.

In company news, RWE said it would acquire the UK Norfolk Offshore Wind Zone portfolio from Vattenfall. The portfolio comprises three offshore wind development projects off the east coast of England – Norfolk Vanguard West, Norfolk Vanguard East, and Norfolk Boreas. Vattenfall said in 2023 it would halt the development of Norfolk Boreas due to surging costs and challenging market conditions pressuring new developments.

After 13 years of development, the three development projects have already secured seabed rights, grid connections, Development Consent Orders, and all other key permits, RWE said.

Tom Glover, RWE’s UK Country Chair commented, “We very much welcome the UK government’s recent decisions on future offshore wind auctions which provides us with the confidence to invest and represents a positive step in maximising the UK’s clean energy potential, ensuring sustained and lowest prices for consumers and creating good quality jobs.”

EDF Renewables has obtained planning consent for its Tye Lane Solar Farm north-west of Bramford. The solar farm will be capable of generating enough low carbon electricity for the domestic needs of more than 14,500 households annually while saving around 17,100 tonnes of carbon dioxide emissions each year.

The Richborough Energy Park battery storage project, developed by Pacific Green, and owned by the Sosteneo Energy Transition Fund, is now connected and energised on the electricity transmission network following work by National Grid to plug the facility into its 400kV Richborough substation in Kent. Richborough Energy Park’s 100MW/100MWh battery will boost the capacity and flexibility of the network, helping balance the system by soaking up surplus clean electricity and discharging it back when the grid needs it – with a capability to power 250,000 homes for an hour. The project is built on brownfield land previously occupied by a coal-fired power station.

Renewable Power Capital (RPC) and Elmya Energy have entered into a joint venture to develop 4 GW of battery energy storage systems (BESS) and co-located solar PV assets in the UK. The partners are targeting a development pipeline of 4 GW in total, made up of large-scale transmission and distribution assets spread across England and Scotland.

Statkrafthas agreed to buy the Red John Pumped Storage Hydro Scheme in Scotland from Intelligent Land Investments Group (ILI). The 450 MW project on a site south-west of Inverness was granted consent by Scottish Government ministers in June 2021. Pending a final investment decision, the project will capture excess renewable energy, and store it until needed, helping provide security of supply.

The Bluefield Solar income fund, focused primarily on acquiring and managing solar energy assets, has signed an agreementwith GLIL to create a long-term strategic partnership to investin UK focused solar assets.
    
Empower Renewables and Galileo Green Energy formed a joint venture, Galileo Empower Ltd, which will target an overall development pipeline of 10 GW across six key markets in Northern Europe.

Octopus Energy’s generation arm launched a joint venture with Nexta Capital Partners to develop up to 1.5 GW of commercial-scale battery storage systems across several projects in Italy.

Read the latest issue of the OGV Energy magazine HERE