OGV Energy's Europe Energy Review – October 2020

Innovative offshore logistics operations, the UK and European Union’s paths to net zero, and green energy commitments from major oil and gas firms were the highlights of the past month in European energy.    

Oil & Gas

Norway’s Equinor completed the world’s first logistics operation with a drone to an offshore installation. In this operation, a drone flew a 3D-printed part for the lifeboat system from the Mongstad base to the Troll A platform in the North Sea.

“Drones could reinforce safety, boost production efficiency and contribute to lower CO2 emissions from Norwegian oil and gas. Drones will also play a role as we shape new energy solutions on the Norwegian shelf,” Arne Sigve Nylund, Equinor’s executive vice president for Development and Production Norway, said in a statement.

Norway reduced its oil production in July by 120,000 barrels per day (bpd) to 1,739,000 bpd, as part of its plan to contribute to a faster stabilisation of the oil market with cuts in its production from 1 June until 31 December 2020, the Ministry of Petroleum said at the end of August. 

Maersk Drilling set in the middle of September an ambitious climate target as part of its overall sustainability strategy. Maersk Drilling will aim to reduce the intensity of carbon dioxide (CO2) emissions from its drilling operations by 50% by 2030.

“Our contribution to a sustainable energy future is to significantly reduce emissions from our operations and to explore ways to store CO2,” CEO Jørn Madsen said.

Renewables

Consultancy Wood Mackenzie published in September a report, ‘Closing the Gap: Technology for a Net Zero North Sea’, for the Oil & Gas Technology Centre (OGTC) and with support from Chrysaor and the Scottish Government. The report concluded that maximising the opportunities to innovate across the renewable and fossil fuel sectors could create more than 200,000 jobs across the UK and contribute more than £2.5 trillion to the nation’s economy by 2050. It would also create a diversified energy sector, support a new generation of highly skilled jobs and open up exciting export potential.

This vision could be realised with new investments of £430 billion, including in oil and gas platform electrification, optimised and standardised floating offshore wind designs, innovative hydrogen technologies to improve blue and green hydrogen production and yield, and new solutions to cut the costs of carbon capture and storage (CCS).

“We need to digitise our offshore energy sector and solve big challenges like energy storage, infrastructure redeployment, transmission systems and cost-competitive floating wind structures. By doing this, we can create strategic advantage and valuable export opportunities,” said Colette Cohen, CEO at OGTC.

The Crown Estate reported in the middle of September a profit of £345 million for the financial year 2019/20, up by 0.4% compared to 2018/19, driven by continued growth in fully operational offshore wind farms.

Earlier in September, Crown Estate Scotland published a new report examining how Scotland’s ports and harbours can tap into the huge potential created by the development of offshore wind in the future. The key finding of the research, carried out by technical consultants Arup, was that Scotland has good technical capability to support offshore wind port functions in some, but not all locations. 

“Scotland has fantastic port facilities as well as some of the best offshore energy resources in the world; making sure these two are successfully aligned can help us take a giant leap towards our Net Zero commitments, and help to build a green economic recovery for Scotland,” said Colin Palmer, Director of Marine for Crown Estate Scotland.

Scotland’s government announced in early September £1.6 billion funding to low carbon energy to secure a just transition to a net zero economy, including a £100-million Green Jobs Fund, investment in heat and energy efficiency and industrial decarbonisation. 

At the end of August the UK recorded a record-high share of wind power in its electricity generation, the National Grid said. On 26 August, wind power made up 59.9%, or 14.2 GW, of Britain’s electricity demand.
“Renewables are breaking records faster than anyone expected, and this new wind record is a clear signal of the future of our energy system,” RenewableUK’s Director of Strategic Communications Luke Clark said, commenting on the record.

The UK currently has wind energy capacity of 24 GW – 10.4 GW offshore and 13.6 GW onshore – and last year provided 20% of UK power, according to RenewableUK.

In carbon capture and storage, Europe could see US$35 billion in development spending through 2035, with most capacity coming in the UK, Rystad Energy said in a report in early September. Nearly 80% of the expected installed capacity of CCS projects is set to come from UK projects in the North Sea, Rystad reckons.

The Offshore Wind Industry Council (OWIC) and the Offshore Renewable Energy (ORE) Catapult reviewed the opportunities of green hydrogen production in the UK in a report in early September.

According to the report, the development of an indigenous green hydrogen industry could generate £320 billion for the UK economy and sustain up to 120,000 jobs by 2050. The UK has the right level of offshore wind capacity potential, and a strong industrial base, combined with world-leading academic research, to develop a sustainable, low-cost green hydrogen industry, one that produces hydrogen without CO2 emissions from electrolysis of water, the report found.

The European Commission presented on the 17th of September its plan to reduce EU greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.

“The energy system will be at the heart of this effort. We will build on the success story of the European renewables sector, look at all the tools at our disposal to increase our energy efficiency and lay a firm foundation for a greener Europe,” Kadri Simson, Commissioner for Energy, said in a statement.

Green Company News 

bp announced in early September a partnership with the city of Aberdeen under which bp will serve the citizens of Aberdeen as a strategic planning and technical advisor, helping to shape solutions for the city’s net zero path.

“Working in partnership with the Aberdeen City Council, we’ll explore opportunities like accelerating the adoption of electric and hydrogen-powered city vehicles, energy efficiency programs for buildings and circular economy,” William Lin, Executive Vice President, Regions, Cities and Solutions at bp, said.

bp also announced in September its debut in offshore wind, via a new strategic partnership with Equinor. bp will buy a 50% interest in Equinor’s Empire Wind and Beacon Wind assets in the United States for US$1.1 billion. The assets have the potential to power more than 2 million homes in the US. 

“The partnership also fits our strategy perfectly. It’s helping us pivot into becoming a truly integrated energy company, whilst also taking a significant step towards our aim of having developed 50GW of #renewables by 2030,” bp chief executive Bernard Looney said. 

Montrose Port Authority and SSE Renewables finalised plans in September for the operations and maintenance base for Seagreen offshore wind farm, after extensive consultation with the local community and other port users. The 1,075 MW Seagreen project, 27 kilometres off the coast of Angus, is a £3-billion joint venture between SSE Renewables and Total, and will be Scotland’s single largest source of renewable energy, providing a significant contribution to Scotland’s net-zero ambition and enough clean, renewable energy to power 1.3 million homes.

Equinor signed at the end of August Agreements for Lease (AfL) with The Crown Estate for two offshore wind farm extensions in the UK— Sheringham Extension and Dudgeon Extension—which are set to double the size of Equinor’s total capacity from its Norfolk operations to over 1,400 MW, enough to power over 1.5 million homes. 

Another major oil firm, Total, via its subsidiary Saft, created a joint venture with Groupe PSA/Opel named Automotive Cells Company (ACC), which will develop and manufacture high-performance batteries for the automotive industry from 2023. The JV plans mass production at two ‘gigafactories’ in Europe, in Douvrin, France, and Kaiserslautern, Germany.

“Our ambition is to leverage the recognised expertise of our subsidiary SAFT in batteries and the industrial know-how of our partner PSA to meet the strong growth of electric vehicles in Europe,” Total’s chairman Patrick Pouyanné said. 

Italy-based energy infrastructure providers Snam and Saipem signed an agreement to start working together on new energy transition technologies, from green hydrogen to capturing and reusing CO2, with the aim of fighting climate change and contributing to the launch of the hydrogen market, supporting the European Commission’s Hydrogen Strategy.

Norwegian subsea contractor Ocean Installer and Norway’s ship builder Vard have partnered to develop one of the world’s most advanced turbine installation vessels for offshore wind. The new vessel will be able to install future giant wind turbines offshore.

“We will jointly be developing one of the world’s most advanced vessels for installation of future offshore wind turbines, which are too large for the existing turbine installation fleet,” said Erik Haakonsholm, General Manager of Vard Group Offshore & Specialised Vessels. 

Read the latest issue of the OGV Energy magazine HERE.