Neptune Energy “We need clear policy to further the energy transition”

Global energy demand is increasing and with climate agreements looming, the future of the energy mix will see major changes. We spoke to Lex de Groot, managing director of independent E&P company Neptune Energy Netherlands, on how he sees the respective roles of offshore wind, oil, gas and marine energy. While also touching upon cooperation between industries, something which will also be discussed during Offshore Wind Conference 2019.

“The way I see oil and gas moving forward is that it will be the most important energy source for decades to come”, states de Groot. “With every generation that walks on this earth, we see energy demand increasing by 25 per cent on average. So that means looking forward on how countries are developing and how populations are growing. There is a clear demand for energy and the only source we can use on the short term is oil and gas. And especially gas will play an important role. Gas, in the end, has the lowest carbon food print and as such will be important in both supplying energy as well as balancing energy supply.”

Recently it was announced the Q13 A Amstel Platform will be used for a hydrogen pilot. Why hydrogen? “That’s a good question”, quips de Groot. “At some point in the future, maybe in ten fifteen years from now, there will be more electricity available than there is demand onshore, but it would be a waste to just to let that electricity generation go. You could also capture this energy and store it in the form of hydrogen.” Hydrogen can be used for fuel cells in cars, but also in industrial applications and electrifying platforms offshore. “Using hydrogen for existing infrastructure that we have to produce gas is a really important facilitator for the energy transition ahead of us”, comments de Groot. “This could potentially mean we can build more wind farms and maybe build them at a faster rate.”

The Q13 A Amstel platform will be used for hydrogeneration pilot. It will test a new technology and it will test this technology on sea water, so the first offshore pilot to create hydrogen. It will be true green hydrogen. And why is that? Because the Q13 A platform is electrified. A 12 kilometre electric cable will run from Scheveningen harbor towards the platform.  And we get the energy from wind farms. It is green energy. That there will be converted to green hydrogen. So it is really the energy transition. Let’s say the simulation of the energy transition in that sense. The future ahead is one where there will be an abundant supply of electricity that we can transport and the energy that is contains can be transport by hydrogen. And that is really what has been simulated here. So green energy from wind parks will be converted into therefore green hydrogen. And will be transported by existing pipelines, de Groot explains.

“We want to reuse platforms because it accelerate and facilitates the energy transition”

“We want to reuse platforms because it accelerate and facilitates the energy transition. If you remove them and then in a few years’ time you find out that could have been a good idea to use for CO2 storage or hydrogeneration, it would be a waste. It takes time to build it, it gives a higher cost. So the most efficient way, is to think about it now, which platforms can we reuse and what can I do with it? And to enable that, we need also a clear policy developed from the government how to deal with that. How we deal with CO2 storage, how do we deal with hydrogeneration, who operates it, who does it, who is liable, all this types of things, where are the incentives to  make this possible. If you are really committed to the energy transition. It means that yes, how the carbon production will reduce, but there is still a lot to find, so we need to commit to leaving infrastructure at place, it can be reuse and in the meantime supply gas that is still to be found offshore and supply it to the households”, says de Groot.

One thing De Groot feels strongly about is the need to have policy to enable the energy transition and part of that policy should be an incentive to locate new gas fields. “We need a clear policy. We need a policy on reuse of this platforms. But, we also need a policy to allow us to supply gas to the Dutch households. We can produce gas safely offshore from the Dutch North Sea. We have all the regulations in place that make sure that we do it safely. It has the lowest carbon footprint. It supplies jobs, it supplies energy to the societies, tax income. And there is still a lot to find. TNO says there is a hundred billion cubic meter of gas still to find and to produce from the Dutch part of the North sea. So why not capture that, by using it, enable the energy transition that is ahead of us. The gas that will be used. It will allow the platform to stay in place and therefore also allow the platforms to be reused on the longer term for instance CO2 storage or hydrogeneration or anything that we develop offshore where we have system integration and it will enable system integration.”

He further states the need for a clear policy. “We need the true story, we need regulations that deal with the liabilities that are there. If you leave the infrastructure in place there are liabilities attached with that. Who takes that how do we deal with that. It is not about escaping liabilities but it is about clarity. We also need incentives. Gas will play an important role for decades to come. For the Netherlands, for the world, but also for the Netherlands. Gas that we need in this period, the decades to come, can be produced from the Dutch offshore, can be produced from safely, can be produced giving people jobs here in the Netherlands. It can be produced giving tax income. So it has many benefits. And also by using these gas reserves, that still be found, the hundred billion cubic meter, according to TNO. By using this to allow us to prepare infrastructure for what comes next in the energy transition. So for hydrogenation for CO2 storage or electrification purposes. The stuff is out there, the platforms are out there, the pipelines are there. We can remove them. We are, of course, willing to remove them. We take our responsibility. But if it can be reused. It is more efficient to do it. And it will it also make it faster. So that it is not only about reuse itself but it exactly accelerates the energy transition.

De Groot says that the size of Neptune Energy facilitates quick innovation. “When my team has an idea they can work on it and bring it in practice immediately effectively. It is not a large organization that have typically processes which make it much more difficult to drive innovation. It is a kind of disadvantage of a this diseconomy of scale basically . We have the economy of scale that allows innovation, allows young talented professionals to really drive the business. Drive the solutions that we are looking for. We want to do business in a different way. That gives next to the innovation also acceleration. That we do things quickly bringing returns or shareholders”

“We see opportunities there by applying these new ideas”

“Innovative solutions typically come from young professionals combined with the experiences we have and combined with the financial strength that we have, De Groot continues. “So whether it is here in the Netherlands on a small platform or a big development as we do it in Norway. Where we are building the longest heated pipeline ever applied. Or in the Netherlands we are at this moment drilling the deepest producing gas well for the Dutch continent self over 5 kilometers.  And for all these challenges that we face, we see opportunities there by applying these new ideas as combination of expertise, new ideas, young professionals, financial strength and we have the economy of scale to do this quickly.

So we have an exciting work place, where you see your ideas transformed into projects in a timeline that you can witness it. I think it is a really attractive workplace. It is not only about E & P, it is also about financial people, every function, every discipline we have in our industry, we want to be the best in it. Whether it is finding gas, producing gas, building platforms, it is financial solutions, it is how we deal with our people, human resources, in every aspect we want to be the best. And we can be the best, because we have the drive to do it, and we offer the opportunities to do it to young people. Next to that E & P is interesting because it place a vital role in energy supply to the world but also in the energy transition. So you will be working together develop ideas about how we can work together with renewable energy sources. We need solutions for that and we benefit on both sides. And for those, you need talented people with a drive to do it.

This article was previously published in the Offshore WIND magazine, issue 3, 2019.