Spotlight on energy transition trends and developments

Achieving a more sustainable system will require a diverse energy mix – if we make the right choices. The energy transition has been talked about for many years, but now the pandemic has given the world an opportunity to make it happen more quickly.

During the recently completed 13^th Offshore Energy Exhibition and Conference 2020 (OEEC), we heard a lot of calls for integration, re-use, and information technologies, highlighting the importance of energy transition. After two days packed with interesting sessions, talk shows, interviews, and even more interesting expert speakers, it is safe to say that this first virtual edition of OEEC was a success.

Although the current situation did not allow for the usual face-to-face exhibition and conference, and although we miss a crowded event floor and conference halls – the virtual edition offered some new opportunities we haven’t had before.

During her talk on the vital role of the oil and gas industry in energy transition, Nermina Kulovic, Offshore Energy’s Fossil Energy Editor, highlighted the first steps that the oil majors are taking in their energy transition journeys.

“As we’ve all seen by now, the energy transition has been a major buzzword for years, being thrown around without detailed plans and commitments. However, just like many other things this year, this is now beginning to change,” Nermina Kulovic said.

“Despite growing pressure by governments, environmentalists, and investors, the prevailing opinion is that the oil and gas will remain an integral part of the global energy mix for an extended period of time as the world’s energy demand continues to grow, but will not be met by renewable energy sources for years to come.”

“In the environment following a double-whammy of the oil price crash and Covid-19 pandemic, one must wonder, will this shape up to be the industry’s most defining moment for years to come or will it remain business as usual once these hurdles have been overcome? This, remains to be seen.”

Kulovic concluded that the oil and gas industry will have to show that it CAN be a leading player in the energy transition and renewable businesses and many of the major players are already stepping up their game to show it. It is also clear that getting to net-zero will require efforts from everyone, including governments, companies, investors, and citizens.

At the conference, Adnan Durakovic, Editor at offshoreWIND.biz and Offshore Energy, put the spotlight on the recent developments within the offshore wind which are helping the industry on its journey from niche to mainstream.

“2020 is set to be another record-breaking year in terms of the capacity added. Between 6.6 GW and 8.8 GW of new offshore wind capacity is expected to be installed globally this year, with China accounting for over a half of the new installations. 2020 could also be the year in which China overtakes the UK in the offshore wind capacity rankings,” Adnan Durakovic stated.

“Looking further ahead, there is around 120 GW of projects expected to be operational by 2025 globally. This includes the already commissioned projects.”

“Based on the announced commercial operation dates, the annual installation capacity is expected to grow from over 6.6 GW in 2020 to over 19 GW in 2025.”

According to a recent analysis by Rystad Energy, going big with the wind turbines pays off even given the fact that the larger units will be more expensive to manufacture.

Overall, the analysis shows that using the 14 MW turbines on a 1 GW wind farm offers cost savings of nearly USD 100 million versus installing the currently available 10 MW turbines.

The cost reduction, however, does not come from the 14 MW wind turbines, which actually add to the overall costs compared to the 10 MW units, Durakovic said.

According to Rystad Energy, the largest savings are made on the use of fewer foundations (over USD 100 million on the manufacturing costs alone with the estimated price of one foundation being USD 3 to 4 million), and lower installation costs (including inter-array cables with up to USD 15 million in potential savings) which could lead up over USD 50 million in potential cost reduction.

“As we move forward with energy transition, technology developers are working to become part of that energy mix by unlocking the potential of ocean-based renewables and shift the technology from a research and development stage to a commercial stage. The challenge is to lower the cost, increase production and deployment in order to get scale effects,” said Adis Ajdin, Editor of Offshore-Energy.biz – Subsea/Marine Energy, at the conference.

“When it comes to marine energy, we can safely say that Europe is the sectors’ frontrunner. In tidal stream, for example, the world’s first offshore arrays are in Europe, as is the world’s largest array, and the world’s largest turbine. In wave energy, Europe has the largest number of full-scale wave energy devices.”

“Just last year, we saw the largest ever tidal energy project approved not only by the France (Channel) England Programme but by any Interreg programme.”

“The Tidal Stream Industry Energiser Project, known as TIGER, aims deliver up to 8 MW of new tidal capacity at sites in and around the Channel region.”

According to Adis, the total theoretical tidal energy capacity in the Channel region is estimated at nearly 4 GW, enough to power up to three million homes.

When it comes to tidal stream energy UK and France are the top players in the sector, with Sweden, and The Netherlands also up there with the best of them.

In March this year, UK developer Orbital Marine Power signed up to a second berth at the European Marine Energy Centre (EMEC) paving the way to deliver its first 4MW floating tidal turbine farm.

Orbital, who recently decommissioned its legendary 2MW SR2000 device, which saw some 3,3GWh of electricity generated at EMEC, is in the process of manufacturing its first commercial O2 floating tidal energy device also rated at 2 MW. It incorporates key innovations and lessons from the SR2000 which should boost its yield by a 35 per cent.

The O2 project is backed by private as well as Scottish Government funding through Saltire Tidal Energy Challenge Fund. The O2 project is also supported by FloTEC project and ITEG project.

“At the start of 2020, we saw some wave energy developers exploring commercial applications in the blue economy, powering subsea infrastructure for oil&gas, delivering power for subsea residency of underwater robotic vehicles, powering aquaculture as well as using wave power to boost ship engines and reducing fuel consumption and lowering emission levels,” said Adis.

One of these is Mocean Energy, which teamed up with subsea energy storage experts EC-OG and AUV specialist Modus in a project to look at using renewables for subsea power.

The project will look to use Mocean Energy’s Blue Star wave energy converter and EC-OG’s HALO subsea energy storage system to power subsea tiebacks or residential AUVs.

Blue Star programme is backed by £3.3 million from Wave Energy Scotland.

Also, US-based Ocean Power Technologies, Modus and Saab Seaeye are working on a similar solution to deliver carbon-free power for subsea autonomous underwater vehicle (AUV) residency.

According to recent reports, close to 3GW of ocean energy could be deployed worldwide by 2030, with costs falling to around €90/MWh for tidal stream and €110/MWh for wave energy.

“As head of one of the marine energy test sites once said, we’ve seen a lot of technologies hit the ocean with a goal to harness its energy potential. Some of them work, some of them don’t. For those that do, it is not a question of if but when,” Adis Ajdin concluded.

According to Jasmina Ovcina Mandra, Editor at Offshore Energy – Green Marine, a study by UMAS and the Energy Transitions Commission for the Getting to Zero Coalition spells out that total investment to halve shipping‘s emissions and/or completely decarbonize by 2050 could cost between $1-1.9 trillion; 87% of the investments for land-based infrastructure and production of low carbon fuels and 13% related to the ship (machinery, onboard storage, and improving energy efficiency).

A combination of wind propulsion, operation change + vessel optimization can deliver between 60-70 percent of decarbonization required.

In her presentation, Jasmina Ovcina Mandra pointed out that – when it comes to LNG – 2020 has also seen:

• Conversion of Hapag-Lloyd’s ULCV;

• Delivery of 23,000 TEU CMA CGM Jacques Saade, the largest LNG-powered containership in the world;

• Delivery of Heerema’s semi-submersible crane vessel and the world’s first LNG-powered construction vessel, Sleipnir;

• Japan, Singapore and Rotterdam welcomed their LNG bunkering vessels;

• Kaguya, FueLNG Bellina and Gas Agility.

When speaking about the importance that maritime companies invest in developing green technologies, Jasmina said that offering energy efficient solutions is a way of getting ahead of market competition, because being sustainable is a matter of business survival.

Energy plays a role in the lifecycle of dredging and subsea projects, and decisions made early in the project initiation phase can have huge impacts on later energy consumption, said Eldin Ganic, Editor of Dredging Today and Offshore Energy.

Also, legislation – related to emissions and sustainability – is becoming stricter and stricter.

With the Energy Efficiency Design Index (EEDI), IMO has also adopted mandatory energy-efficiency measures to reduce emissions of greenhouse gases from international shipping.

“Dredging and subsea operations have both positive and negative effects as regards climate change. All maritime activities, including dredging and subsea vessels, emit gases into the atmosphere; these emissions add to the problem of global warming,” said Eldin Ganic.

The aim is to reduce the use of fuels that emit gases which add to the rise in temperatures and thus are detrimental to controlling climate changes. The dredging industry and those who supply ships and engines to the industry have been actively seeking new technologies to meet these IMO standards.

System integration – This represents smart pairing of fossil and renewable energy networks. The presence of (offshore) infrastructure for fossil energy production and transportation may provide opportunities to facilitate the transition to renewable energy sources,

Implementing energy storage and smart grid – Implementing energy storage, using a wide variety of storage options and smart grid in which energy is automatically used at the time of production can temporarily cushion volatilities in energy demand and supply,

Accelerating digitalisation – Digital technologies enable energy systems to connect and to match energy supply and demand more efficiently,

Providing experimentation space – In physical terms, this means offering locations for testing, for instance, innovative foundation methods, e-fuel production and restoring biodiversity.