Electrifying oil & gas with floating wind power 'not for the faint hearted': BVGA

Electrification of offshore oil & gas via floating wind power is “not for the faint-hearted” said a leading sector analyst as two developer teams swept the board in Scotland’s pioneering INTOG lease round.

The developers will now have the chance to hone their plans as they advance through planning and financing towards final 50-year lease agreements.

But they now face a race against time if they are to help the North Sea oil & gas sector hit defined decarbonisation milestones agreed with the UK government, including a target to slash emissions by half by 2030 against a 2018 benchmark.

Alun Roberts, associate director at specialist renewables consultancy BVG Associates, said: “The stand-out conclusion from the INTOG results is that the electrification of oil and gas platforms using floating wind farms is one for the specialist developer.

“They are faced with the challenge of generating as fast as possible – [to] maximise the revenue from oil and gas producers – but using floating technology that is unproven at large scale.

“INTOG projects are therefore not for the faint-hearted and the results show that it is the specialists that have the ambition to overcome the challenges.”

Before the INTOG auction analysts highlighted challenges extending across not just the deployment of the floating plant itself, but into areas such as cabling and management of variability.

The Flotation and Vargronn partnership was bullish over its ability to rapidly make an impact with its two projects – Green Volt and Cenos. It claimed they “could begin generating first power from 2027 and 2028 respectively, making them the most advanced projects for electrification and decarbonisation of oil and gas platforms with floating offshore wind in Europe”.

Both partnerships list heavyweight partners in details of their bids lodged with Crown Estate Scotland.

In Flotation and Vargronn’s case, they include Japanese giant Tepco and Eni, the Italian oil & gas group that is part owner of Vargronn.

Cerulean Winds cites partners including engineering multinational Worley, turbine OEM Siemens Gamesa and Belgian contracting giant DEME.

'Significant investment required'

Fossil fuel-focused industry group Offshore Energies UK (OEUK) listed some of the questions the wind developers – and their would-be power offtakes in the oil & gas sector – will need to resolve as they advance.

As many platforms in the North Sea are in the late stages of their production cycle, overhauling their energy source – traditionally diesel or gas-powered – could represent a significant cost burden, OEUK said.

Retrofitting brownfield operations, that were not designed to be electrified, can be technically difficult, with the OEUK stating that “major capital investment will be required”.

Gas and diesel-powered systems have been relied on for years as they ensure availability and no interruptions. Generators have been designed to withstand the harsh conditions of the location to high standards of reliability,

Solutions to potential unavailability of wind power could come through storage or simply retaining gas-generation capacity, as is the case on Equinor's Hywind Tampen floating wind project in Norway where turbine-generated power is expected to meet 35% of annual power demand from five platforms in the Snorre and Gullfaks offshore fields.

Innovation element

Although the TOG element of INTOG dominated the capacity awarded, the IN – or innovation – element attracted its fair share of big names, including oil supermajor BP which said its 50MW winning bid will be its first floating wind demonstration project, with the potential to link to the Aberdeen Hydrogen Hub it is developing in the Scottish city.

Matthias Bausenwein, BP’s senior vice president for offshore wind, said: “As we look to significantly build our offshore wind footprint around the world, we expect this to increasingly include floating options, and this is one exciting first step.”

Industry body RenewableUK’s executive director of Policy Ana Musat said: “This unique leasing round offers further opportunities to develop the UK’s world-leading floating wind and green hydrogen projects in Scottish waters, enabling the growth of new supply chains by fostering innovation in the manufacturing and installation of vital clean energy technologies”.

“To maximise these opportunities and maintain our global competitive advantage, we’ll need to ensure that we can secure a route to market for these technologies in future CfD auctions in the years ahead, by getting the framework right to unlock billions of pounds of private investment.”