Collaboration among all major stakeholders is essential for the offshore oil and gas industry to meet the ambitious goal of net-zero emissions in the UK North Sea by 2035
As the UK’s leading independent oil and gas company in the North Sea, Chrysaor is committed to developing energy in a sustainable manner, consistent with the Paris climate agreement. Chrysaor has joined with other oil companies – BP, CNOOC International, Equinor, Shell, Siemens, Total, Wood Energy, Aker Solutions and Ineos – to support a new Net Zero Solutions Centre at the Oil and Gas Technology Centre in Aberdeen. The goal of the Net Zero Solution Centre is to accelerate the development and deployment of technologies to decarbonise offshore operations and develop the UK continental shelf (UKCS) as the first net zero oil and gas basin globally by 2035. This would put it well ahead of IMO’s goal of reducing greenhouse gas (GHG) emissions from international shipping by 50% by 2050.
The oil industry’s effort underpins government plans to reduce or offset carbon emissions to net zero by 2050 in the UK and 2045 in Scotland. Carbon capture storage and utilisation, hydrogen as a fuel and offshore wind will become increasingly important in the maritime industry’s effort to decarbonise.
In July, the UK Department of Transport unveiled its Clean Maritime Plan, requiring all of the vessels built from 2025 onwards that operate in UK waters to be equipped with zero-emissions technology. This means vessels would need to be equipped with some form of zero-emission propulsion technologies, whether it is fuel cells, battery-hybrid technology or the ability to burn biofuel. By 2025, the Clean Maritime Plan envisions development of ‘clean maritime clusters’ in major ports, focused on innovation and bunkering infrastructure associated with zero-emission propulsion technologies and low-emissions fuel. By 2035, the UK government expects low or zero-emission marine fuel bunkering options to be readily available across the UK.
In 2020, the UK government will establish the Maritime Emissions Regulation Advisory Service (MERAS) to support those adopting zero-emission propulsion technologies, assisting them through the regulatory process.
Being in the forefront of the energy transition could pay huge dividends. In its research for the Clean Maritime Plan, the UK government projects the global market for maritime emission reduction technologies could reach US$15Bn annually by 2050, opening technology export opportunities for the maritime sector. The UK estimates potential national annual economic benefits of US$690M.
A phased approach with medium- and long-term national targets for the shipping sector to cut GHG emissions is being considered by the UK government.
“The government is making all of the right noises,” says Chrysaor E&P marine and aviation technical authority Alex Morton, “but how are they going to support that?”
Mr Morton believes that government support in port and harbour infrastructure is needed to help in the transition to cleaner, alternative energies. “Right now, it doesn’t make sense for an operator to deploy a hydrogen-powered vessel in Aberdeen. There is not the support network in Aberdeen for that type of vessel.”
Similarly, an LNG-powered vessel is impractical as well, he says. “There is not an LNG terminal in Aberdeen.”
Ports and vessel electrification
Mr Morton feels that vessel operators need to apply more pressure on ports to “move the infrastructure in the harbour towards the 21st century.” This means adding shoreside electrification and cold-ironing facilities to allow vessels to plug in when they are in port. Shoreside electrification would allow OSVs to leverage power produced by the UK’s renewable energy sector. Renewables supplied 40% of the UK’s electricity as of Q3 2019. Already the world’s largest offshore wind developer, with approximately 8.4 GW of offshore capacity, the UK expects offshore wind capacity to grow to 30 GW by 2030.
Initially Mr Morton envisages battery packs in 20-ft containers being fitted on vessels to provide clean ship power when the OSVs are in port.
“When I worked at Shell, we employed the first generation of vessels with hybrid power sources,” says Mr Morton. “I think now we need to look beyond that. It is not about fuel saving, but rather CO2 emission reduction.”
With 2025 fast approaching, OSV owners are going to be called upon to make investments in zero-emission technology.
“In the very near future, when we go out for tenders, they will contain clear statements of principle that the preferred vessels will have some form of hybrid propulsion,” Mr Morton says.
Vessel electrification poses its own challenges for investment, operations and shore-side infrastructure and the power grid. “How can we safely operate these vessels and protect our offshore assets and all of the people on board of them?” he emphasises. To do so means adhering to the UK Maritime & Coastguard Agency’s Marine Guidance Note, MGN 550, Electrical Installations, Guidance for Safe Design, Installation and Operation of Lithium-Ion Batteries, UK ship construction rules, class guidance and lessons learned from previous battery-hybrid vessel operations.
“What’s the optimal weight to operate a vessel and what’s the best hybrid system to support that? The more efficient we can make the vessel the better it is for everyone,” he says.
And while alternative fuels will play a significant role in the energy transition for a net-zero emissions future, research commissioned by the UK government estimates that UK ports are still likely to see total electricity demand increase significantly by 2050. Without any further policy intervention, says the Clean Maritime Plan, this research estimates that the total annual electricity demand at UK ports could rise from 20 GWh in 2016 to around 250 GWh by around 2050, largely driven by demand for shore power from container vessels. In contrast, under a scenario in which there are very ambitious assumptions about maritime electrification, this research estimates that annual electrical demand at UK major ports could rise to over 4,000 GWh by around 2050, predominantly driven by demand for electric propulsion, but with demand for shore-side power also expected to increase significantly.
This research explains that a significant increase in electricity demand in ports would require them to invest in charging infrastructure and potentially to apply for increased capacity from the electricity network. The scale of connection required to a port will be influenced by the forecasted peak load (maximum energy demand within a certain timeframe that needs to be accommodated). The research estimates that the potential peak load could range from around 9 MW for a small port to around 79 MW for a large port.
Still, against a background of climate change and the world’s increasing energy needs, Mr Morton is clearly passionate about the need and urgency of transforming the oil and gas business into a more sustainable enterprise. “There is a commercial upside and a carbon upside. How do we help this business moving towards a smaller carbon footprint? This is an opportunity we must take. We must work with our OSV providers. We must work with ports and harbours.”
Mr Morton is one of four panellists from leading oil companies who will discuss how the upstream oil and gas industry has changed since the downturn in 2014, energy transition, and the role of offshore support vessel operators at the Annual Offshore Support Journal Conference, Awards and Exhibition, which will take place 5-6 February 2020 in London. Click here for more details on the programme and for registration information.