Norwegian government funding is underpinning R&D and investment in hydrogen, energy storage, and offshore wind as part of a coronavirus exit strategy and given the oil market downturn
Norway is injecting Nrk3.6Bn (US$360M) in funding into hydrogen, battery technology, offshore wind and green shipping as part of its coronavirus crisis exit strategy to aid national development of technology. “We must use this opportunity to learn, restructure and lay the foundation for green growth that will reduce emissions,” said Minister of Trade and Industry Iselin Nybø in announcing the economic package.
Enova, the Trondheim-based organisation owned by the Norwegian government that backs clean energy projects, will receive US$200M, another US$100M will be distributed to the Research Council, Innovation Norway and the Industrial Development Corporation of Norway, with the remaining US$60M for other measures.
Minister of Petroleum and Energy Tina Bru called the package a “shot in the arm” for the oil and gas and supply industry.
In part, the funding could help soften the blow to Norway’s maritime and offshore supplier export industries, which were estimated to lose 20,000 jobs as a result of the Covid-19 pandemic and the downturn in the oil market, according to a report produced by Menon Economics for Export Credit Norway.
A wholly owned state company under the Ministry of Trade and Industry, Export Credit Norway offers loans to Norwegian and international companies when they purchase goods and services from Norwegian exporters. These exporters are located in maritime clusters, with vessel designers, equipment manufacturers, shipyards, shipping companies and specialised equipment and service suppliers located in one region.
Prior to the outbreak of the coronavirus, revenues for the Blue Cluster – one of country’s three Global Centres of Expertise (GCEs) – had been recovering from the oil market downturn in 2014. In 2018, total revenues for the cluster increased by 10% compared to 2017, rising to Nrk54.1 Bn (US$5.8Bn), according to Menon Economics. Revenue for the cluster had been projected to reach Nrk64.5Bn (US$6.9Bn), prior to the pandemic, propelled by strong growth from the cruise market. This would have been Nrk4Bn (US$430M) below 2015 and Nrk13Bn (US$1.4Bn) beneath the all-time high in 2014.
Located in northwestern Norway, the GCE Blue Maritime cluster includes numerous world-class offshore vessel designers, including Skipsteknisk, Ulstein Design, Havyard Design and Marin Teknikk, shipping companies Bourbon, Island Offshore, Havila and Olympic and shipbuilders Kleven, Vard and Havyard. The shipyards also source equipment – engines, propulsion systems, winches, dynamic positioning systems – locally from the likes of Kongsberg Maritime and Brunvoll.
Thrusters for shuttle tankers
After securing multiple orders from South Korean shipyards, thruster manufacturer Brunvoll is producing several powerful units for newbuild shuttle tankers in its factory in Molde. In June, Brunvoll received an export order from South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME) to supply thrusters for two newbuild shuttle tankers for Norway-based Knutsen NYK Offshore Tankers (KNOT).
Both 129,000 dwt shuttle tankers will be part of the company’s operations at the Goliath oil field in the Barents Sea.
During loading and unloading operations, the vessels are operated with dynamic positioning (DP). Position keeping is ensured by two tunnel thrusters and three retractable azimuth thrusters totalling 10,500 kW from Brunvoll.
Brunvoll marketing director Per Olav Løkseth said the contract and other recent deliveries to the same segment consolidated the company’s position as “the preferred partner for thruster systems for DP shuttle tankers for leading players with operations in the northern territories and in Brazilian waters.”
This is underpinned by an order placed by South Korean shipbuilder HHI with Brunvoll for three sets of two tunnel thrusters and three retractable azimuth thrusters totalling 13,700 kW for three shuttle tankers for Malaysia’s AET. The three 155,000 dwt shuttle tankers that AET has now ordered will be part of the company’s operations in oil fields outside Brazil.
Green vessels for offshore wind
While the Covid-19 pandemic has roiled the offshore oil and gas market, Salt Ship Design AS managing director Arne Stenersen said his company has avoided temporary layoffs or permanent capacity adjustments. Headquartered south of the Blue cluster, about 85 km from Bergen, the independent ship designer “has been able to fulfill all its customer commitments,” said Mr Stenersen, noting that video conferencing and Microsoft Teams have facilitated internal and external communications with owners, shipyards and vendors. Salt Ship Design has even added staff, recruiting new employees as it had planned prior to Covid-19.
“Obviously, travel constraints for international equipment vendors have affected the commissioning and completion of vessels under construction. Consequently, we expect some of our projects to be somewhat delayed from the shipyard,” said Mr Stenersen.
One maritime sector that has shown resiliency during the global economic downturn has been the offshore wind sector, where Salt Ship has developed a number of purpose-built designs.
In April, Edda Wind signed shipbuilding contracts Astilleros Gondan for two 88.3 m commissioning service operation vessels (CSOVs) and with Astilleros Balenciaga for two 82.4 m service operation vessels (SOVs), all to Salt designs. Edda Wind, the offshore wind segment of Norwegian shipowner Østensjø Group has secured two long-term charters, one with Denmark’s MHI Vestas, a joint venture of MHI and Vestas Wind Systems, for one SOV and another with Germany’s Ocean Breeze Energy GmbH for the CSOV.
Designed with battery-hybrid propulsion, IMO Tier III-certified generators and other energy-saving equipment, the newbuilds will generate significantly less greenhouse gases (GHG) emissions as compared with traditional fossil fuel-burning vessels when they enter service.
Taking it a step further, Østensjø Rederi plans to evolve the SOVs and CSOVs over their service lifetimes into zero-emission vessels by incorporating hydrogen fuel-cell technology.
Financial backing for the future zero-emission transformation comes from Enova. The upgrades to the vessels will cover complete tank systems for hydrogen storage, dedicated machinery space for fuel cells, the battery hybrid system, novel type propulsors and an extensive package of energy saving measures for most auxiliary systems, such as heating ventilation and air conditioning (HVAC) and pumps systems.
“Alternative fuels and zero-emissions technologies are considered in almost all new projects”
“Ambitious owners like Østensjø Rederi are working on developing new technologies based on hydrogen propulsion, and their offshore wind newbuilds designed by Salt are prepared for future installation of this novel technology, which will turn the CSOVs into zero-emission vessels without compromising operational capabilities,” said Mr Stenersen.
Each vessel will be outfitted with all-electric Horizon walk-to-work gangway solutions and Colibri 3D motion-compensated cranes from MacGregor. Both of those products entered into the MacGregor portfolio following its acquisition of the vessel cargo crane, handling equipment and services business of Bergen-based TTS Group in 2019.
"Østensjø Rederi is committed to continuously advancing the development of environmentally sustainable technologies, and MacGregor’s energy efficient equipment will contribute to improving the overall efficiency of Edda Wind’s newbuildings," said Østensjø Rederi chief project officer Egil Arne Skare.
Decarbonisation is on the minds of all charterers, which means that “alternative fuels and zero-emissions technologies are considered in almost all new projects in any vessel segments addressed by Salt,” said Mr Stenersen. The ship designer is seeing strong interest in using LNG, biogas and ammonia in reciprocating engine applications and is closely monitoring the progress on the development of hydrogen as a fuel.
“Senior designers in Salt were pioneers, introducing LNG and fuel cells in offshore service vessel applications,” said Mr Stenersen. “We believe ship designers are great influencers when it comes to proving the feasibility of new technologies combined with appropriate design solutions.” Salt is focused on designing vessels based on a ‘zero-emission mindset’ he said.
Battery-hybrid solutions ‘mandatory’
Mr Stenersen said: “Obviously, hybrid solutions combining batteries and fuel is more or less mandatory – for peak-shaving, more optimal use of gensets, or as a redundant power source.” Norwegian and Nordic suppliers have all been closely involved with the development of battery-hybrid solutions and played a pivotal role in the implementation of the technology in the OSV sector. Among the global leaders in the sector are ABB, Corvus Energy, Kongsberg Maritime, Siemens and Wartsila.
Siemens and Corvus Energy both opened automated battery factories in Norway in 2019. Siemens opened a factory in Trondheim, Norway, to assemble its BlueVault lithium-ion battery modules, while Corvus Energy opened its new 400 MWh facility in Bergen in September to fulfill strong growth in the Norwegian market, resulting from new ferry tenders and high demand for hybrid energy systems in the offshore and shipping sectors.
“There is an electric revolution going on in the maritime sector, and we want to deliver the best solutions in the industry,” said Corvus Energy chief executive Geir Bjørkeli. Mr Bjørkeli said the automated facility would enable the company to increase production capacity and remain price competitive.
Corvus is pushing maritime and offshore battery technology further, securing an order from Japan’s Kawasaki Heavy Industries (KHI) in June for a new high-density lithium-ion capacitor energy storage system (ESS) dubbed Blue Marlin. Corvus Energy incorporated the LiC technology into the maritime-specific Blue Marlin product under a product development agreement with KHI, first announced in September 2019.
Corvus Energy believes Blue Marlin will be able to sustain very high charge/discharge rates of 550 C peak and 200 C continuous, enabling both energy recapture and fast discharge for high-power load handling. It can deliver beyond a million cycles with minimal capacity loss, according to Corvus Energy.
Corvus Energy will market the Blue Marlin ESS mainly in the offshore segment for applications with short power fluctuations at a very high power. In the offshore sector, there is potential for efficiency improvement through energy recapture in heave compensation, drilling draw works, payload lowering, and similar high-power applications. Blue Marlin will be able to handle peaks in the power demand profile. For drilling rigs and vessels with heave-compensation systems, this could mean that one or more diesel generators previously used to handle sudden variations in power can be turned off.
Corvus Energy is a partner in the NCE Maritime CleanTech industry cluster, which assisted with consultancy and project development in the planning phase of the Norwegian battery factory.
“With a battery factory in the Bergen area, the industry will have close access to core products that are vital to ensuring that shipping is more environmentally friendly and more profitable for the ship owners,” said NCE Maritime CleanTech chief executive Hege Økland.
Digitalisation and decarbonisation
With an eye on the decarbonisation of its offshore transport and logistics operations, Norwegian oil and gas independent Aker BP will implement a cloud-based software solution under an agreement with the Oslo-based Norwegian maritime technology company Yxney Maritime.
Called Maress, the solution will enable Aker BP to get detailed insight into the fuel consumption and emissions from the fleet of advanced offshore vessels operating on the Norwegian Shelf. Maress software provides a foundation for making informed and data-driven decisions on how to decarbonise operations.