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Offshore wind and gas – the start of a beautiful friendship?

IN DEPTH | Integration of the offshore gas and wind industries is inevitable, with the resulting synergies benefiting both sectors — and the planet — according to Dutch energy experts. Leigh Collins reports

Offshore wind farms will one day produce “green hydrogen” that will be pumped to shore using existing gas pipelines, while floating gas-fired power plants send electricity to the onshore grid using transmission lines built for offshore wind.

Such system integration is “unavoidable” in the future, according to a recent industry report — part of a collaboration between the Dutch wind and gas sectors.

“Given the... limited space available in the Dutch sector of the North Sea... synergies between different uses must be found and optimised,” says an initial “working paper” report on the North Sea Energy Innovation Project, led by non-profit research organisation TNO in conjunction with Shell, Siemens and Dutch state-owned natural-gas company EBN.

“Overall operational efficiency, economics and environmental performance could be significantly improved by (partly) sharing infrastructure, offshore services, human capital, products and knowledge... For these reasons, system integration in the offshore energy domain is unavoidable.”

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The synergies being discussed by the gas and offshore wind industries can be divided into four camps: the electrification of gas platforms; power to gas; gas to wire; and construction and O&M.

Electrification of gas platforms

The best option for synergies in the short term — according to both TNO and the Dutch Wind Energy Association, NWEA — is the electrification of offshore gas platforms. Currently, most platforms generate the electricity they need for power-hungry gas compression and processing from on-site gas or diesel generators. The numbers involved are not insignificant — individual generators tend to have capacities of 10-50MW, and the ten biggest platforms in Dutch waters are due to emit one million tonnes of CO 2 annually over the next ten years, according to the TNO-led report.

“For the oil & gas operator, the emissions go down, plus the operational and maintenance cost of electrically driven systems are much lower than gas-driven systems, so that’s a benefit on costs as well,” says Rene Peters, director of gas technology at TNO, who is playing a leading role in the North Sea Energy Innovation Project. He also points out that many of the gas and diesel generators in Dutch waters need expensive modifications to meet national emissions standards coming into force on 1 January 2019.

‘No need for Dogger Bank cable’

The UK’s giant up-to-4.8GW Dogger Bank wind complex is the furthest from shore of any offshore project in the world — between 125 and 290km off the coast of northern England. TNO’s Rene Peters says that the developers — SSE, RWE, Statoil and Statkraft — could potentially save a fortune by converting the energy into hydrogen and utilising a nearby gas pipeline to the Netherlands.

“The pipeline would be capable of transporting maybe 10-20GW of power in the form of hydrogen. You would not need to invest in an electric cable that might cost tens of billions for the electricity from this Dogger Bank area. Compressors which are currently on these [nearby] platforms to compress gas could also be applied for compressing hydrogen [after some technical modifications].”

So platform electrification is clearly of benefit to the gas industry. But what’s in it for the fast-growing Dutch offshore wind sector — which is expected to add 700MW of offshore wind every year until 2023, and then about 1GW annually from 2023-30?

“Now we have an offshore grid that’s only used for production of wind energy, but when you also use that grid for different purposes, like for the gas platforms, you can split the cost,” says NWEA offshore specialist Hilbert Klok.

“We want to make offshore wind cheaper, not only for the wind farms but also for the offshore grid, which is owned by [national grid operator] TenneT,” he adds. “Delivering sustainable energy to gas platforms would also give the wind sector a bigger market — another big stable user [of offshore wind] that you can make some agreements with, and that’s always good.”

However, Klok is not convinced about the merits of supplying offshore wind energy to gas platforms.

“We’re not quite sure what the benefits for wind energy are,” he says. “We see some positive things and we want to investigate it further.”

So would the gas industry require turbines built especially to supply platforms, or would it take energy from already-constructed or future wind projects?

“The most attractive scenario is that the power will be from existing or planned wind parks,” says Peters. “There are also cases being looked at where wind turbines are specifically targeted to supply energy to the platform.”

Klok points out that gas platforms powered by offshore wind would also have to be connected to the onshore grid. “In those times when there is not enough wind, you will need to transport electricity from the coast to those platforms.”

Peters argues that it would make financial sense to connect platforms to transmission lines being built to link offshore wind farms to the grid.

It would also be technically feasible for platforms to be off-grid, receiving back-up power from on-platform battery storage or existing gas-generator facilities.

Power to gas

When gas platforms are no longer commercially viable, they need to be decommissioned. The safe plugging of the well and the removal and disposal of rigs and pipelines can cost tens of millions of dollars, so the industry is looking for ways to prolong the life of its platforms, or avoid full decommissioning altogether. Recent studies have also shown that decommissioning costs have proved to be more expensive than operators envisaged.

Aside from electrification, other methods have been proposed to extend a project’s useful lifetime, including carbon capture and storage and offshore battery solutions, which would balance the variable output from offshore wind farms.

But the industry’s preferred option seems to be power to gas — or to be more specific, the conversion of offshore wind energy into “green hydrogen” (see panel).

The idea is relatively straightforward. Banks of industrial electrolysers on semi-decommissioned platforms will split water molecules into oxygen and hydrogen using an electric current, and the H 2 is then be pumped to shore using existing gas pipelines.

The case for hydrogen

Currently, hydrogen is mainly produced for industrial processes, such as the manufacture of ammonia and fertilisers. But the gas can also be directly injected into the gas grid (a blend of up to 5% hydrogen in the gas network is deemed to be safe, with little impact on gas utilisation) and potentially be used as the energy source in converted gas- and coal-fired power plants.

About 97% of hydrogen produced today is derived from natural gas, with CO 2 as a by-product, which is known as “grey hydrogen”. But “green hydrogen” produced via renewables-powered water electrolysis is a carbon-free energy source — albeit far more expensive to produce.

When hydrogen is burned the only by-product is water vapour, which is why many tout it as an important green fuel for the future. And the fact that it can be stored indefinitely makes it a perfect energy-storage source for balancing renewables-reliant electricity grids.

Indeed, the hydrogen industry believes that green H 2 is the only environmentally friendly way of backing up Europe’s grid during regular seasonal periods of “dark calm”, when little solar energy and wind power is produced.

But of greater interest to the fossil-fuel industry is hydrogen-powered transport. If hydrogen cars, vans and trucks take off, the oil & gas sector could simply swap petrol and diesel at service stations for hydrogen pumps, and thus maintain its strangehold over the transport sector.

At the World Economic Forum in Davos, Switzerland, in January, gas companies including Shell, Total and Engie formed a “hydrogen council” together with car makers Toyota, Honda, BMW, Hyundai and Daimler. Together, the 13 companies, including industrial giant Alstom, announced plans to invest a combined €10bn ($10.5m) in hydrogen-related products within five years.

It may not even be necessary to send offshore wind energy to shore at all, Peters contends. It could simply be transported in the form of hydrogen molecules via existing gas pipelines and converted back into electricity onshore by fuel cells — removing the need for expensive subsea transmission cables.

But the main benefits for the offshore wind sector would be in the not-too-distant future, says Peters.

Operators of Dutch offshore wind farms are guaranteed an agreed income for 15 years — namely, the per-MWh price at which they won their tender. For instance, the Shell-led consortium that won the 680MW tender in December for the Borssele 3 & 4 projects, will receive €54.50 for every MWh produced.

Projects sell their output on the wholesale electricity market, but if the price is below the agreed strike rate — the Dutch government will top up the difference through its SDE+ subsidy.

However, when those 15 years are over, the output will have to be sold on the open market without any top-up. And when an offshore project is producing high amounts of energy, it is likely that the remaining 10GW or so of Dutch offshore wind expected to be installed by 2030 will also be doing so — leading to market oversupply and low prices.

“After that [15-year] period, there’s a concern [by wind operators]: can we actually build a combination with energy storage offshore so we can also deliver when the price is good?” says Peters.

He adds that a cost-efficient green hydrogen solution is unlikely until after 2030 — before the 15-year subsidy periods will be coming to an end. By that time, he says, the output from offshore wind farms will be so great that a costly expansion of the onshore grid would be needed —unless gas pipelines are used instead.

The NWEA is also not convinced of the need for offshore hydrogen production.

“We have to do more research to see if that’s really of benefit to the wind sector,” says Klok. “Is it really possible to do power-to-gas on an old gas platform? I could also imagine that if you do power to gas onshore, then you can have bigger [electrolyser] plants.”

Hydrogen is only one of many possible storage options, he adds, pointing out that the current round-trip efficiency of power-to-gas-to-power is quite low. “So maybe in the end it’s still cheaper to transport it by electricity lines to shore and store it in another way — or just [accept to] sell it at a lower price.

“We don’t say ‘no’, but we also don’t say ‘yes’. We’ll see if it’s possible in the future.”

Gas to wire

Instead of sending gas to shore via pipelines, it could instead be burned at offshore gas-fired power plants, with the electricity produced sent to shore via subsea wires — preferably along the same transmission lines connecting offshore wind farms to shore.

“The [offshore] electricity grid [for offshore wind] in general is not fully occupied or used because wind energy is not always producing at its peak power level,” says Peters. “That means the grid is usually utilised at an average of 40-50% from most of the wind parks.

“This enables stranded [ie, uneconomic to exploit] gas fields to be developed. [The problem] for some stranded fields is that there is no gas infrastructure nearby to export the gas to shore, and installing a pipeline would be too expensive. But these fields could become economic if there is an electric grid connection nearby, for example, at a nearby wind park.

“Then the gas can be produced in the form of electricity and then sent to shore that way, without the need for a gas pipeline. That is an option we are looking at for some fields, but also in the UK there’s an interest in this integration option.”

It may also be possible — and commercially viable — for such a stranded-field gas plant to act as back-up for offshore wind, so that baseload “offshore energy” is sent to shore.

Decisions on power to gas and gas to wire are unlikely to be taken any time soon, particularly as feasibility studies still need to be carried out.

“It’s only possible with new wind projects, so we have the [already] planned projects until 2019 [to be completed by 2023], but we think the wind farms that are built after that can perhaps connect with oil & gas platforms,” says Klok.

Peters points out that it would be more economic if the offshore gas power plant is mobile. “The idea is not to install a new platform on these stranded fields, but to have floating systems or jack-ups which can float to a stranded field, produce the gas for a number of years, then move to the next stranded field.”

Construction and O&M

Further synergies could be achieved in construction, and operations and maintenance, although what form these might take is less clear.

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“In the Netherlands, companies like Shell are starting to invest in offshore wind,” says Peters. “And then the supply industry is very much involved — so that means components suppliers like Siemens, and the maritime offshore service industry — those who install platforms or wind parks, the big marine contractors. They see growing concerns in oil & gas and a big opportunity in offshore wind.

Klok adds: “There’s a lot of technologies that are being invented and still being improved by gas companies that can also be used to implement wind parks at sea. So to seek co-operation is a clear benefit for offshore wind park developers.

“Also, you have the logistics of the ships to the farms and to the gas platforms. With one ship you can transport the technicians of the wind farms and also the gas platforms, and mutually save maintenance costs.”

Conclusion

The Dutch gas industry is under no illusion about its future.

“We expect that around 2040-45, all our gas fields will be depleted and all our gas production will be stopped,” says Peters.

“Slowly, oil & gas will make space available because the infrastructure will be removed or partly reused and then offshore wind can take that space. And then the idea is that some of the old oil & gas infrastructure and pipelines can be used.”

Klok points out that wind farms planned for after 2023 are likely to be built in areas where there are existing gas activities.

“We’re going to meet each other on the North Sea so I think it’s good that we speak to each other and see what both of our industries’ plans are. We have to investigate together to see what are the best initiatives to create synergies.”