The North Sea can be an international beacon of industrial transition thanks to its unique evolution over the last 50 years into an “energy basin like no other in the world”, according to a panel of leading sector developers.
The addition of the world’s largest offshore wind clusters – plus emerging technologies like floating wind, carbon capture and storage and hydrogen production – to a global hotbed of hydrocarbon production means the North Sea will be the first to see the technical, commercial and social implications of the shift from fossil to renewables applied at scale, a digital roundtable organised by Recharge with sister title Upstream told an online audience.
“The North Sea is an energy basin like no other in the world… and at the forefront of the energy transition,” Matei Negrescu, head of North Sea area development for Equinor’s New Energy Solutions unit, said.
The Norwegian energy group is applying field-tested technical solutions from its North Sea oil & gas operations to its burgeoning regional renewable energy ambitions, Negrescu explained. That application spans lessons in digitalisation and robotics to help it build the world’s biggest offshore wind farm, the 3.6GW Dogger Bank project off the UK, and the transfer of offshore oil & gas technology to accelerate deployment of floating wind.
Negrescu said the Hywind Tampen floating wind project, which will help to decarbonise the Snorre-Gullfaks oil & gas field in the North Sea, is an emblem of the journey Equinor and the region is on. “We are using technology from oil and gas to contribute to the decarbonisation of oil & gas,” he told the digital roundtable, moderated by Recharge's Editor-in-Chief Darius Snieckus.
Jonathan Cole, head of offshore wind for global energy giant Iberdrola, which is developing some of the North Sea’s largest projects off the UK, including the multi-gigawatt East Anglia cluster, said the potential social benefits of the energy transition shouldn’t be undervalued.
Cole said most developed economies have some coastal communities “that have suffered from a chronic lack of investment, and feel like they’re outside the economic mainstream of the country”.
Where offshore wind is being developed “investments are being made in exactly those same coastal communities that have suffered for decades”, said Cole, citing examples such as Barrow and Hull in the UK, and Bremerhaven in Germany.
The Iberdrola executive also said the Spanish utility giant, a pioneer of the UK offshore wind sector since bringing on its West of Duddon Sands project in 2014, was unruffled by the dramatic growth of interest in the industry by oil & gas supermajors.
“There’s an implication that oil & gas companies are coming to steal our lunch. There’s plenty of lunch to go round,” said Cole, pointing to the vast scale of deployment envisaged in the North Sea – a 2019 study pointed to a 450GW build-out by 2050 to meet European climate targets – and beyond.
“The energy transition simply not happen unless the oil & gas majors are involved… and we’ll work with anyone to make [it] happen.”
The potential to contribute to – and benefit from – the energy transition while remaining focused on hydrocarbons was highlighted by another North Sea player, the independent oil & gas exploration and production group Lundin Energy.
Lundin made headlines early this year when it invested in a Finnish onshore wind farm to help cover power use at its operations at the Johan Sverdrup and Edvard Grieg offshore oil & gas fields off Norway.
Nick Walker, chief operating officer of Lundin Energy, said the company had taken a strategic decision to leverage the energy transition to target a “low carbon and low-cost” business model, replacing net electricity usage on its offshore oil & gas platforms by 2022 with power from shore through investments in renewable generation.
But he underlined the company wouldn’t be transforming into a renewable energy business.
“We look to what we do well, and what we’re really good at is producing oil and gas, said Walker.
“We see renewable energy investments as an enabler.”
While its focus will remain on oil and gas that Walker said will be needed “for decades to come”, he said Lundin recognises that the “energy transition is happening and we have to adapt to it”.
Adding that a targeted energy transition strategy can help keep Lundin “sustainable, relevant and investable”, Walker said: “It’s good business – and it’s the right thing to do”.
· A recording of the full Upstream-Recharge Powering the Energy Transition forum is available here.