China National Offshore Oil Corp. (CNOOC) is stepping up its energy transition ambitions, launching a hunt for key expertise in offshore wind-based green hydrogen technology and forging closer links with turbine manufacturer Shanghai Electric, Recharge has learned.
CNOOC – which recently grid-connected its first offshore wind turbines – has issued a tender for a partner offering technical know-how in fields including offshore electrolysis, and the storage and transport of hydrogen at sea.
Offshore electrolysis – the production of hydrogen at sea using renewable power – is a particular focus of interest for the emerging global green hydrogen sector, as the ability to make H2 at the point of generation could pave the way for giant ‘offshore hydrogen farms’ pumping the key energy transition fuel to shore or storing it for transportation.
The Chinese government currently has no formal strategy for green hydrogen, but Beijing is expected to soon announce measures to encourage investment in the sector. Several onshore renewable-to-hydrogen plans have already been announced in China, and CNOOC itself has already formed an alliance in hydrogen-powered transportation with European industrial gases group Linde.
Offshore wind ambitions
The hunt for offshore hydrogen know-how coincides with a sharper focus on wind at sea by CNOOC.
CNOOC re-entered the offshore wind sector in 2019 after a brief unsuccessful foray in 2004, taking a 47% stake in a 300MW project off Jiangsu province that earlier in September connected its first turbines to the grid.
The oil group's latest strategic plan pledges to commit 3-5% of its annual future Capex to offshore wind development.
Those ambitions have seen CNOOC forge closer ties with Shanghai Electric, the power sector giant whose wind turbines are among the most widely-used in the Chinese offshore sector.
CNOOC’s renewable energy subsidiary has quietly acquired from Shanghai Electric an 80% controlling stake in the 1GW Zhongpeng 1 offshore wind project, off Shantou city in Guangdong province, Recharge has learned.
Zhongpeng 1 is one of ten unconsented 1GW developments planned by Shanghai Electric off Guangdong, and is unlikely to come online before the end of 2021. That means it would miss out on expiring national subsidies and need to advance as a zero-subsidy project – apparently no deterrent to CNOOC, which paid 20m yuan ($3m) for its stake.
And although there is no formal alliance between the two, Rongfeng and Shanghai Electric are also jointly exploring new project potential elsewhere, including in waters in the Gulf of Tonkin where no offshore wind development has yet taken place, Recharge understands from industry sources.