Outgrowing oil & gas

Although the growth of offshore wind does not cope well with the eu’s green deAl tArgets, europe surely embraced offshore wind in 2019. Global developments indicate that this renewable source of energy has the potential of becoming the world’s leading source of energy.

According to WindEurope 1 , Europe installed 15.4GW of new wind energy in 2019. Three quarters of this (11.8GW) was onshore wind, and new offshore wind was 3.6GW, which can be considered a record. Europe now has 205GW of wind energy. And it accounted for 15% of all electricity consumption in Europe last year. A total of ten new offshore windfarms started production. The UK accounted for nearly half of the new capacity with 1.7GW. Then came Germany (1.1GW), Denmark (374MW), followed by Belgium (370MW). Portugal installed 8MW of floating offshore wind. Europe now has 22GW of offshore wind. The UK and Germany account for 75% of this wind. Denmark, Belgium, and the Netherlands share nearly all the rest.

Double the size The average size of the offshore turbines installed last year was 7.8MW and the growth of the turbines continues, as a 12MW offshore wind turbine was installed on an onshore test location at Maasvlakte 2 in the port of Rotterdam. Offshore windfarms are becoming larger, too. The

1 WindEurope, Offshore Wind in Europe – Key trends and statistics 2019, February 2020.

Europe now has 22GW of offshore wind.

country NO. OF WIND FARMS connected * CUMULATIVE CAPACITY (MW) NO. OF TURBINES connected net cApAcity connected in 2019 (MW) NO. OF TURBINES connected in 2019 UK 40 9,945 2,225 1,760 252 Germany 28 7,445 1,469 1,111 160 Denmark 14 1,703 559 374 45 Belgium 8 1,556 318 370 44 Netherlands 6 1,118 365 0 0 Sweden 5 192 80 0 0 Finland 3 70.7 19 0 0 Ireland 1 25.2 7 0 0 Spain 2 5 2 0 0 Portugal 1 8.4 1 8 1 Norway 1 2.3 1 0 0 France 1 2 1 0 0 Total 110 22,072 5,047 3,623 502

average size doubled from 300MW in 2010 to over 600MW today. The largest offshore windfarm at present is Hornsea 1 in the UK, with a capacity of 1.2GW. Today, most offshore windfarms are constructions on monopile foundations. However, with the launch of the new Portuguese WindFloat Atlantic floating project funded by the EU’s NER300 programme, Europe now has 45MW of floating offshore wind, and more will follow as France, UK, Norway, and Portugal are all developing new floating projects. Offshore wind costs continue to fall significantly. Last year’s auctions in France, the Netherlands, and UK delivered prices for consumers in the range of EUR 40-50/MWh. This is cheaper than building new gas, coal or nuclear power plants. 2019 also saw investment decisions in four new offshore windfarms, representing 1.4GW in capacity and EUR 6 billion in investments.

A long way behind The European Commission says Europe needs between 230 and 450GW of offshore wind by 2050 to decarbonise the energy system and deliver the Green Deal. This requires Europe to build 7GW of new offshore wind a year by 2030, and ramp up to 18GW a year by 2050. The current level of new installations and investments is still a long way behind. WindEurope CEO Giles Dickson says, “Europe really embraced offshore wind in 2019. Auction prices showed it’s now cheaper to build offshore wind than new gas or coal plants. Several governments raised the amount they had hoped to build. This time last year, we were looking at 76GW by 2030. Now it’s 100GW. But we are currently not building enough to deliver on that, let alone the more ambitious volumes needed to deliver the Green Deal. The EU Commission says we need up to 450GW of offshore by 2050. That means 7GW new offshore wind every year by 2030, and 18GW by 2050. We built a record amount last year, but this was only 3GW.

He continuous, “The bigger numbers are doable and affordable. The new EU Offshore >>

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0 22.5 25.0 Cumulave installed capacity (GW)

Germany Norway Finland

Image courtesy of WindEurope.

Denmark France Belgium Spain Netherlands UK Sweden Portugal Ireland Cumulave

Block Island, US first offshore windfarm.

Wind Strategy in the Green Deal should clearly map out how to mobilise the investments needed for 450GW. It should essentially provide a masterplan to develop the offshore and onshore grid connections and to get the maritime spatial planning right. This will require a close cooperation between governments in the North Sea and Baltic. And this should also include the UK, they have been half of Europe’s investment in offshore wind in the last decade and will by far remain the biggest market.”

China strides forward With Europe in the lead as offshore wind region, other continents have also made considerable progress in their offshore renewables plans. The International Energy Agency (IEA) states offshore wind’s technical potential is 36,000TWh per year for installations in water less than 60m deep and within 60km from shore 2 . Global electricity demand is presently 23,000TWh and moving further from shore and into deeper waters, floating turbines could unlock enough potential to meet the world’s total electricity demand eleven times over in 2040. The IEA reports that China has recently taken strides forward on offshore wind and now stands among the market leaders. This rapid growth has been driven by the government’s 13 th Five-Year Plan, which called for 5GW of offshore wind capacity to be completed by 2020, and for the establishment of supply chains to support further expansion thereafter. Offshore wind is set to gain a foothold in new markets in the next five years. The current pipeline includes about 150 new offshore wind projects, spread across nineteen countries. Over 100 projects are scheduled to be completed by 2021, pointing to further acceleration in the rate of annual capacity additions. In the United States, there are 25GW of offshore wind projects in the longer-term pipeline (US DOE, 2019). There are also large-scale projects in Australia, Chinese Taipei, India, Japan, Korea, New Zealand, Turkey, and Vietnam.

Truly exciting Recent research by Rystad Energy 3 shows that installed offshore wind capacity in US waters could reach 20GW by 2030. Such a trajectory means capital expenditure in

2 International Energy Agency, Offshore Wind Outlook 2019, November 2019. 3 www.rystadenergy.com, The US is set to experience yet a new energy revolution: Offshore Wind, January 2020.

shAllow wAter deep wAter

totAl region neAr shore FAR FROM SHORE neAr shore FAR FROM SHORE North America 9,907 13,238 22,819 58,937 104,901 Central and South America 3,847 4,438 6,439 37,144 51,869 Europe 2,629 2,39 14,817 52,009 71,845 Africa 1,123 572 7,699 17,107 26,502 Middle East 478 673 600 1,791 3,543 Eurasia 9,382 17,402 9,943 48,735 85,462 Asia Pacific 8,508 12,451 14,44 41,357 76,757 World 35,875 51,166 76,757 257,081 420,878

Image courtesy of IEA.

US offshore wind will likely exceed those in US offshore oil and gas within the next five years. “There are currently 6GW of offshore wind projects in the US that have been sanctioned for development, requiring collective investments of more than EUR 19 billion over the next five years. Assuming continued support from the regulators, many more projects will be sanctioned in the coming years and we expect to see yearly investments in the sector exceed EUR 14 billion by the middle of the decade”, says Tim Bjerkelund, Head of Consulting New York at Rystad Energy. The US Northeast has for decades been dependent on importing energy, either from other states or other countries. Renewable energy could offer a remedy but wind and solar projects are typically land-intensive, which poses problems in areas of high population density such as the US Northeast. “This is reminiscent of problems faced by European countries, and the states in the Northeast have wisely picked up the same playbook. Benefiting from the technological developments and cost efficiencies introduced in the North Sea, these states are adopting the lessons learned and are rapidly rolling out targets for a much higher share of renewables in their power mix”, adds Mr Bjerkelund. Projects such as Vineyard Wind are expected to see costs close to the levels of European projects. This bodes well for an industry that is still in its infancy. According to the Energy Information Administration, the potential for offshore wind in the US is 7,200TWh. “The emergence of offshore wind as an industry in the US is truly exciting. The energy transition is taking place now, not through small test projects but through utility scale projects that each require billions of dollars in investment.

With Europe in the lead as offshore wind region, other continents also made considerable progress in their offshore renewables plans.

REGION/COUNTRY policy tArget European Union 65-85GW by 2030 China 5GW by 2020 (10GW construction capacity) United States 22GW by 2030 India 5GW by 2022 and 30GW by 2030 Chinese Taipei 5.5GW by 2025 and 10GW by 2030 Korea 12GW by 2030

Image courtesy of IEA.

US Northeast offshore wind capacity additions by awarded project and expected start year.

Image courtesy of Rystad Energy.

Benefiting from the technological developments and cost efficiencies introduced in the North Sea, the US Northeast states are adopting the lessons learned.

US suppliers should take note – this new industry could outgrow offshore oil and gas in only a few years’ time, providing lots of new opportunities”, Mr Bjerkelund concludes.

i. windeurope.org i. rystadenergy.com i. iea.org

The P14-A production platform has now started its third life on the D12-B platform, including technical enhancements to minimise emissions to the environment.

Successful start of cross-border gas production

Best Case For re-Use in the north sea sillimanite Field

Wintershall noordzee (a 50:50 joint venture of Wintershall Dea and Gazprom ep international) has successfully starteD gas production from its operated crossborder development sillimanite.

Discovered in June 2015, the unitised gas field stretches across the UK and the dutch Continental shelves. “the safe delivery and start-up of production of this exceptional cross-border development project is a showcase of how working together on all levels brings about great results”, says robert Frimpong, managing director of Wintershall noordzee. “We are proud of the results achieved by the teams and look forward to the numerous further opportunities the area around sillimanite has to offer.”

Third life for production platform Wherever possible, Wintershall noordzee, active for more than 50 years as a full lifecycle operator in exploration, development, production and decommissioning, seizes the opportunity to re-use parts of its production platforms. it is a sustainable as well as a cost-effective approach. this practice dates back to 1988 when the topside of K13-d was re-used as the topside of l8-h. Wintershall noordzee now has re-used the topside of its decommissioned p14-a production platform for the second time. starting its life in 1993, it was re-used to become the topside of e18-a in 2009. it has now started its third life on the d12-B platform, including technical enhancements to minimise emissions to the environment.

From Europe for Europe the production of gas from the sillimanite gas field is in line with the statement made by the dutch minister of economic affairs on

Photo courtesy of Maersk Drilling.

Wintershall Noordzee contracted the Maersk Resolve drilling rig.

The production of gas from the Sillimanite gas field is in line with the statement made by the Dutch Minister of Economic Affairs on the small fields policy.

the small fields policy. in a letter to the dutch house of representatives dated 31 may 2018, minister eric Wiebes writes, “Gas extraction in our own country, when this is safe, is better than importing. this is partly due to the fact that the netherlands will still need natural gas for some decades to come, although in declining quantity. in that case, own production is better for the climate, better for employment and the economy, better for the preservation of knowledge of the deep subsurface and of the present gas infrastructure, and also better geopolitically.”

Maersk Resolve Wintershall noordzee contracted the maersk resolve drilling rig to work on the development of the sillimanite field which is planned to have a minimum of two production wells. the first of the two production wells, d12-B1, was drilled within the planned timeframe and budget. the produced gas will be transported through the newly laid 12km long pipeline connecting the d12-B platform to the existing d15-a production platform (operated by neptune), both located in dutch waters. From there, the gas will be transported through the nGt (noordgastransport B.V.) gas transportation system to shore.

About Sillimanite the unitised sillimanite gas field stretches across the UK and the dutch continental shelves in licence block 44/19a on the UK side and blocks d12a and d12b on the dutch side. a treaty between the UK and dutch governments entered into force in July 2018. Beside Wintershall noordzee as operator (39.7%), unit-partners in the sillimanite development are energie Beheer nederland (25%), Gazprom international UK (19.9%), neptune energy netherlands (2.3%), neptune netherlands participation (1.6%), neptune e&p UK (3.6%), one-dyas (3.1%) and one-dyas UK (4.8%).

i. www.wintershall-noordzee.nl