Energy Focus Autumn 2019 by Energy Industries Council

energyfocus

ISSUE 37 AUTUMN 2019

F RO M T H E E N E RGY I N D U S T R I E S C O U N C I L VIEW FROM THE TOP ADNOC Group CEO Dr Al Jaber on driving transformation

HYDROGEN The key to the UKâ&#x20AC;&#x2122;s zero-carbon energy system?

DIGITAL DISRUPTION Unlocking the full potential value of data downstream

FINAL FRONTIER How close are we to the reality of space-based solar power?

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Contents ISSUE 37 AUTUMN 2019

FROM THE EIC

OIL AND GAS

5 Foreword

From the Chief Executive

6 View from the top HE Dr Sultan Ahmed Al Jaber, Group CEO of ADNOC

10 News and events Updates from the EIC

16 Special report: Embracing the fuel of the future Jeremy Bowden on hydrogen

20 How can the UK step up to the 2050 net-zero challenge?

Nicholas Newman on the road to net-zero

50 My business

Steve Coates, Brainnwave

26 Converting challenges into opportunities with digital Clark Sackschewsky, Natural Resources National Leader, and Jeffrey Pratt, Supply Chain Leader, BDO US

29 Driving digitalisation downstream

Stephen Marcos Jones, Director-General, UK Petroleum Industry Association

37 Power to the people Energy Focus looks at blockchain technology

HE Dr Sultan Ahmed Al Jaber

39 A new era for energy storage Dr Javier Cavada, President and CEO, Highview Power

Industry 4.0: reshaping the supply chain

NUCLEAR 43 Using nuclear in a new way

33 Legislation and measurement drive emissions reduction

James Holt, GM, and Colin Lightbody, Technology Manager, Proserv Measurement

POWER

Energy Focus talks to Xavier Mamo, Director of R&D, EDF Energy

45 Data: the new fuel for nuclear

Long-duration energy storage

Will Newsom, Digital Engineering Manager, Assystem

34 ADIPEC 2019

Bringing a global industry together

RENEWABLES

Space solar power hots up

46 The future of carbon pricing in the UK

Hydrogen from nuclear

Joshua Burke, Policy Fellow, and Rebecca Byrnes, Policy Analyst, Grantham Research Institute

48 Space: The final frontier

Space-based solar power Q&A with Dr Paul Jaffe

The Energy Industries Council 89 Albert Embankment, London SE1 7TP Tel +44 (0)20 7091 8600 Email info@the-eic.com Chief executive: Stuart Broadley Should you wish to send your views, please email: info@redactive.co.uk

Editors Sairah Fawcitt +44(0)20 7880 6200 sairah.fawcitt@redactive.co.uk Lucy Chakaodza +44(0)20 7091 8638 lucy.chakaodza@the-eic.com Account director Will Hurrell Production director Jane Easterman Senior designer Seija Tikkis Picture editor Akin Falope Content sub-editor Kate Bennett

Energy Focus is the official magazine of the Energy Industries Council (EIC). Views expressed by contributors or advertisers are not necessarily those of the EIC or the editorial team. The EIC will accept no responsibility for any loss occasioned to any person acting or refraining from action as a result of the material included in this publication.

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Foreword Stuart Broadley CEO

From the Chief Executive: In this issue of Energy Focus we outline several ways the energy sector is embracing disruption in the Middle East and beyond

We are living through the transformative and sometimes disruptive period of Industry 4.0. Owners, operators and EPC contractors are quickly moving from theory to practice, becoming increasingly digitalised. EIC analysis confirms that more than 30% of UK supply chain companies are also now investing in and delivering proven digital solutions to clients, recognising that the world is becoming digital. If they want to work with changing customer demands, they have to offer digital products and services, which can help drive down costs and enhance safety and efficiency. As the digital transformation of the oil and gas industry continues to be fast-tracked, energy companies are ramping up investment in technologies, supporting faster and leaner exploration and production – as well as optimisation of costs. At a time when the Middle East, and most notably the GCC region, is undergoing an energy transition revolution and adapting to a rapidly changing landscape, our View From the Top interview with ADNOC Group CEO Dr Sultan Ahmed Al Jaber (page 6) provides an informative outlook on how the company

is embracing disruption to meet Industry 4.0, as it seeks to expand its strategic partnership and investment base across its entire value chain. With several recent high value contract awards, the Middle East continues to be a key area of focus for our members, and we seek to maintain the UK supply chain’s position as a trusted and proven partner. Aramco plans to invest US$500bn during the next 10 years in the global energy market, including investments in renewable energy, which presents an unparalleled opportunity for the UK supply chain to win significant work on global projects with one of the largest national operators in the world. Countries across the region have defined ambitious sustainability goals. The UAE Energy Plan 2050 aims to cut CO2 emissions by 70%, increase clean energy use by 50% and reduce energy consumption by 40% compared to the business-as-usual scenario by 2050. Saudi Arabia wants to derive 30% of its electricity from non-fossil fuel sources by 2030 while cutting electricity consumption by 8% by 2021. Kuwait, as another example, wants to cut energy consumption by 30% by 2030. The UAE is targeting an energy mix with 44% of

power coming from renewables, 38% from natural gas, 12% from coal and 6% from nuclear energy. Today, in the UAE and across the region, oil and natural gas provide nearly all primary energy supply. The Energy Industries Council (EIC) is looking forward to showcasing the best of the UK’s supply chain capabilities at ADIPEC 2019. Last year we broke our record for the largest UK pavilion we’ve ever hosted anywhere, at a staggering 1,056 square metres. Following on from that success, this year EIC is delighted to be hosting an extended UK pavilion and a specialised area showcasing the best of the UK’s digital innovation, in addition to the national pavilions for Scotland and Wales.

Stuart Broadley EIC CEO stuart.broadley@the-eic.com

www.the-eic.com | energyfocus

From the EIC Q&A HE Dr Al Jaber

View from the top

Q&A: HE Dr Sultan Ahmed Al Jaber Group CEO of ADNOC 6 energyfocus | www.the-eic.com

By thinking creatively, deploying new technology and reframing our business model we will commercially unlock greater value from all our resources

Q&A HE Dr Al Jaber: From the EIC

HE Dr Sultan Ahmed Al Jaber, Group CEO of ADNOC, talks to Energy Focus about embracing disruption as ADNOC repositions itself to responsibly and reliably meet the world’s energy demands, today and tomorrow What were the drivers behind ADNOC’s transformation programme? For nearly 50 years ADNOC has been the spinal cord running through the UAE’s economy, a critical driver of the development of the country and a key enabler of its economic diversification. I began my career at ADNOC, and after re-joining as CEO in February 2016, it was clear the energy landscape was evolving faster than ever before. As such, we could no longer continue business as usual and expect the same results. In short, we undertook a comprehensive review of our operations with the aim of becoming a commercially-driven and performance-led organisation. By maximising the value of every molecule we produce, we are delivering greater yields from our upstream operations, investing to become self-sufficient in, and eventually a net exporter of gas and significantly expanding our downstream business to take advantage of the long-term rising demand for refined and petrochemical products. What challenges have you encountered and what successes have you achieved to date? With the global energy industry changing rapidly, we needed to think differently, be more creative and move beyond our comfort zone, and make ADNOC a model not simply for a modern national oil company, but for how a modern energy company should operate. Realising that we cannot control the price of oil, we are focused on what we can control: our costs. Looking across our businesses, we have left, and continue to leave, no stone unturned. This is not a one-time exercise, but a process of continual self-assessment and improvement. In a powerful validation of our business model, Fitch has given ADNOC the highest rating currently assigned to any oil and gas company globally, citing its ‘high output, significant reserves and strong profitability’. Where does ADNOC stand today in meeting its 2030 smart growth strategy goals? Our 2030 smart growth strategy is successfully driving business and revenue growth. We are on track to grow crude production capacity to 4m barrels by 2020 and 5m by 2030 while unlocking vast, previously untapped reserves of natural gas. We have also embarked on a significant expansion of our downstream business,

investing in Ruwais to create one of the largest fully integrated refining, petrochemicals and derivatives complexes in the world. Looking ahead, we will continue to optimise our capital allocation, maximise our capital efficiency, improve the portfolio returns of our asset base and reinforce our balance sheet while making targeted strategic investments. Can you talk about ADNOC’s long-term downstream strategy? We are enhancing our best-in-class assets in Ruwais with a US$45bn investment. We have already attracted significant foreign direct investment into a new state-of-the-art refinery in a US$5.8bn deal with OMV and Eni. The new refinery will be the centrepiece of a plug and play manufacturing hub connecting to a derivatives and conversion park. We are leveraging Abu Dhabi’s advantages as a logistical hub at the pivot point between mature, high growth and new markets to actively engage with partners across the global value chain that share our creative vision and are prepared to put skin in the game through capital, technology and market access. The UAE wants to be gas self-sufficient by 2030. How will you achieve this? By thinking creatively, deploying new technology and reframing our business model we will commercially unlock greater value from Abu Dhabi’s vast gas resources. We are leveraging our industry-leading sour gas experience to develop the Ghasha ultra-sour gas concession, which is expected to produce 1.5bn cubic feet of gas per day around the middle of the next decade. ADNOC also plans to tap gas from its gas caps and unconventional gas reserves as well as new natural gas accumulations, which will continue to be appraised and developed as the company pursues its exploration activities. As well as enabling the UAE to achieve gas self-sufficiency and potentially become a net gas exporter, the strategy will sustain LNG production until 2040 and allow us to take advantage of incremental LNG and gas-to-chemicals growth opportunities.

About HE Dr Sultan Al Jaber Dr Sultan Al Jaber is a Minister of State in the UAE Cabinet and CEO of the ADNOC Group. As Minister of State, he is responsible for handling strategic portfolios. Before entering government, he developed a specialised expertise in energy and infrastructure, beginning his early career at ADNOC. He established Masdar and served seven years as its CEO. In 2016, while retaining the chairmanship of Masdar, he returned to ADNOC as its CEO. Dr Al Jaber holds a PhD in business and economics from the UK, as well as BSc in chemical and petroleum engineering and an MBA from the US.

How is ADNOC expanding its strategic partnerships and investment base across its entire value chain? We have attracted new concession partners from India and www.the-eic.com | energyfocus

From the EIC : Q&A HE Dr Al Jaber

We are ready to forge the strategic, value-add commercial partnerships necessary to address the growing global demand for energy

During the next two decades we will need all forms of energy, from oil and gas to renewables to nuclear, to meet the rising demand for energy with fewer emissions

China; opened up to new categories from the financial sector and broadened our investor base; entered the global capital markets for the first time, issuing a US$3bn asset-backed bond; carried out the IPO of ADNOC Distribution; concluded the largest infrastructure investment in the Middle East, unlocking US$5bn in value; created the world’s largest exporter of nitrogen fertiliser and secured a 10% stake in the global storage and terminal operator VTTI. These transactions, with more in the pipeline, bear testament to our ambition to develop opportunities that provide an attractive risk-return profile to high-quality long-term investors, while allowing ADNOC to benefit from cost-effective liquidity to finance higher return activities, technology and knowledge transfer and greater market access. Can you talk about the partnership between ADNOC Drilling and EIC member company Baker Hughes? The creation of a fully integrated drilling business with Baker Hughes is an important building block in our 2030 smart growth strategy. Our combined capabilities and expertise are creating greater drilling efficiencies and faster well competition times, generating attractive returns and driving the transfer of know-how and technology. At the same time, our strategic equity partnership is generating predictable, long-term revenue streams and growth for both companies. How essential is oil and gas to the global energy mix, and how can the industry stay ahead of tomorrow’s energy demand? The world will continue to rely on oil and gas as the majority source of energy for decades to come. Meeting the world’s future energy needs responsibly and economically, however, requires a renewed spirit of partnership, with new sets of investors that value long-term sustainable returns; energy companies where best practices are shared, technology is leveraged and capital efficiency maximised; and consuming and producing nations that recognise the shift in demand from West to East. The UAE is perfectly positioned to cater for the new frontiers of market growth, and at ADNOC we are ready to forge the strategic, value-add commercial partnerships, with governments, industry leaders and innovators that are necessary to address the growing global demand for energy. What impact will the transition to cleaner energy have on ADNOC? During the next two decades we will need all forms of energy, from oil and gas to renewables to nuclear, to meet the rising demand for energy with fewer emissions. This principle has guided the UAE’s approach to energy exploration and will continue to be ADNOC’s priority as we expand our oil and gas operations. Already we produce the least carbon-intensive barrels in the world. But we must do

8 energyfocus | www.the-eic.com

more, and we will. In addition to further minimising our carbon intensity, flaring and methane emissions, we plan to increase our carbon capture and storage programme six-fold, from 0.8m to 5m tonnes per year. We believe that, taken to scale, carbon capture technologies will make a significant contribution to emission reduction and add value to the energy mix by freeing up much-needed clean gas for other uses, such as power generation. Can you tell us more about ADNOC’s digital transformation? The world’s demand for energy and higher value products is increasing at an unprecedented rate. Our goal is not simply to keep up, but to stay ahead of the curve to meet this demand. This is a mission we at ADNOC are calling ‘Oil and Gas 4.0’. In practical terms this means fostering a dynamic, performance-led, commercially-minded corporate culture that applies the latest technology and optimises our resources, including, most critically, our human resources. We are incorporating the latest in artificial intelligence, data analytics, blockchain and machine learning into our Panorama digital command centre in order to empower our people to make better, quicker, market-driven decisions. How critical is your in-country value programme in driving national growth? Our In-Country Value (ICV) programme reinforces ADNOC’s strong commitment to the UAE economy. In 2018, ADNOC’s ICV spend was US$18bn, creating additional skilled employment opportunities for UAE nationals and further maximising the use of local products, manufacturing and assembly facilities, services and infrastructure. With ICV now included as part of all tender evaluations and award processes, I am confident it will further strengthen our partnerships with all our suppliers and drive even more opportunities for businesses to benefit and grow alongside us. It is a win-win situation for the nation, the economy, our suppliers and for ADNOC. What are the key opportunities for UK suppliers when working in the Middle East? In this new energy era, we are keen to work with fast-acting partners that can deliver access to high-growth economies; forward-looking partners that can apply the latest technology to our upstream, midstream and downstream operations, and financially savvy partners, including private equity and institutional investors, that can deploy long-term capital for attractive, sustainable returns. For those UK businesses willing to invest alongside us and across our entire value chain, the UAE, as a globally connected energy hub, provides a stable, progressive and opportunity-rich business environment that will become even more rewarding in the years ahead.

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news&events introduce members to regional energy markets and their major players.

Worldwide business support

Established in 1943, the EIC is the leading trade association for companies working in the global energy industries. Our member companies, who supply goods and services across the oil and gas, power, nuclear and renewables sectors, have the experience and expertise that operators and contractors require. As a not-for-profit organisation with offices in key international locations, the EICâ&#x20AC;&#x2122;s role is to help members maximise commercial opportunities worldwide. We do this in a variety of ways: 10 energyfocus | www.the-eic.com

Market insight

Helping members to track global energy projects and assets Our projects database, EICDataStream, provides extensive information on more than 8,750 active and future projects in all energy sectors. By tracking full project lifecycles from feasibility to construction and then completion, it helps members to identify opportunities and plan their business development strategies. Our operations and maintenance database, EICAssetMap, puts the details of more than 4,000 energy facilities across The Americas, Asia Pacific, Europe and the Middle East at your fingertips.

High-profile international events Connecting members with buyers and partners The EIC hosts flagship industry events that bring together supply chain companies with global energy contractors and operators, and bespoke events that keep members informed about projects, sector developments and markets. Our overseas trade delegations and EIC-run pavilions at international exhibitions

Member companies who want to do business outside the UK can rely on our global network of offices to provide regional market knowledge, one-to-one advice and practical support. We also provide virtual and rental offices, and facilities for hotdesking, meetings, conferences and corporate events.

Business intelligence Keeping members informed and raising their profile

We help our members to stay connected with the world of energy through informative online news, e-bulletins, market reports and industry publications. Our comprehensive directory of member supplier services is also a useful resource for operators and contractors.

Industry courses

Enhancing membersâ&#x20AC;&#x2122; skills and knowledge Our quality courses, which can be delivered off-site or in-house, are led by highly experienced trainers with industry backgrounds. We tailor our training to suit a variety of levels and also work with member companies to run programmes, some of which include tours to manufacturing companies.

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About the EIC

Enabling members to expand into markets across the globe

From the EIC News and events

EIC Country Report: Survive and Thrive Volume III Saudi Arabia EIC reports bring you up to date with the latest project and contracting activity across the entire energy spectrum, as well as providing guidance on how to do business around the world. The EIC Country Report: Saudi Arabia, released recently, provides an in-depth PEST analysis of the country. It also gives insights on its current and future energy mix, identifies major developers and contractors operating in the country, and includes a comprehensive guide on doing business in Saudi Arabia. As the country undergoes an ambitious political, economic and social transformation, more than US$80bn of investment is required to install 60GW of solar and 23GW of wind capacity by 2030. Saudi Arabiaâ&#x20AC;&#x2122;s Vision 2030 programme aims to reduce the countryâ&#x20AC;&#x2122;s dependence on oil, and includes the recent National Renewable Energy Programme for the development of a highly ambitious renewables strategy. EIC COUNTRY REPORT SAUDI ARABIA

SECTOR ANALYSIS

MAJOR PLAYERS

PEST ANALYSIS

HOW TO DO BUSINESS

To buy or download your copy of the Saudi Arabia country report please visit: www.the-eic.com/Publications/ MarketIntelligenceReports

Survive and Thrive 2019 (Volume III) charts the course that 25 EIC UK member companies have taken to grow against a backdrop of a cautious oil and gas market recovery with very tight margins, competition that remains fierce, Brexit uncertainty, and a growing emphasis and activism around decarbonisation. The participating organisations have a wide range of strategies, scale, capabilities, products and services and provide a representative cross sample of the UK energy supply chain, with success stories coming from multinational Tier 1 contractors through to family-run SMEs, covering all energy sectors. We revisit the same eight growth strategies identified in the 2018 Report (Volume II) to identify whether their use has risen or fallen, as well as putting the spotlight on three areas of vital importance to the UK industry: Brexit, export and scale-up.

Saudi Arabia is a high growth market that offers significant opportunities for UK companies across its energy sectors

To download your copy of the report please visit: www.the-eic.com/ Publications/MarketIntelligenceReports

NEOWRTS REPOUT NOW

www.the-eic.com | energyfocus

EVENTS COMING UP

Overseas delegation and Wind Energy Expo & Conference Japan 2020

Overseas delegation to Ghana

When: 3–5 February 2020 Why attend? Ghana currently has proven reserves of 700 MMbbl of oil and a production rate of more than 200,000 bbl/d. Production is expected to increase in the near future, following deepwater discoveries coming online such as Aker Energy’s Deepwater Tano Cape oil block. There are significant opportunities for the UK oil and gas supply chain, as Ghana’s oil and gas industry could see over US$18bn estimated CAPEX for projects starting during the next four years, which includes the midstream and downstream sectors. Delegates will have the opportunity to participate in 10–14 pre-arranged group meetings with decision-makers from key EPC contractors and operators and gain a better understanding of the country’s local content laws, current projects and much more. Further networking opportunities will be available at an evening reception held at the British High Commission Accra. Our delegations are an excellent introduction to new markets in a supportive environment, with the logistics and agenda all taken care of for you. For the full itinerary please visit: www.the-eic.com/Events/ OverseasDelegations/Ghana

12 energyfocus | www.the-eic.com

of the key markets for offshore and onshore wind developments in the Asia-Pacific region, with a projected 10GW of operational capacity by 2030. EIC, in partnership with the Department for International Trade, is proud to be organising the trade delegation and UK Pavilion at Wind Energy Expo & Conference Japan 2020, the country’s largest wind energy trade show. The trade mission will commence on 25 February with a seminar on Japan’s emerging offshore wind power market. UK companies will have the opportunity to speak in front of local senior offshore wind leaders, and it will be followed by a networking reception at the British Embassy. Wind Energy Expo & Conference Japan 2020 takes place from 26–28 February 2020. If

Overseas delegation to Trinidad, Tobago and Guyana When: 9–14 March 2020 Why attend? Trinidad and Tobago is the largest producer of oil and natural gas in the Caribbean. In the early 1990s, the country’s hydrocarbons industry shifted from oildominated production to a market centred primarily on natural gas. In 2017, Trinidad and Tobago’s proven gas reserves were estimated at 300bn cubic metres (Bcm) and the country produced around 33.8 Bcm of gas. Several new projects that came online or were sanctioned in 2017 and 2018 are expected to raise overall gas production.

you are looking to get a foothold in this international market, exhibiting on the UK Pavilion is an excellent way to showcase your products and services. You will also benefit from enhanced exposure to government officials, high-level branding and an enhanced stand design in a prime location, as well as the support of experienced dedicated EIC staff. Companies will have the opportunity to meet and network with leading developers, turbine manufacturers, power generation companies and local authorities. The event is aimed at companies looking to develop new business opportunities, gain technical insights and consultations, and build and strengthen early business relationships. For more information, and to register your interest, visit: www.the-eic.com/Events/Exhibitions/ WindEnergyExpoConferenceJapan

In light of this, EIC is excited to be organising an oil and gas trade delegation to Trinidad, Tobago and Guyana in March 2020. During the delegation, you will have the opportunity to participate in pre-arranged group meetings with key EPC contractors and operators, meet senior industry decisionmakers and potential local partners, and learn about procurement processes and local content laws. To register your interest, please visit: www.the-eic.com/Events/ OverseasDelegations/ TrinidadTobagoGuyana

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When: 25–28 February 2020 Where: Tokyo Why attend? Japan is set to become one

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From the EIC EIC National Awards

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Supply chain excellence recognised by EIC

IC held its 2019 National Awards Dinner on 3 October, with Pipeline Induction Heat (PIH), winning the prestigious EIC Company of the Year Award, in addition to the Diversification Award. After a reboot of the company’s business model, the Burnley-based pipeline construction services provider successfully implemented a plan to grow exports and diversify its client base and service offering. In a reduced market size, the company retained its number one market position while protecting its core workforce. Seven other awards based on the eight growth strategies featured in the third edition of EIC’s Survive & Thrive insight report – a study on how businesses have remained competitive and grown in the current challenging economic climate – were also handed out during the black-tie event, attended by just under 300 guests. The gala evening included after dinner entertainment from TV personality and comedian Dara Ó Briain, best known for his work on Mock the Week and The Apprentice. The Innovation award was taken home by Hughes Safety Showers, which landed the prize for its innovative cooling technology for emergency safety shower. The Digital Award, a category launched at last year’s

the prize, Brian won full tuition fees, worth £17,000, for the MBA programme delivered by Aberdeen Business School at Robert Gordon University. Commenting at the ceremony, Brian said: ‘I am extremely proud to have won this award, being selected from a field of truly excellent nominees. To be recognised by such an eminent organisation as EIC – and by RGU, which was involved in the judging – is a real honour. Earning the opportunity to undertake the MBA is fantastic and sets me up really well both for my future career with px and my ambitions to become a leader in the industry in the years to come.’ Brian has enjoyed great success since joining px just three years ago, securing three promotions to his current position of Engineering Manager. During his time in technical roles, Brian has used innovative engineering solutions to improve efficiency, safety and the operational performance of the plant. He now heads up a team of around 25 engineers and, from next year, will manage a multi-million-pound budget. He has a passion for developing his team and has supported one employee into a graduate apprenticeship scheme. Nominations for next year’s Rising Star Award will be open to all EIC member companies in early 2020. Applicants can be based both in the UK or internationally.

EIC annual awards showcase the very best in innovation event, was awarded to integrated engineering services company Booth Welsh, which has boosted market differentiation by offering digital-ready products. It also landed the Optimisation Award. Proserv’s successful strategy of boosting growth through service localisation in the Middle East saw the global firm scoop the Export Award, while Balmoral Offshore Engineering landed the Service and Solutions and Collaboration Awards. The judging panel was impressed by its collaboration and early engagement strategy. The Technology Award was collected by Stavanger-based Yokogawa TechInvent, which invented a game-changing solution to chemical injection control. In addition to the company prizes, Brian Geddes, Engineering Manager at infrastructure solutions business px, was presented with the EIC/RGU (Robert Gordon University) Rising Star MBA Award. The initiative is designed to support the development of the future leaders of the oil and gas sector, and recognises the potential and talent of young UK engineers. As part of

www.the-eic.com | energyfocus

Special report Hydrogen

Embracing the

fuel of the

The potential of hydrogen is clear, itâ&#x20AC;&#x2122;s the least disruptive means to decarbonise the global economy, but the route to realising this potential is uncertain, writes Jeremy Bowden

IMAGE: CLIMEWORKS

future

Hydrogen: Special report

(Below) Carbon capture technology, used in conjunction with hydrogen production, is set to play a crucial role in the UK’s transition to a net-zero carbon economy

he energy industry continues to face disruption on several fronts. Technology is marching on from Industry 4.0 (digitalisation and a focus on the interconnectedness of machines and systems for optimal performance) to Industry 5.0 – which takes such efficiency and productivity further by enhancing the interaction between humans and machines. Introducing this new paradigm to the energy energy sector will take time and money, but should enable more to be done with less in both conventional and lower-carbon sectors.

Harnessing disruption for growth At the same time, the transition to lowercarbon energy is proving the biggest disruptor, and presents major challenges for the industry. It increasingly influences the decision-making of many senior energy executives, as well as those investing in the sector. Given its long-term inevitability, many established energy companies are reducing company emissions and seeking out the longer-term transition route that will involve the least disruption and the fewest stranded assets – while offering the most lucrative opportunities. Most experts in the industry are now agreed, backed up by technocrats at the EU and many politicians, that the optimum route involves extending renewables and adopting dual gas/power systems, in combination with hydrogen, carbon capture and storage (CCS) and electric vehicles (EVs). This route also happens to be the least-cost option and therefore the most likely to succeed, according to many observers. It involves the use of a variety of existing assets that are currently part of the hydrocarbon economy – including the gas grid and storage facilities, modified oil tankers, depleted oil and gas fields, and even some natural gas itself, possibly well beyond 2050.

Zero-carbon lynchpin Chris De Beers of Mott MacDonald sees hydrogen as the lynchpin of this zero-carbon system, alongside renewables – with the hydrogen initially produced through reforming methane and used both to back up wind in calm periods and fed into the existing gas grid and storage at concentrations of up to 20% (after which networks and appliances

may need to be adapted in places to accommodate higher concentrations). The approach maximises use of existing assets and involves the least disruption to both the sector and energy customers while avoiding green energy waste, which often results during periods of high wind (when power prices turn negative and turbines are sometimes paid to switch off). Graham Cooley, CEO of electrolysis manufacturer ITM Power, said: ‘The gas grid is a huge tank, so it represents a huge opportunity to store excess renewable power. If you add in existing gas storage facilities, then very large volumes of renewable energy can be stored over long periods.’

Enabling the transition The accommodation of hydrogen production and mass renewables on the power grid (which will also expand to accommodate EVs) needs to take full advantage of the Industry 5.0 swing towards the use of artificial intelligence (AI) and even collaborative robots (‘cobots’) that augment human capabilities to make people more innovative and productive. This improved interaction between people and machines may be the only way to optimise and balance what will be a very complex energy (power, gas and liquids) system, with intermittency issues, heating demands, vehicle charging, hydrogen production and combined cycle gas turbine back-up. Several specialist consultancies are already being established, including Kaiserwetter, which uses predictive analytics, machine learning and AI, among other things, to ‘catalyse investments into renewable energy,’ according to media officer Gabrielle Dupuy d’Angeac. In the

CCS and hydrogen technology, developed in regional clusters, is essential if Britain is to achieve a ‘net-zero’ carbon economy by 2050 www.the-eic.com | energyfocus

Special report: Hydrogen

hydrocarbons sector, the UK is setting up a new Net Zero Solution Centre, which aims to accelerate the development and deployment of technologies to decarbonise offshore operations and position the UK North Sea as the first net-zero oil and gas basin globally, supporting the industry’s Roadmap 2035.

Incentives to switch The carbon price is already providing an incentive for industrial customers to switch to lower-carbon fuels, and this is in turn providing an incentive to switch from hydrogen produced through methane reforming (brown hydrogen) to that produced from electrolysis using green power, according to Mr Cooley. ‘Carbon prices are why industrial users of hydrogen – including Shell, BP, RWE, Innogy, Engie – are all announcing 100MW projects. Why are they doing this? They can obviously see it is commercial. RWE and Innogy announcing 100MW in the Netherlands, BP 250MW… companies are looking at the economics and it adds up for them.’ He says hydrogen does not need subsidies in the same way that biogas does: ‘In the case of hydrogen, the point of incentives is to get

the market to the point where the volume increases rapidly, costs come down and then it’s a virtuous circle – it won’t need longterm subsidies, whereas biogas will always need subsidies. It was done with solar, onshore and offshore wind, where prices have come down massively, but it has not yet been done with hydrogen. So, there have been no incentives in place to get the market growing to industrial scale.’

A smart combination However, if CCS is used in combination with methane reformation, then brown hydrogen can also be produced without emissions, and that is the plan at Hynet – Europe’s biggest planned hydrogen project. Based in northwest England and led by grid operator Cadent, it involves supplying two million residential gas grid customers, as well as local industry, with natural gas that includes a 20% hydrogen mix. The hydrogen will be produced from methane, with waste CO2 and carbon monoxide captured and stored in a depleted offshore gas field in the eastern Irish Sea. The UK’s Committee on Climate Change says that this type of CCS and hydrogen

technology, developed in regional clusters, is essential if Britain is to achieve a ‘net-zero’ carbon economy by 2050. Cadent CEO Andy Lewis says that both the Hynet project and its twin in the northeast (which the company also leads) have strong support from a variety of major industrial users and from local government. He adds that there was support from other gas grid operators in the UK too – not least those in South Wales, which see depleted fields in the East Irish sea as the nearest option to store Welsh industrial CO2 emissions. Utilities and power generators are also expected to be key UK investors in hydrogen. In Yorkshire, for example, Drax, Equinor and National Grid Ventures are exploring strategic opportunities to develop a large-scale hydrogen demonstrator within the Drax site in North Yorkshire by the mid-2020s. They also plan to scale-up the bioenergy carbon capture and storage pilot project at Drax Power station, which currently captures a tonne of CO2 per day, to create the world’s first ‘carbon negative’ power station. Any hydrogen is likely to be from methane reforming plus CCS. The European Commission is also pushing hydrogen and a dual-energy system model, which links the development of gas and power grids as both can carry green energy, which it says will be essential for the low-carbon system to work effectively. ‘The UK needs to do some joined-up thinking: we have an electricity grid that needs energy storage to decarbonise it, and if you store that using hydrogen molecules, you can also decarbonise the gas grid and many industrial processes,’ said Mr Cooley.

Both the scale of renewables and hydrogen production will have to grow rapidly to meet the goal of a zero-carbon world by 2050, while technology in the form of Industry 5.0 also needs to be fully adopted – which should make it easier to reach other goals. However, barriers remain – not least how a coordinated approach can be applied to what is now a decentralised and privately held sector. Nevertheless, those with a national role are all set: speaking at a recent conference, National Grid’s Innovation Manager Stuart Gregg said: ‘When the industry button on hydrogen is pressed, we want to be ready to go!’

18 energyfocus | www.the-eic.com

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Feature UK net-zero 2050

How can the UK step up to the

2050 net-zero challenge? Government policies will have to ramp up significantly for a net-zero emissions target to be credible, writes Nicholas Newman

20 energyfocus | www.the-eic.com

UK net-zero 2050: Feature

ast June, the UK committed itself to the legally binding target of net-zero emissions by 2050. The UK has a good track record, having already reduced emissions by 42% while growing the economy by 72%. And under its Industrial Strategy, ‘green collar jobs’ could reach two million while exports from the low-carbon economy could grow to a hefty £170bn a year by 2030. The net-zero carbon target will impose major changes in almost every aspect of British life, affecting our homes, food and the way we get around, as well as jobs and businesses. Reaching the target could cost about 1–2% of gross domestic product annually, according to a report from the Committee on Climate Change. The implications for future taxes on all aspects of demand and supply remain uncertain.

Policymaking The UK already has an existing 2050 target to reduce emissions by 80%, which was agreed by parliament under the Climate Change Act in 2008. The government’s plans to replace this target with the much tougher net-zero goal means implementing policies that will ensure zero emissions from homes, transport, farming and industry where possible, and where it cannot be fully achieved, offsetting any emissions produced by planting trees or sucking CO2 out of the atmosphere.

Advancing to cleaner energy

The UK’s energy sector

The prospects of a total phase-out of fossil fuels remains unlikely, as the world economy will still use oil and gas as a feedstock for making a range of industrial chemical, plastics, medicines and fertilisers. Instead, the main effort will be on achieving operational emission reductions, utilising renewable energy, developing low-carbon transportation fuels, commercialising carbon capture and storage (CCS) and developing technologies for using hydrogen in power generation and in transportation. Several options are open to both policy and decision-makers in achieving the net-zero challenge. On the supply side, the business environment must be changed to encourage traditional fossil producers to become full-spectrum energy companies, as they have the key technological, innovative, fiscal and project management know-how to deliver the mega green projects of the future. As for the demand side, policymakers need to create the business climate regulatory incentives for a greener energy future.

Phasing out coal use and bringing more renewable energy on stream are the key planks of the government’s strategy. Coal has been displaced by natural gas, wind and solar power, while National Grid has invested in network modernisation, including inter-connectors that link the UK with neighbouring countries’ electricity supplies. Just as the UK’s coal age is ending, we seem to be at the start of a new nuclear power age, possibly making use of small nuclear reactors rather than the megaprojects currently favoured. As for gas power generation, its role is changing to that of peak power supplier, able to provide back-up power for renewables when needed. In addition, we are seeing the growing use of grid-scale energy storage to manage fluctuations in demand and supply of power.

Changing behaviours

IMAGE: IKON

Policymakers need to create the business climate regulatory incentives for a greener energy future

to reduce their impacts on the climate, including improvements in fuel efficiency and the introduction of greener fuels. As for the energy sector, the industry must increase its support for delivering more carbon-friendly fuel solutions for transport and industrial processes.

To have any prospect of meeting the new target, consumer behaviour will need to change – perhaps flying fewer miles, increasing carbon taxes and increasing the use of high-speed trains. The shipping and aviation sectors, meanwhile, are taking several approaches

To have any prospect of meeting the new target, consumer behaviour will need to change

Big oil gets greener Fossil fuel companies are already making the move towards a low-carbon economy. Ørsted and Equinor have changed their names to reflect their changing business models, France’s Total has invested in a major battery manufacturer Saft Groupe SA, while BP has returned to solar power, some six years after exiting the sector. Led by Shell, BP and Chevron, big oil companies are aligning their businesses and reward systems with the Paris Agreement www.the-eic.com | energyfocus

Feature: UK net-zero 2050

New era in power

Ultimately, a mixture of fiscal and technological carrots and sticks will be needed to ensure the UK meets its net-zero targets while also addressing environmentally damaging operations such as methane leaks and harmful gas flaring, and encouraging energy storage as well as hydrogen and CCS technologies. In fact, Total’s CEO Patrick Pouyanne notes that ‘there is a need to bolster investment in new technologies like CCS, with the potential for the North Sea to become the “giant cave for CO2 in Europe” by using depleted gas fields.’ Likewise, Equinor is endeavouring to reduce the carbon footprint of its offshore oil rigs by directly connecting them to nearby shore-based power grids, and where this is not possible, by replacing rigs’ turbines with innovative floating wind turbines. Shell, BP and Total have tentatively begun to produce renewable energy. For example, Shell bought First Energy, which not only produces its own renewable energy but also supplies electric car charging points for electric cars and home users across the UK. Ben van Beurden, chief executive of Royal Dutch Shell, states that: ‘The latest investments are part of the company’s wider emission reduction strategy.’ While these steps are to be welcomed, big oil is only at the early stages of its move into greener energy. As they are used to developing large-scale projects, the relatively small size and speed of renewable projects is unfamiliar to oil and gas companies. However, when the financial returns of sustainable energy match or even exceed those of oil and gas, these large companies will undoubtedly increase the scale of their investment.

22 energyfocus | www.the-eic.com

The closure of the UK’s last seven coal power stations by 2025 marks the end of an era and the beginning of reliance on sustainable energy, paralleled by grid-scale and domestic batteries to keep grid stability. Fintan Slye, head of the National Grid Electricity System Operator (ESO), says: ‘More renewable power generation and less coal is a trend that is here to stay, and this carbon intensity milestone shows the pace of change in the UK energy industry.’ National Grid ESO has set out a pathway towards operating the electricity system entirely on renewables by 2025, and the big six utility companies, including E.ON and SSE, are on board. Since 2010, in partnership with gas utility SSE, National Grid has invested more than £3.8bn in renewables, culminating in the recent completion of the 588MW Beatrice offshore wind farm (SSE share: 40%) last May. This raised SSE’s sustainable energy capacity to 4GW. SSE’s investment of more than £2.7bn in new electricity transmission infrastructure since 2013 is playing a key role in supporting the UK’s drive to reduce emissions. Likewise, E.ON has already invested £2.5bn in renewable energy plants. Gas central heating in residential property

accounts for nearly 15% of the UK’s greenhouse emissions. To meet zero emissions, gas-fired central heating and hot water will need to be replaced by electric boilers or district heating schemes. Alternatively, natural gas could be replaced with hydrogen or green gas produced from a network of anaerobic digesters using waste from agriculture, industry and sewage.

How do we get there? The UK stands at the forefront of the global low-carbon transition, but the government needs to back up its ambitions for reducing carbon emissions by putting policies in place. Ultimately, a mixture of fiscal and technological carrots and sticks will be needed to ensure the UK meets its net-zero targets. On the demand side, this would mean an end to all new airport expansions and major funding in building energy efficiency. On the supply side, this would involve serious investment in a new fleet of mini nuclear power plants, together with major government backing for energy and resource efficiency, electrification, hydrogen and CCS technologies, including the transformation of redundant oil and gas fields into carbon sinks.

Using known technologies, the UK can end its contribution to global warming by reducing emissions to net-zero by 2050 Emissions today

Aviation and shipping

Transport

Land use and agriculture

F-gases and waste

Buildings

Industry

Power

Any remaining emissions in 2050 must be offset

Remaining emissions

Greenhouse gas removal

This transition will require a concerted effort and action by all SOURCE: COMMITTEE ON CLIMATE CHANGE. NET ZERO – THE UK’S CONTRIBUTION TO STOPPING GLOBAL WARMING, MAY 2019

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A world’s first in fouling removal First look at Tube Tech International’s Shell Side Jet™ Funded by the Horizon 2020 programme, via the SME Instrument, under grant agreement 805767, Tube Tech International has developed its patented Shell Side Jet™ solution, which is the first-ever guaranteed technology to remove fouling between the tubes on the shell side of shell and tube heat exchangers. Developed as a result of a lack of technology on the market that can clean in between tube rows of the shell side of a heat exchanger, Shell Side Jet is the first of its kind in the industry. So, what’s wrong with current methods? Traditional technology used to remove fouling from tube rows of the shell side of a heat exchanger are time-consuming to set up and dismantle and are very labour intensive, often requiring a whole team of technicians to conduct the cleaning. Traditional methods also require extensive equipment which must be manually adjusted to bent and broken tubes and do not provide the client with feedback reports. As well as this, the equipment is unable to penetrate between tube rows, resulting in only 5–30% of the surface area being cleaned. There are also significant safety issues involved as technicians are ‘bundle facing’ when carrying out the cleaning process. The Shell Side Jet™ solution: mobilisation Typically, Tube Tech International will deploy a team of highly trained technicians anywhere in the world within 72 hours. The Shell Side Jet system is deployed within two hours upon arrival and there is no need to use bundle rollers which are large, heavy and costly to transport. The system is controlled by two people and is smart enough to complete the cleaning on its own. The clean Shell Side Jet is the only system that penetrates between six-millimetre tube rows, offering a more precise and efficient clean. It is the only system available that guarantees to achieve 90% clean as standard. This precision enables a dramatic reduction of water usage compared to traditional shell side bundle blasters (from approximately one hundred gallons per minute, down to as little as two gallons per minute), meaning far less waste is created. Smart technology Tube Tech’s innovative lance technology moves with the shape of the tube and the system detects blockages, broken tubes and incorrectly positioned baffles, so

obstructions can be identified and dealt with without causing further damage. Feedback reports Detailed digital reports are provided to the client after the clean. Results can be determined by the client weighing the bundle before and after cleaning to ascertain the level of fouling removed. Other information provided in the report includes the distance of baffle plates, location of damaged or broken tubes, volume of fouling, photos of before, during and after the clean, and an intuitive heat map. Derek Sumsion, Research and Development Manager at Tube Tech International, said: ‘Tube Tech International aims to deliver globally patented, next-generation, highlevel cleaning robots to dramatically extend run times and improve safety and fuel efficiency to substantially reduce CO2 emissions within the industry. Shell Side Jet is a product of this commitment and has been made possible with the backing of the Horizon 2020 funding project.’ Tube Tech was founded in 1988 by current CEO Mike Watson, with a mission to answer heavy industries’ challenges with innovative solutions. With offices in the UK, the US and a recently opened site in Malaysia, Tube Tech is able to offer its unique fouling removal solutions to clients anywhere in the world. Find out more about Shell Side Jet: https://www.tubetech.com/shell-side-jet/ www.the-eic.com | energyfocus

Oil and Gas Industry 4.0

eopolitical tensions, energy transition, years of low oil prices and the rise of new global players have created instability, anxiety and uncertainty in the oil and gas market, disrupting companies’ business plans and, in some cases, threatening their long-term survival. While oil prices have seen a shortterm boost following the drone attacks on Saudi Arabia’s production facilities, volatility is here to stay. In the US, fluctuating prices coupled with high debt burdens and investors’ reluctance to provide new capital has led to a wave of oil and gas bankruptcies. The current climate requires a forwardthinking strategy to navigate current turbulence and adapt for long-term success. Facing multiple pressures and increased competition, oil and gas companies need to lean into new technologies to lower costs and improve efficiencies if they are to survive and thrive. These technologies – the catalyst of the ‘Fourth Industrial Revolution’, or Industry 4.0 – are transforming every link in the oil and gas supply chain, from extraction to the end consumer.

What is Industry 4.0? Born out of a confluence of technology disruptions – including Big Data, analytics, the Internet of Things, extended reality, artificial intelligence, unmanned aerial vehicles and blockchain – Industry 4.0 ultimately hinges on the ability to integrate data with physical processes. Many companies have already begun adopting new and emerging technologies, streamlining processes, increasing capital productivity and improving decision-making across the supply chain.

Technologies are transforming every link in the oil and gas supply chain, from extraction to the end consumer 26 energyfocus | www.the-eic.com

This digital transformation is not likely to slow soon. In BDO’s 2023: The Near Future of Oil & Gas, we predict that the digital oilfield market, consisting of the Internet of Things, analytics and cloud computing, will surpass US$20bn by 2023.

How Industry 4.0 catalysed the US shale boom During the oil downturn of 2014, US companies were hard-pressed to find methods and areas that had low production costs. But thanks to advancements in horizontal drilling efficiencies, producers have been able to dramatically increase the speed and scope of production, making the Permian – and the US overall – one of the most profitable areas for shale production. The US Energy Information Administration forecasts that US shale production will average 12.2m barrels per day (bbl/d) in 2019, and 13.2m bbl/d in 2020. Horizontal drilling is by no means a new technique, and is not an example of digitalisation in the oilfield. Rather, it is enhanced data collection and analysis – driven by edge computing, more flexible data storage and sophisticated analytics – that is leading to greater precision before drilling even begins. Oil and gas companies’ ability to replicate and sustain early successful digitalisation initiatives will be key for cutting costs and maximising output – an

Converting challenges into opportunities with

digital

Industry 4.0: Oil and Gas

US$20bn The digital oilfield market will surpass US$20bn by 2023

important goal in a volatile environment. While US shale producers showcase Industry 4.0’s potential, they are not the only energy players who are adopting new technologies and transforming their operations.

Supply chain innovation and safety 1 Maintenance Boasting a true eagle’s-eye view, drones are eclipsing traditional inspection methods and facilitating early detection of oil and gas leaks in difficult-to-access locations such as offshore drilling sites. In the midstream sector, drones equipped with thermal imaging systems can help identify points of vulnerability across the world’s million miles of pipelines. connectivity 2 Increased Increased data integration and information-sharing up and downstream

could allow companies to adjust production levels in real-time, based on inventory data from storage facilities, rate of distribution and forecasted demand. Exploration Exploration and production (E&P) companies moving into the next generation of seismic imaging are experimenting with 4D models that integrate production data to map changes in reserves’ oil and gas levels. These advances aim to more precisely pinpoint the quantity of resources and the lifespan of each well.

Production E&P companies can leverage data from sensors to determine which drilling methods combine the right mixture of sand, water and chemicals to maximise a well’s output. Drillers can also be automated to increase production and reduce costs.

Storage Improvements in data management allow for remote tracking of inventory levels and monitoring systems to automate temperature control.

Transportation Equipping railcars and tracks with smart sensors and thermal detectors can provide real-time geolocation data and

monitor key safety features to minimise the risk of derailments. Refining Real-time geolocation data can alert refineries to delays on incoming crude oil feedstock. Smart sensors enhance monitoring the safety and functionality of all processes. Augmented reality applications can improve training efficacy and plant performance.

Distribution Predictive analytics help companies to forecast demand with greater accuracy, seamlessly communicate data with suppliers and automate production levels.

The next shale giant We expect that Saudi Arabia will grow its capabilities and investments in unconventional oil and gas production abilities, and it could go on to become a global player in shale and LNG by 2023, competing with the US and Russia. Saudi Arabia will need to match its investments in production capabilities with Industry 4.0 technologies to catch up with existing global players if it wants to compete in the global market. We also expect that Saudi Arabia will purchase assets in the US, China, Russia and Australia to diversify its portfolio, which could hasten its rise to global LNG competitiveness – especially since many of those countries are already using Industry 4.0 technologies throughout their operations.

IMAGE: ISTOCK

What’s next?

Digital disruption is reshaping the supply chain but only companies that adopt and adapt Industry 4.0 will stay competitive and relevant, say Clark Sackschewsky and Jeffrey Pratt at BDO US

The way that oil and gas companies integrate their data, communicate and work together will continue to evolve with the adoption of new and emerging technologies. These new efficiencies will be vital to the success of the global oil and gas industry amid increased competition, volatile oil prices and market turbulence. Companies that can lower their input costs and increase efficiencies through Industry 4.0 tools and technologies will be best positioned to navigate these forces and compete in an ever-changing environment. By Clark Sackschewsky, Natural Resources National Leader, and Jeffrey Pratt, Supply Chain Leader, BDO US www.the-eic.com | energyfocus

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Oil and Gas Downstream

Driving digitalisation downstream The growth of digitalisation is already transforming the UK’s downstream oil sector, but its full potential has yet to be unlocked, writes Stephen Marcos Jones at the UK Petroleum Industry Association

n recent years we have seen an increase in the pace at which digitalisation has made an impact on people’s day-to-day lives, alongside a period of lower-than-expected demand for petroleum products. That lower demand, along with pressure on margins in the downstream sector, has led to a strong incentive for digital solutions that might drive down costs, maintain health and safety or increase efficiencies.

Accelerating digitalisation

Elsewhere in the downstream sector, unmanned filling station forecourts have long been a staple across Europe, albeit less so in the UK. Higher quality digital imaging and remote monitoring are options that could be used more widely. However, it is the consumer experience that has changed the most, with fuel retailers reacting to consumer demand for remote payments – using apps and removing the need to go into the forecourt shop – as well as using warning devices that remind users to put the right fuel in their cars to avoid costly mistakes.

The future of downstream Looking ahead, new digital applications look set to transform how the downstream oil sector operates. The Shell Haven terminal again offers an example of the potential opportunities. Plans to use submersible robots to enter tanks while they are still in service are being assessed;

IMAGE: GETTY

The downstream oil and gas sector in the UK has made some interesting inroads into digitalisation: in a low-margin environment the incentive to save costs, be more energy efficient, and maximise a plant’s yield to better compete against newer, more flexible units makes digital technologies particularly attractive. At refineries, terminals and filling stations, new technologies are increasingly

being rolled out in order to optimise efficiencies and manage high-risk activities for plant operators. Examples of this include the Shell Haven aviation fuel import terminal on the Thames Estuary, where use of drones for marine jetty inspections have reduced the time taken to complete inspections by 80% and removed 100% of activities involving working at height and working over water. The terminal also uses robots for both internal and external tank cleaning. Electromagnetic robots climb the outside of tanks to strip away old paint, reducing this high-risk task for humans, with activities involving working from height reduced by 95%. Inside tanks, high-risk confined space activities have been reduced by 85%, with plans for the next generation of robots to perform both cleaning and inspection activities, thus completing 100% of confined space activities.

www.the-eic.com | energyfocus

Oil and Gas: Downstream

Looking ahead, new digital applications look set to transform how the downstream oil sector operates as are wireless networks to communicate large volumes of data without the planning issues or expense involved in running cabling over a site, meaning many of the usual concerns around capital investment can be avoided.

Removing the risks There are, of course, limitations and challenges to any new technological developments. Wireless signals shared across downstream sites, unlike those carried inside insulated cable, do not stop sharing data beyond the fence-line and may not always have precise digital clarity. Thought needs to be put into the need for 100% signal reliability, and at sites of national critical importance, consideration needs to be given to who else might have an interest in receiving or even disrupting information where dangerous atmospheres and explosive materials are present. The knowledge of threats in the sector is developing and will need to keep up with the wider deployment of new technologies.

Unlocking value with data The application of big data could help companies to get better at predicting the impact of bad weather, temperature or even the compatibility of new crude

30 energyfocus | www.the-eic.com

blends, with some consultants developing ways to create digital replicas of plants so that testing of new crudes for a site can be modelled without the need to expose operational units to the unforeseen, which could result in failures. For many, being able to predict failures may be the most attractive application of digital technologies. If digital monitoring is able to more reliably or earlier identify issues with units, trucks and pipelines – whether at the refinery or on the forecourt, where reliable logistics play an important role in managing stocks – then the avoided downtime could help companies run even more efficiently. Small, unobtrusive monitors are increasingly readily available,

Staying ahead of the curve In a sector as focused on safety, energy efficiency, as well as dynamic optimisation of everything from feedstock to product, the potential that digital offers to the downstream oil industry is considerable and is already being felt – albeit piecemeal – across the supply chain. As the sector adapts to meet demand for new, more sustainable feedstocks and looks towards disruptive new technologies that can help meet zero-carbon ambitions, companies will need to consider when to embrace fully these opportunities, while managing the changing risks. By Stephen Marcos Jones, DirectorGeneral, UK Petroleum Industry Association

IMAGE: ISTOCK

this would improve optimisation, with cleaning and inspection taking place while the tank is online. Refineries may also adopt ‘connected workers’ technologies, such as using an accurate global positioning system to track where employees are on a large site and applying real-time information in order to better connect maintenance workers with control room personnel, thus fixing problems more quickly.

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Oil and Gas Emissions

ddressing global warming is unquestionably front-page news right now. Regular reports and studies are rolled out, advising us of the potential long-term environmental impacts of greenhouse gas emissions at present levels. The oil and gas industry naturally has a responsibility to address this topical issue, and steps are undoubtedly being taken by some jurisdictions around the world, plus the leading players themselves, to limit emissions to more environmentally tolerable levels. Several of the supermajors are now actively seeking to do more to address their own emissions from oil and gas production through platforms such as the Oil and Gas Climate Initiative, which comprises many of the world’s leading producers and has invested more than US$6bn in carbon capture technologies and research.

Monitoring is vital But no matter where oil and gas is produced, the emission of greenhouse gases including carbon dioxide and nitrous oxide is often unavoidable, as is the release of minor amounts of unburned methane, for example. From an environmental containment perspective, it is vital to monitor how much of these gases is released into the atmosphere. For instance, Proserv Measurement’s global measurement and metering team

regularly works with offshore operators in the North Sea to support them in monitoring their release of produced water, fuel gas and flare gas.

Compliance and enforcement Legislation here is set out by the likes of the Offshore Pollution Prevention and Control regulations, following OSPAR recommendations to conserve the North East Atlantic, and the European Union Emissions Trading System. Operators are well aware that every vessel or platform they run in the North Sea needs to remain within preordained limits of oil traces in the produced water going over the side into the sea, and that their gas flaring needs to be within the caps long established by the UK government. If limits are regularly exceeded, then warnings are issued and fines will follow. Ultimately, in theory, a licence could be revoked for a serial offender. This is an example of how transparent, enforceable directives, alongside thorough measurement of potential emissions, could save operators money and have direct beneficial consequences for the environment. In regions where flaring and fuel gas releases are already curtailed by regulations, measuring emissions is critical for responsible business practice – but it cannot be a gamechanger with regard to its impact on climate change.

Legislation and measurement drive emissions reduction

However, emissions regulations, and measuring as part of that, have created a sea change in thinking around both policy and future strategy – in many regions. Take Iraq as one example. A country with challenging infrastructure development, unable at present to effectively reuse the gas it generates as part of its vast oil production and so the second biggest gas flaring nation as a consequence, has signed up to zero flaring by 2030. There is no doubt that this goal is driven by aspirations for domestic power generation and increased revenue, but the environment would be a direct beneficiary. When the likes of Iraq and Russia, the world’s largest gas flaring country, dotted with many remote oilfields, are capable of measuring and regulating emissions, then the impact on global warming will be much more notable.

Driving emissions down Proserv Measurement sees and responds to the correlation between regulators and operators and how the setting down of new directives has subsequently altered business methodologies. In the past decade or more, clients have increasingly requested, as part of their control systems, the provision of fuel gas meters, flare gas meters and quality analysers. No matter where the oil price might sit, or what the mood in the market might be, the requirement to reduce greenhouse gas emissions and other pollutants remains – so operators simply need to continue measuring. By James Holt, GM, and Colin Lightbody, Technology Manager, Proserv Measurement

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Changing policy and approaches are disrupting strategic thinking, say James Holt and Colin Lightbody at Proserv Measurement

Signing up to global best practices

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Oil and Gas Middle East

ACTIVITY TO WATCH ACROSS THE REGION

ADIPEC 2019

Bringing a global industry together Explore new technologies, business opportunities and partnerships at ADIPEC 11–15 November

ach year, the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) provides an important platform for the oil and gas industry to do business and exchange information. This year, it is set to welcome more than 145,000 visitors, including energy ministers, CEOs, decisionmakers and professionals with real buying power. Alongside the exhibition, the conference programme will explore the nexus of technology and energy, including the links between digital transformation, people and partnerships, that are enabling change and creating the basis to build the oil and gas companies of the future. Oil and Gas 4.0, a new agenda developed by both ADNOC and

ADIPEC to navigate and embrace the opportunities enabled by the fourth industrial revolution, will see itself embedded in the conference programmes. To support faster, leaner exploration and production and optimisation of costs, companies have accelerated research and development on technologies, as the digital revolution gathers pace in the region. According to management consultants McKinsey, digital technologies such as cloud, the Internet of Things, mobility, artificial intelligence, virtual reality, big data and analytics could cut capital expenditure by up to 20%. At the same time, it forecasts that total cash flows will improve by US$11 per barrel across the offshore oil and gas value chain, adding US$300bn a year by 2025.

Looking to expand into the GCC? The EIC can help If you want to make the most of the many business opportunities on offer in the GCC, get in touch with the EIC. Our Dubai team knows the local markets inside out and can introduce you to all the region’s key players. Just as important as our practical advice and connections is our Dubai LaunchPad service, which provides a low-cost, low-risk entry into this booming market. We can provide you with serviced office facilities, meeting rooms and hot desks as well as as organise your residence visa for you – everything you need to start building your business in the region.

34 energyfocus | www.the-eic.com

KUWAIT

Per capita, Kuwait is the world’s largest oil producer, with total proven oil reserves equivalent to about 100 years. Production currently stands at approximately 2.77 MMbbl/d. By 2020, Kuwait aims to reach a production capacity of 4 MMbbl/d and maintain this level through 2030. Downstream, Kuwait plans to grow domestic refinery capacity to 1.4 MMbbl/d and boost international cooperation.

QATAR

Qatar has shortlisted international oil firms for a stake in its expanded North Field megaproject, but may still choose to go it alone. The expansion of Qatar’s LNG facilities is one of the sector’s most lucrative projects, and oil and gas majors have been racing to secure a stake. Invitations to bid were sent out in August and the result is due to be announced in the first quarter of 2020, if Qatar decides to go with partners.

Middle East: Oil and Gas

SAUDI ARABIA

Saudi Vision 2030 outlines the country’s long-term goal to make 70% to 75% of its power capacity gas-fired (50% by 2040) and the rest generated by renewables and nuclear. Downstream, Saudi Arabia has set a range of strategic and economic goals under its Vision 2030 plan to diversify from crude oil export. The petrochemical and chemical sectors have a potentially crucial role to play in the 2020 National Transformation Program for a diversified and sustainable economic future. In addition to the recent acquisition of a 70% stake in SABIC, Saudi Aramco plans to invest US$100bn on new refining and chemicals projects.

BAHRAIN

In March 2019, Bahrain Petroleum Company started the Sitra oil refinery expansion. The programme is expected to increase capacity from 267,000 bbl/d to 360,000 bbl/d. A consortium of TechnipFMC, Samsung Engineering and Tecnicas Reunidas is delivering engineering, procurement, construction and commissioning under a US$4.2bn contract. The project will include a residue hydrocracking unit, hydrocracker unit, hydro desulphurisation unit, crude distillation unit, vacuum distillation unit, saturated gas plant, hydrogen production unit and hydrogen recovery unit.

OMAN

Natural gas is emerging as a significant contributor to the growth of Oman’s economy as heavy investments in Omani gas fields in recent years have boosted the country’s gas production. Oman’s natural gas production jumped by 12.5% to 43.75m cubic metres in 2018. The total reserve of natural gas is estimated to be 849.5bn cubic metres (with 22 gas production fields) in the sultanate.

UAE

The Abu Dhabi Onshore Oil Production Capacity Increase Project aims to boost Abu Dhabi’s onshore oil production capacity to 1.8 MMbbl/d. The project is targeting a number of onshore fields – including the Bida Al-Qemzan, Ruwais, Qushawira, Bab, Northeast Bab Fields and Al-Dabbiya – and is a central element in the Emirate’s plan to raise sustainable production capacity from 2.7 to 3.5 MMbbl/d.

The EIC UK Pavilions at ADIPEC This year, EIC is managing the largest ever UK delegation to ADIPEC – the Scotland Pavilion in Hall 1, UK Pavilion and Welsh Pavilion in Hall 8, an extended UK Pavilion in Hall 13, and, new for 2019, the UK Digitalisation Pavilion in the dedicated digital zone in Hall 14. As one of the world’s most important oil and gas events, ADIPEC is the perfect opportunity for UK companies to showcase their expertise and digital capabilities as well as consolidate strategic partnerships across the Middle East and unlock business opportunities. With several recent high-value contract awards, the Middle East continues to be a key area of focus for the UK’s energy supply chain – the region’s trusted and proven partner. If you are at ADIPEC, please take the time to visit as many of the UK exhibitors as possible and find out how they can add real value to your projects and programmes.

Scotland Pavilion Hall 1

AISUS Offshore, Alba Power, AquaTerra Group, Ardent Global, Artificial Lift Performance, ASET Oil and Gas Training Academy, Brimmond Group, Cable Solutions Worldwide , Centrifuges Un-Limited, Clyde Bergemann, Cortez Subsea, Dynamix-Modular, Exceed, Exsif OCS, Fearnley Procter, First Tech (First Marine), FoundOcean, GM Flow Measurement Services, HCS Control Systems, HRH Geology, ICS Learn, Innospection, JBS Fabrication, Kaseum Technology, Kelton Engineering, Morgenstern Energy, North Sea Lifting, North Sea Power Solutions, Nucore, PDi, Pioneer Oil Tools, Premier Oilfield Group (Corex), Rollstud, Safehouse Habitats, Safety Grip Solutions, SAS Environmental Services, Scottish Development International, SMS Oilfield, STR: Subsea Technology Rentals, The Linell Group (Moorfield), TPS Weldtech, UBH International, Wellpro Group, Whittaker Engineering, Whittaker Group, Xergy, Xergy Group

UK Pavilion Hall 8

ABTECH, ACE Winches, Advanced Sensors, Aqua Safety Showers International, BMT International, BS&B Safety Systems (UK), Cargostore Worldwide Trading,

Carrington Textiles, Chalmit Lighting, Churchill Drilling Tools (Rentals), Clarkson Research Services, CMP Products, Colson X-Cel, Compressor Products International (CPI), CorDEX Instruments, Cunningham Covers, Cutting & Wear Resistant Developments, Delta Mobrey, Dynamic Load Monitoring, E2S Warning Signals, Evoqua Water Technologies, EXHEAT, Flexitallic UK, Fluenta Solutions, Garlock , Garlock Pipeline Technologies, Goodwin International, Hawke International, Hi-Force, HMT Rubbaglas (HMT), HTL Group, Hubbell, Hughes Pumps, Hughes Safety Showers, IMI Precision Engineering, Innospec, Intervention Rentals International, Knowsley SK, Norbar Torque Tools, NRG Global Power, Oliver Valves, Online Electronics, Orga M & C, Oxifree Global, Pharos Marine Automatic Power, Pipeline Technique, Raytec, Rigtrans Intermodel, Stewart Buchanan Gauges, Total Waste Management Alliance (TWMA), Victor Lighting, Westley Group – Walter Frank, Whitford, Wolf Safety Lamp Company, Wood

UK Pavilion Hall 13

Angus Fire (Angus International Safety Group), Crowcon Detection Instruments, Custom Consoles, HyBird, MP Filtri, National Foam, Petroleum Software, STATS Group, TAG Pipe Equipment Specialists, TFC, Wessington Cryogenics, William Hackett Lifting Products

UK Digitalisation Pavilion Hall 14

Booth Welsh, Enteq Upstream, MEDCO, Proserv, ROVOP

Welsh Pavilion Hall 8

C&P Engineering Services, Cokebusters, Elmac Technologies, ESI Technology, Flamgard Calidair, Holyhead Towing Co, Huntingdon Fusion Tech, Reid Lifting, Seaward Safety, SEICO, Tritech Group, Wall Colmonoy, Welsh Government, Wrexham Mineral Cables, Zulu Joint Integrity

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Power Blockchain

he power industry has undergone a transformation in recent years, with utilities embracing new technologies and new sources of generation, and relying on data to make operations more efficient. It is now recognising the transformative impact of blockchain technology.

What is blockchain technology? Originally devised for digital currency, blockchain technology is, at its core, a giant ledger – an accountant’s dream of thousands of accurately noted transactions, digitally recorded, time stamped and encrypted. Each transaction forms one block, which is linked to other blocks to form a chain. If someone wishes to tamper with one block, they must change every block – making blockchains secure sequences of transactions. There can be multiple parties and transactions, requiring no central controller. They can be completely open-source, so anyone with a computer can add to the chain, or they can be private networks, similar to the intranets used in offices worldwide. Blockchain developer Pylon Network is offering its blockchain services to Spanish energy companies to ‘inspire cooperation among all stakeholders, based on trust and transparency,’ Markos Romanos, Pylon Network COO, tells Energy Focus. ‘As an energy geek, this is a very exciting period for the energy sector.’

Benefits Blockchain can provide utilities with traceable, permanent records, making it easier to identify trends or spot future supply gaps. For end users, customers can see where and how their energy is generated. They can switch tariffs or purchase renewably generated energy with ease, as blockchain platforms allow customers with solar panels, electric vehicles or wind turbines to quickly sell excess generation or storage to the grid – or just to a neighbour. Individuals and communities ‘can obtain and trade energy peer-to-peer and machineto-machine without complex intermediaries, and with an unprecedented control of their own data and energy usage, additionally empowered by the ability to source energy from smaller assets, including their own renewables,’ explains Mr Romanos. A study by Energy Cities in 2018 found that using blockchain networks reduced bills for vulnerable energy consumers. It is not just utilities and end users that can benefit: due to the open nature of blockchain technologies, startups can gain vital market data, opening up the energy trading industry and allowing new competition to flourish.

Challenges Pilot projects across Europe and the US have revealed that blockchain’s biggest issue is balancing data transparency with user privacy. ‘The data that will fly around the ether is immense, as is the scope for fraud,’ says Thierry Mortier, EY’s Global Innovation Lead for Power and Utilities.

How can we check whether an energy unit that claims to be renewably generated is not fraudulent, and actually fossil fuel-generated? There is also the issue of pricing – will there be limitations or standard pricing, or will it be a Wild West of bidding? A 2019 study published in Applied Science identified the additional difficulty of matching. At decentralised, local levels, matches between buyers and sellers have to be precise and accurate in order for them to work. The study concluded that there must be more regulation on blockchain technologies to prevent fraud and exploitation before larger companies can adopt it.

Future outlook Despite the challenges facing blockchain, many improvements have been made since it was first developed. Different techniques can be used to protect the annonymity of consumers: combining blockchains, changing addresses with pseudonyms, and using algorithms and encryption to ensure security. The 2019 study concluded: blockchain technology is effective for smart grids and micro grids, renewables and decentralisation. It can increase the flexibility of the energy market and enable intelligent energy management by turning consumers into suppliers. However, many more pilots, simulations and tests are required to perfect the technology before it can be widely adopted throughout the power and energy industries. As Mr Romanos tells Energy Focus, blockchain is a tool for the digitalisation of energy trading – ‘not a silver bullet’.

IMAGE: ISTOCK

POWER to the PEOPLE

Turning consumers into suppliers, Energy Focus looks at how blockchain technology is changing the power industry www.the-eic.com | energyfocus

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Power Energy storage

arket demand, coupled with competitive prices, have helped to spur unprecedented levels of renewable deployments in recent years. However, there are still significant hurdles to the achievement of 100% carbon-free electricity. Intermittency is perhaps the most well-known issue, but recently a much more difficult problem has arisen – making renewables gridsynchronous in order to ensure grid stability and reliability.

The power of synchronicity On 9 August 2019, the UK grid suffered a near-simultaneous failure of two power generation facilities – the Little Barford

gas-fired power station and the Hornsea offshore wind farm. The UK’s most severe blackout in more than a decade caused rush hour travel disruption across its biggest train stations, railways, roads and airports, and left almost a million homes across the country in the dark. As the investigation continues, many attribute the outage to a sudden drop in grid frequency due, in large part, to decreasing synchronicity in the grid’s power supply. Synchronicity, as well as inertia and frequency, are gaining attention from grid operators as they seek to balance constant power and the integration of increasing shares of intermittent renewables into the grid. To this end, grid-synchronous, long-duration energy storage is key to modernising the grid.

Long-duration energy storage A crucial benefit of giga-scale, long-duration energy storage is that these systems can provide services at all levels of the electricity system – supporting power generation, providing stabilisation services to transmission grids and distribution networks, and acting as a source of back-up power to end users. There are a few grid-synchronous energy storage technologies – pumped-hydro and compressed air, for example – and each has its own geographic constraint. Pumpedhydro relies on dramatic elevation changes and compressed air requires large underground caverns, rendering each suitable only for certain geographies. Other energy storage options, like electrochemical batteries, are most suitable for small-scale

A new era for energy storage For grid stability, long-duration energy storage is necessary and urgent, says Dr Javier Cavada at Highview Power

www.the-eic.com | energyfocus

Power: Energy storage

Grid-synchronous, long-duration energy storage is key to modernising the grid and short-duration services. In addition, they require significant costs to scale up to higher power capacities and cannot provide the synchronous inertia needed or the levels of voltage control for grid stability.

Cryogenic energy storage One utility-scale technology that enables grid operators to maximise renewable penetration is Highview Power’s cryogenic energy storage system, which produces zero emissions, uses only benign materials and does not require the use of water in the energy storage process. In addition, it is particularly well-suited for providing grid-scale storage due to its capacity and ability to be sited at the point of demand. Relying on mature components, it can be deployable immediately, while other energy storage technologies await testing, maturation or continued development. The system cools ambient air to its liquid state, which results in a 700-fold decrease in volume. The liquefied air is then stored in containers similar to those used for liquefied natural gas until energy is needed. In this process, energy is stored in the volume differential of gaseous and liquid air. When reheated, the liquid air expands to its original volume, creating enough pressure to drive a turbine. A cryogenic system is the only long-duration energy storage solution available today that offers multiple gigawatt hours of storage, representing multiple days’ worth of storage, not just minutes or hours.

Power grid fragility Due to the inability to unilaterally generate power and keep the grid stable, energy storage must fill this lapse in renewable injections and supplement other grid shortcomings. Historically, transmission network failures have caused the majority of power failures. Today, however, without a

40 energyfocus | www.the-eic.com

Long-duration energy storage Supports

power generation

Provides

stabilisation services to transmission grid and distribution network Acts as

back-up power to end users

grid-synchronous energy storage technology, and as renewables contribute increasingly more to the grid, we may be re-entering an era where the generation of power itself contributes more to outages than transmission network failures. The precariousness of the grid’s transmission network is evident in the widespread blackouts encountered across the globe in recent months. In June, a multi-country outage across Argentina, Uruguay, Chile, and Paraguay left millions without electricity for more than seven hours. Caused by a ‘massive failure’ of the grid that serves these countries, the outage affected more than 48 million people. In July, parts of New York City were left without power as a result of a substation failure, affecting tens of thousands of consumers. In early August, tens of millions of Indonesians were affected by a nine-hour transmission line failure. Days later, the UK was affected by the aforementioned hours-long outage. These events do not indicate regional transmission network aberrations, but rather demonstrate the global fragility of power grids and should prompt universal concern over grid stability and reliability in transmission networks. Of course, resolving the fragility of the existing transmission network altogether is wishful thinking. However, alleviating extensive downstream impacts of localised events can be accomplished. Cryogenic energy storage facilities tied to community wind or solar energy generation arrays can help reduce the number of affected consumers during events.

Modernising the energy grid As renewables continue to rapidly grow and become the preferred mainstream energy source in the bid to slash emissions, it is important to protect the stability and strengthen the resilience of the grid by continuing to develop and promote all forms of energy storage – especially long-duration, grid-synchronous energy storage technologies including cryogenic energy storage. Only with this type of giga-scale long-duration energy storage will renewables become reliable enough to become the baseload source of power. By Dr Javier Cavada, President and CEO, Highview Power

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Nuclear Hydrogen

avigating the disruption of climate change, EDF Energy R&D is leading the innovative Hydrogen to Heysham (H2H) project, which is looking at generating low-carbon, low-cost, local hydrogen from Heysham Nuclear Power Stations.

Clean energy Hydrogen could help the UK with its targets to reduce emissions by 2050 and to reduce its reliance on fossil fuels. ‘Hydrogen gas has long been talked about as a new source of clean energy. When hydrogen burns, virtually the only byproduct it creates is water,’ Mr Mamo explains. ‘It is one of the new ways we could provide low-carbon energy for our factories, cars and home heating.’ According to the UK government, 10% of the UK’s emissions come from energyintensive industries such as glass and cement, heat and transport. These emissions could be lowered by replacing natural gas with hydrogen, which could also create two million jobs and £170bn of annual exports, by 2030, according to UK Climate Change Minister Lord Duncan.

Backing hydrogen Despite these figures, the Committee on Climate Change concluded in its Net Zero

report that the development of hydrogen technology in the UK had been too slow. To speed up development, the UK government is now investing £390m into the £40m Hydrogen and Fuel Switching Innovation Fund, a £100m competition, and the £250m Clean Steel Fund (as the iron and steel industry accounts for 15% of industry emissions). ‘It’s great news the government has announced funding for a whole series of projects to explore how the use of hydrogen can be rolled out across the UK,’ says Mr Mamo. However, there is a caveat. The International Energy Agency estimates that hydrogen production worldwide – mostly for producing fertilisers, and use in oil refining – is responsible for around 830m tonnes of carbon emissions, explains Mr Mamo. This is because the fossil fuel process often uses polluting methane gas. These emissions ‘can be removed from the process, but doing so adds significantly to the cost,’ says Mr Mamo.

Hydrogen from nuclear To save emissions and cost, the Hydrogen to Heysham (H2H) project led by EDF Energy will use a different method: a lower electricity price can be achieved by connecting the electrolyser directly to the nuclear power plant, enabling the production of hydrogen at a competitive cost. This also eliminates intermittency (from renewables), making hydrogen

These are early days but, ultimately, hydrogen production might be possible at all of our eight nuclear power stations around the UK scaleable, affordable and low-carbon. ‘We believe the constant supply of low-carbon power from nuclear will be more costeffective than renewables,’ says Mr Mamo. EDF is first conducting a study to look into the commercial and technical possibilities.‘After that, we hope to set up a demonstrator project on the Heysham site which would begin operating in 2020,’ says Mr Mamo. ‘These are early days but, ultimately, hydrogen production might be possible at all of our eight nuclear power stations around the UK.’ The demonstrator phase aims to establish Lancaster as a local hub for hydrogen, serving multiple applications across Lancashire. ‘Hydrogen could be used for local industry and transport, and it might one day heat some of the city’s homes,’ says Mr Mamo.

Using nuclear in a new way

IMAGE: GETTY

Hydrogen from nuclear power could be a new source of low-carbon energy, says Xavier Mamo at EDF Energy

www.the-eic.com | energyfocus

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Nuclear Digitalisation

he need for plant upgrades, life extensions and decommissioning, together with Hinkley Point C heralding the start of a new era of nuclear power in the UK, present an industry ripe for realising value from Industry 4.0 technology. Connecting machines to physical systems to create intelligent networks, Industry 4.0 (the fourth industrial revolution) encompasses a range of sophisticated tools and data systems, including the Internet of Things, artificial intelligence and autonomous systems. One example of its effective use in the nuclear industry is how intelligent networks can predict failures and trigger maintenance events.

IMAGE: ISTOCK

Machine vision Machine vision is the process of providing automatic, image-based inspection and analysis for industrial processes. Machine vision technologies can provide a way to obtain automated, metric information from the world around us. For example, 3D cameras can be used to detect objects for autonomous robots to accurately grip and pick the object; or spectral imaging cameras can determine the chemical composition of items. In the nuclear industry, machine vision can be used for remote inspections as part of periodic plant inspection or as part of a permanently installed condition monitoring system. The equipment is specifically designed to work in the harsh radiated environment. Currently, most remote inspections are either subjective visual examinations undertaken by staff, or Non-Destructive Examinations (NDE). The visual inspections do not provide metric information. They are usually from low resolution cameras which provide poor quality images from which an assessor must determine if the item under test is suitable for continued operations or not. With NDE inspections, a highly trained operator must deploy equipment into a facility and usually must make physical contact with the item under test. This can be a difficult and time-consuming task. Machine vision can be a viable alternative to both methods as it can either be used in isolation or in conjunction with visual examination and NDE.

Data:

the new fuel for nuclear The need for high quality data on a plantâ&#x20AC;&#x2122;s condition has never been more critical. Now is the time for nuclear to go digital, writes Will Newsom at Assystem Safety and cost benefits Through careful application, machine vision can provide many benefits to the nuclear industry. For example, instead of a visual examination, a laser line scan of structural steel can determine the size of surface-penetrating defects. This scan can be directly imported into a finite element analysis model where the effect of the defects can be analysed. Machine vision can also identify and classify defects in nuclear waste packages and determine the size of the package and the quantity of corrosion, as well as metrically quantify the contaminants identified. Ultimately, using machine vision, there is no longer a need to rely on subjective analysis or to contend with difficult equipment deployments. High quality metric data can be obtained on almost any remote plant item. This data can then be directly fed into a digital representation of the plant item where decisions can instantly be made on the effect of their condition. This allows us not only to

speed up the inspection itself but also to speed up the post-processing and analysis of the inspection data. We are now able to obtain inspection data on items where this was once impossible. The effect of using machine vision is that inspection times can be cut from days to minutes or weeks to hours, and it can identify areas of risk that are invisible to the human eye, enabling safer assessments of plant. It also reduces the amount of human contact required near the hazardous area, lowering the risks associated with maintenance in a radiated environment.

Making it happen The more embedded machine vision and other Industry 4.0 technology become to the nuclear industry, the sooner we can realise the cost savings and safety benefits. Now is the time for the nuclear industry to seize the opportunity for innovation that is before us, innovating technology to suit our needs and creating our own digital revolution. www.the-eic.com | energyfocus

Renewables Carbon pricing

The future of carbon pricing in the UK Post-Brexit, what kind of carbon pricing should the UK put in place? Lessons can be learnt from successful schemes around the world, say Joshua Burke and Rebecca Byrnes at the Grantham Research Institute

Which pricing scheme? While the preference of the UK government is to continue pricing carbon through the EU ETS or a domestic emissions trading scheme linked to the EU ETS, rather than a carbon tax, a ‘no deal’ scenario would change these options. In such an eventuality, the UK government will initially meet its existing carbon pricing commitments via the tax system, which would take effect from 4 November 2019 – assuming no further delays with the Brexit negotiations. Such a move would represent a significant departure from current UK policy. Under the government’s no-deal planning, the tax will apply to all entities currently participating in the EU ETS. A rate of £16 would apply to each tonne of CO emitted over and above an

46 energyfocus | www.the-eic.com

entity’s emissions allowance, calculated based on the number of free allowances previously held under the EU ETS. With this in mind, in the policy brief Global Lessons for the UK in Carbon Taxes we highlight what design elements contribute to the successful implementation of carbon taxes.

Differences in tax design The experience of countries such as Norway and the UK show that a carbon tax is effective in reducing emissions, but the scale of emissions cuts depends on the proportion of greenhouse gas emissions that are covered and the price level. Our research shows both of these dimensions vary considerably between countries that tax carbon. For example, in terms of coverage, 70% of greenhouse gas emissions are covered by the British Columbia carbon tax in Canada, in contrast to France’s scheme, which covers just 35% of emissions. Price levels also vary widely, with Poland’s carbon tax set at just £0.06 per tonne of CO2, while Sweden sits at the other end of the spectrum at £100.30 per tonne. Carbon taxes have been shown to succeed when they are designed transparently and with fairness in mind. British Columbia introduced its carbon tax in 2008 and by 2011 public support for the tax had increased to over 50%. The tax has reduced emissions by 5–15%, with negligible impacts on the economy. Its success is due particularly to: Slow phase-in and raising, to give businesses and households time to adjust

Giving all revenues back to low-income households and trade-exposed industry The Ministry of Finance communicating the use of the revenues clearly and transparently

Lessons from abroad However, taxing carbon can be challenging on several fronts. First, a lack of cross-party political support can hinder efforts to set a long-term price signal; this happened in Australia where a change of government saw the country’s carbon tax repealed after two years, despite it reducing emissions. Second, a lack of public support can arise from tax increases that are perceived to be too high or otherwise unfair. The French Gilet Jaunes movement arose in part due to the poor design of the French carbon tax, which was coupled with tax rebates for high-income households. Third, success rests on ensuring major emitters pay for their emissions. However, while the phase-out of coal power in the UK has been attributed in large part to the carbon price support, the large number of exemptions from carbon pricing among major industrial entities have seen limited emissions reductions in that sector. For transboundary industries such as aviation, an effective tax requires international agreement, which often results in a lowest common denominator approach.

IMAGE: GETTY

he UK government has set itself an unprecedented challenge in legislating to reach net-zero greenhouse gas emissions by 2050, the first major economy to do so. It now faces the task of actually reaching that goal – tougher targets do not themselves reduce emissions. Yet as the UK is also in the process of leaving the European Union (EU), its participation in the country’s main carbon pricing mechanism – the EU Emissions Trading System (EU ETS) – is at risk. This is a significant plank of UK climate policy, so ensuring a smooth transition to alternative arrangements is critical in order to avoid jeopardising achievement of the net-zero target.

A carbon price on its own will not be enough A pragmatic approach is crucial For carbon pricing to continue to be successful in the UK, there are lessons that can be learnt from British Columbia. Careful communication, gradual scaling up and transparent earmarking of tax revenues, including for disadvantaged households and businesses, are crucial. But deep decarbonisation in the UK also requires a pragmatic approach to carbon pricing. The level of pricing that is politically feasible is likely to differ by sector. The availability of zerocarbon solutions, their costs, their public acceptability and the political economy background in which they are proposed will differ. Therefore, varying the tax level across sectors may be necessary. Departing from the uniform carbon price across firms and fuels (which is advocated by economic theory) is a major concession to pragmatism â&#x20AC;&#x201C; a viewpoint echoed by Joseph Stiglitz, who recently championed a departure from the recommendation of a single carbon price for all uses in all places and times. The UKâ&#x20AC;&#x2122;s future carbon price needs to be ambitious, but political realities and the significant technological and behavioural change required across the economy mean a carbon price on its own will not be enough. Complementary policies aimed at innovation and behavioural change, tailored to each sector of the economy, will be needed if the UK is to reach its net-zero target by 2050. The number of carbon

By Joshua Burke, Policy Fellow, and Rebecca Byrnes, Policy Analyst, Grantham Research Institute

pricing schemes in operation worldwide that can offer lessons as the UK chooses its preferred option

www.the-eic.com | energyfocus

Renewables Space solar power

Q&A: Dr Paul Jaffe at the US Naval Research Laboratory talks to Energy Focus about how close we are to the reality of space-based solar power What are the key drivers behind spacebased solar power? Space solar has four key selling points: it’s clean, it’s constant, it’s globally transmissible, and it’s effectively unlimited. While several emerging energy sources can claim to be clean, there is only a small subset that can also claim to be constant. No other energy source can be transmitted globally. The need for clean, baseload energy is only increasing. This is a critical problem to solve for continued global prosperity. Several key elements have changed in recent years that make space solar worth a close look: The way we manufacture satellites is changing. Rather than being one-of-kind, labour-intensive creations, there is now a bona fide trend towards mass production. This is

driving the cost per unit mass for spaceflight hardware to new lows. There have been key advancements in electronics for power conversion and lightweight materials for space. This means the specific power (W/kg) of space hardware is now able to greatly increase. We have entered the era of commonplace rocket booster reusability. Elon Musk’s SpaceX has now been reusing its rockets for years, and launch costs are starting to come down. Jeff Bezos’ Blue Origin and others are not far behind. Important advances in space robotics mean we have a path to the means to assemble large satellites in orbit. This technology unlocks a new paradigm for building space systems.

Space: The final frontier

Simply put, space solar is collecting sunlight in space and sending wirelessly to wherever it is needed

Space solar power: Renewables

Taken together, these factors point to an increased chance that space solar can compete in the future with the cost of even the cheapest sources of energy today. What is space-based solar power and how does it work? Simply put, space solar is collecting sunlight in space – where it is brighter than anywhere on Earth – and sending it wirelessly to wherever it is needed. There are several ways this could be done, and the idea has been examined in various incarnations since the 1960s. The power beaming link in particular could be accomplished with either microwave or optical transmission technology, and solar collection could be done with photovoltaics or a heat engine. There are literally dozens of different proposed architectures. Recent technological advances shed new light on several of the approaches and have suggested new ones. A key benefit of space solar is its ability to redirect energy globally without the need for moving mass or the reliance on existing grid infrastructure. Space solar could enable the transmission of energy to the developing world; to temporary or remote defence, mining, or research facilities; or to areas that have been ravaged by natural disasters.

MAIN IMAGE: SPS-ALPHA CONCEPT AND GRAPHIC COURTESY JOHN C. MANKINS

How far has this game-changing technology come in proving its feasibility? It still has some way to go. Some very compelling power beaming demonstrations were conducted by NASA in the 1970s, but since then technology development has been relatively slow. There are exciting recent developments, but it will likely still be many years before a pilot system is demonstrated. What is now needed to make the technology a reality? There are formidable, but not insurmountable, hurdles on multiple fronts. For microwave power transmission, there is a big regulatory challenge in getting a spectrum allocation, as the spectrum is already quite crowded. Lasers transmission offers an opportunity around this, but faces other challenges, like dealing with cloud cover. Any power beaming approach will need to offer reassurance that it will be safe. The technology for this is less of a challenge than most people probably think, but public perception is obviously very important, as nuclear power has shown us. Undoubtedly, the economic challenges are significant. Compelling pathfinder demonstrations could probably be accomplished for tens or hundreds of millions of dollars, depending on their scale. It will likely take billions of dollars to get to a system that can provide meaningful, usable power from space to widespread end users. Because of the long development time – in the order of 10 years – it is challenging to attract private capital.

About Dr Paul Jaffe Widely recognised as one of the world’s leading experts in space solar, Dr Paul Jaffe is an electronics engineer and researcher at the US Naval Research Laboratory (NRL). During his 25 years at the NRL, he has worked on dozens of space missions and breakthrough technology development projects. For the last 10 years, he has studied and developed technology for power beaming and solar power satellites.

The development approach could follow one of several models: The Global Positioning System (GPS), in which a government undertook the development and risk. Today, we recognise GPS as a critical service, and other countries around the world have consequently developed their own navigation satellite systems, but when GPS commenced in the 1960s it surely seemed outlandish in scale. Today, a coalition of countries (including China, the European Union, India, Japan, Russia, South Korea and the US) is working on the International Thermonuclear Experimental Reactor for fusion technology. A similar effort might be constituted for space solar. Communication satellites were catalysed in part by the Communications Satellite Act of 1962 and related efforts through the International Telecommunications Union. It’s possible industry could be incentivised to invest in space solar technology in a similar way. Who will win the space solar race? And when do think we will all be accessing space solar power? In the end, it boils down to political will. With strong leadership, the US was able to successfully send people to the moon in less than 10 years. Today, any of several countries could seize the initiative for space solar. The prospect of effectively becoming the electrical utility for the world, or perhaps the ‘Saudi Arabia of clean energy’, has major economic and geopolitical implications.

(Above right) Dr Jaffe holds NRL’s recordholding, patented space solar ‘step’ conversion module in front of the thermal vacuum test chamber used during its characterisation (Below right) Overview of the thermal vacuum and simulated solar illumination test facility employed for testing of NRL’s space solar conversion module prototypes

www.the-eic.com | energyfocus

EIC Member Focus Brainnwave

MY BUSINESS

Steve Coates, Brainnwave

enriches them by creating a single stream of information. A hard-core data cruncher, Ossian finds patterns hidden in data, making it easier for users to extract insight and apply it to real business cases.

Tell us a little bit about Brainnwave? Brainnwave is an Edinburgh-based business intelligence start-up created in 2015 by three experienced entrepreneurs. Our company offers solutions in areas such as data management, data science, machine learning, software engineering and geospatial analysis. The company is active in the oil and gas, utilities, metals and mining and housing market segments. What is a typical day like at Brainnwave? There is no typical day! Some days we are playing with new technology to understand how it works, other days we are nose to the grindstone to get the sprint out of the door. Some days we have Cas, our office dog, sniffing around and other days everyone is working from home. The one thing that is typical is that we all love what we are doing at Brainnwave. If you hadn’t founded Brainnwave, what would you have done instead? I have always wanted to be an entrepreneur. My early career as a consultant was a good fit for me as every client engagement came with a new set of challenges and a new learning curve. The problem with consulting was that it didn’t fit with my ambitions to also spend as much time with my family as possible! It’s all about finding that balance between fresh challenges and family – so if it wasn’t Brainnwave, it would probably be some other tech start-up creating technology to disrupt business as usual. What is your biggest highlight to date? Winning our first customer. When someone is prepared to pay, it validates your ideas, it galvanises the team and creates a new focus in the company.

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CEO and Co-founder Steve Coates takes Energy Focus behind the scenes at Brainnwave Tell us a bit more about a solution the company has provided? Two years ago, Aggreko – a leading provider of mobile and modular power and temperature control solutions – was looking for ways to make its decisionmaking process smarter and faster. Access to business data was not a problem: the company already had resources dedicated to tracking multiple streams of information. But how could Aggreko reduce the burden of aggregating, cleansing, organising and analysing its huge data sets across regions and sectors for vital strategic analysis? In response, we created Ossian, a unique, innovative business intelligence platform which connects to customers’ various internal and external data silos and

How important is it for companies to embrace digital tools? Business in every industry and sector is becoming data driven. Organisations need to know what this means for their business. Brainnwave can help with that. A winning game plan for any company in today’s business environment, particularly in the current economic uncertainty in global markets, relies on new digital tools that helps them prosper. What’s next for Brainnwave? We are currently in the process of bridging the chasm dividing early adopters and mass usage of our business intelligence solution. The company is keen on growing its relationships with existing clients but is also looking to win more business on the back of the success of its Ossian platform. We have already signed a three-year enterprise licence with Aggreko – which is currently negotiating an expansion of the platform – and has recently secured another contract with Wood. The company is also collaborating with the University of Edinburgh on projects to apply data science in new ways to identify business opportunities.

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