Energy Focus Winter 2018 by Energy Industries Council

energyfocus

ISSUE 30 WINTER 2018

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 OIL AND GAS The Internet of Things goes offshore

POWER Benefits of full lifecycle digitalisation by AVEVA

NUCLEAR NuScale and Rolls-Royce on their big SMR plans

Plugging in: We look at how the industry is embracing the digital revolution and what new technology is on the horizon

ROPM F TO VIEW THERt HonMP,

The Clark State f y g Greretar y os, Energ Sec usines ustrial for Band Ind teg y Stra

RENEWABLES Teslaâ&#x20AC;&#x2122;s plans to address global energy demand

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Contents ISSUE 30 WINTER 2018

Greg Clark

FROM THE EIC

POWER

24 IoT goes offshore

40 Powering up digitalisation

5 Foreword

Ian Phillips, CEO, Oil & Gas Innovation Centre

6 View from the top

28 A smart move for the offshore industry

From the Chief Executive Greg Clark, Secretary of State for Business, Energy and Industrial Strategy

10 News and events Updates from the EIC

14 The big question

We ask members: How can new technologies and digitalisation benefit the energy industry?

16 Special report: What does digital mean for the future of energy?

Jeremy Bowden on the energy industry embracing digitalisation

21 Managing cyber risks: A top priority for energy companies Nicholas Newman talks tackling cyber threats

56 My business

Mike Shortall, ABLE Instruments & Controls

OIL AND GAS

Fraser Graham, Business Development Executive, Apollo

31 Drilling down into data

Bob Aldridge, Senior Business Strategy Manager, AVEVA Solutions

43 Could offshore power stations solve our energy problems?

Tom Baxter, Senior Fellow in Chemical Engineering, University of Aberdeen

Going digital

James Gavin, Upstream Intelligence

NUCLEAR

32 The big potential of small-scale LNG

Joanna Martin Ziegenfuss, Associate Director Energy, Berkeley Research Group

35 Plenty of optimism in West Africa

Cyber security

Andrew Scutter, Upstream Sector Analyst, the EIC

44 SMRs: Powering a UK–US energy partnership

Tom Mundy, Chief Commercial Officer and Managing Director (UK & Europe), NuScale Power

46 SMRs: A once in a lifetime opportunity David Orr, Director, Future Programmes & Technology, Rolls-Royce

38 EGYPS 2018

Putting the country’s key O&G players under one roof

49 Q&A

Patrick O’Sullivan, Decommissioning Specialist, IAEA

Chile's middle market

Decommissioning and waste

RENEWABLES 53 Driving force of the future

Tesla on energy storage

54 Flexibility is key

Carlos Barría, Consultant, Inodú

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 Edward White +44(0)20 7091 8638 edward.white@the-eic.com Publishing director Aaron Nicholls Production Rachel Young Senior designer Gary Hill Design studio manager Claire Echavarry

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.

Publisher Redactive Media Group, Level 5, 78 Chamber Street, London E1 8BL Tel: +44(0)20 7880 6200 www.redactive.co.uk

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Foreword Stuart Broadley CEO

From the Chief Executive: In this edition Energy Focus starts the year by looking to the future and how the industry is embracing the digital revolution

I’d like to start by wishing all our readers a happy new year. I hope you’ve all come back from the Christmas break refreshed and looking forward to the year ahead. January is an interesting month in the calendar, a time to reflect on the year gone by as well as a chance to contemplate what lies ahead. 2017 felt like a transitional period for the energy industry, where we finally managed to get things back on track after some of the most difficult years I can remember during my 20 years in the business. The oil price is slowly but steadily rising, some projects have started to get up and running and there is now a returning sense of confidence out on the UKCS. Notably, Hurricane gave the green light to its Lancaster Area project and Premier Oil looks likely to reach an FID on its Tolmount discovery early this year – major developments that will ensure the North Sea continues producing for years to come. While the UK oil and gas industry seems well on the road to recovery, 2017 saw massive developments take place in our power, nuclear and renewables sectors. Construction at Hinkley Point C ramped up, tidal energy received a huge boost with MeyGen’s Pentland Firth project producing first power, and offshore wind broke all records in September’s contract for difference auction with prices coming in as low as £57.50/MWh – way below the £100/ MWh target set for 2020. It’s no exaggeration to say that the UK is leading the world in clean energy generation, and now is a great time for UK suppliers to position themselves at the forefront of these technologies as they expand globally.

So, that was the year that was, but what about the one to come? Well, there’s probably no-one in a better position to tell us what the future holds for the UK energy industry than the Rt Hon Greg Clark, Secretary of State for Business, Energy and Industrial Strategy. In his interview with us (page 6) Mr Clark outlines how the oil and gas industry fits in with the government’s vision of a decarbonised UK, what plans are in place to drive down offshore wind costs even further and how he’s putting CCS back on the agenda. When looking to the future one issue that is impossible to ignore is that of digitalisation. This issue of Energy Focus explores how we’re embracing the digital revolution and shaping tomorrow’s world. On page 24, Ian Phillips, Chief Executive Officer of the Oil & Gas Innovation Centre, describes how the Internet of Things has moved offshore. New apps, smart sensors and 4G are making projects on the North Sea safer and more profitable. When it comes to innovative new technology, EIC member companies are at the cutting edge. We asked Booth Welsh, S3-ID, Servelec Controls and Siemens how they’ve seized the almost limitless possibilities offered by the digital age to put products and services in place which are changing the way the industry works (page 14). Of course, with new developments come new challenges and this world of cloud storage and increased interconnection has created new opportunities for cyber criminals. On page 21 you’ll find a specially commissioned article on how to mitigate against these risks, as well as an update on the data protection laws set to come into force in Europe in May this year. Essential reading.

This year also sees the EIC celebrate its 75th birthday! That makes us one of the oldest trade associations in the world. We’ve got a whole series of events planned to mark this milestone, including a VIP reception at the House of Lords. All the proceeds from our 75th anniversary events will go to two very worthy charities: Cancer Research UK and The Ocean Cleanup. To find out more about this and other EIC activities we’ve got planned for 2018, please turn to page 10.

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

www.the-eic.com | energyfocus

From the EIC Q&A Greg Clark

We want the UK to become a global technology leader in CCUS and are investing ÂŁ100m in innovation

View from the top Q&A: Greg Clark Secretary of State for Business, Energy and Industrial Strategy

6 energyfocus | www.the-eic.com

Q&A Greg Clark: From the EIC

Energy Focus meets Greg Clark, Secretary of State for Business, Energy and Industrial Strategy, the minister who has helped push the green agenda forward, driving big investments for low carbon innovations How do oil and gas companies fit in with the government’s bold new vision for decarbonising the UK? Oil and gas will remain important fuels and will allow a manageable and sustainable transition to a lower carbon future. Clean growth is a key part of our Industrial Strategy and we are determined to continue to lead the world in the transition to a low carbon economy, ensuring that the UK maximises the economic opportunities. This will mean working with the sector to explore its potential contribution to clean growth through technologies such as carbon capture, use and storage (CCUS), and the use of hydrogen as a low carbon energy source. The increased use of biogas and the future possibility of hydrogen also provide the opportunity of using gas and the gas grid as part of a long-term, low carbon future.

IMAGE: CHRIS McANDREW

What key actions will the government now take forward to kick-start CCUS and persuade reticent investors that it will be a success this time around? The Clean Growth Strategy sets out how we are cutting emissions while keeping costs down for consumers, creating highly-skilled jobs and growing the economy. As part of our Industrial Strategy Challenge Fund, we have said that we will support innovation in low carbon industrial processes and technologies including CCUS. CCUS has huge potential to decarbonise the economy and maximise economic opportunities for the UK. We want the UK to become a global technology leader in CCUS and are investing £100m in innovation work as well as working with global partners to reduce costs and accelerate deployment. The Joint Industry-Government Decarbonisation Action Plans, published alongside the Clean Growth Strategy, set out the importance of carbon capture to decarbonising some energy intensive industries. The government has welcomed ‘sector deals’ in its Clean Growth and Industrial Strategies. What do these ‘sector deals’ mean for the UK energy supply chain? The shift to clean energy presents a multi-billion pound

opportunity for businesses and, as our Clean Growth Grand Challenge outlines, we want to maximise the advantages for UK industry from the global shift to clean growth. We will position the UK as a world leader, deploying the major interventions of the Industrial Strategy – in innovation, skills, business and local growth, trade and investment – in support of this goal. Innovation in clean growth will be important for low cost, low carbon infrastructure systems, as well as for realising industrial opportunities. We will increase support for clean growth innovation by making this a strategic priority for the Industrial Strategy Challenge Fund. Over the last decade, we have shown there is a clear joint benefit to UK businesses and the government from establishing partnerships where the government works with sectors to support them to grow, invest and reach their potential. Stakeholders have warmly welcomed our proposals to extend this successful model of collaborative working to other parts of the economy where there is a compelling case for action to raise the productivity of the sector in question. While sector deals are not required for every area of industry, we welcome businesses coming to us to signal their interest in being involved in future sector deals. How will the government harness the potential of distributed energy and smarter energy systems? Upgrading our energy system to make sure it is fit for the future is a key part of our Industrial Strategy. A smarter energy system will create opportunities to reduce energy costs, increase productivity and put UK businesses in a leading position to export smart energy technology and services to the rest of the world. We recognise the potential for storage to help ensure that energy supplies are secure, affordable and clean. It is a key part of the transition to a smarter and more flexible energy system, which we are supporting. In July 2017, we published the Smart Systems and Flexibility Plan, which announced the government’s commitment of up to £70m to support innovation in smart energy, including storage, up to 2021. This includes two storage innovation competitions, a £9m cost reduction

About Greg Clark The Rt Hon Greg Clark was appointed Secretary of State for Business, Energy and Industrial Strategy on 14 July 2016. Prior to this, he held a number of ministerial positions and was first elected as the Conservative MP for Royal Tunbridge Wells in 2005. Before becoming an MP, Mr Clark worked for the Boston Consulting Group. He was the BBC’s Controller of Commercial Policy and became Director of Policy for the Conservative Party in March 2001. Mr Clark was born in Middlesbrough in 1967 and attended the local St Peter's Comprehensive, South Bank. He went on to study economics at Cambridge University and was awarded his PhD at the London School of Economics.

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Q&A Greg Clark: From the EIC

competition to reduce the cost of large-scale energy storage technologies and £600,000 first-of-a-kind feasibility studies for large-scale future storage demonstrators. We have also launched the Faraday Battery Challenge, a £246m investment to help the UK become a world leader in the research, development and manufacture of electric battery technology. The Industrial Strategy Challenge Fund, ‘Prospering from the Energy Revolution’, was recently announced in the Industrial Strategy White Paper. This new innovation challenge intends to enable electric vehicles and energy storage to become commercial and integrated in the energy market. We are also working to ensure that key enablers for technologies such as home battery storage systems are in place. These include smart meters and measures to encourage smart tariffs – which allow consumers to benefit from cheap energy when demand is low – both of which are part of the Smart Meters Bill which is currently going through parliament. What technological solutions does the government need to help balance supply and demand in the National Grid? Research by Imperial College and the Carbon Trust indicates that moving to a smarter, more flexible system could save UK consumers up to £40bn by 2050. In order to feel these benefits, we will need to employ a diverse array of technologies and solutions that can enable us to use energy more flexibly and decarbonise cost-effectively. For example, maximising the usable energy from intermittent low carbon generation like solar or wind, and deferring the need for costly network reinforcements or building new generation. The Industrial Strategy, alongside our Smart Systems Plan, published last July, will provide the framework and investment which will allow British businesses and consumers to capitalise on these emerging opportunities. How will the government support the growth of zero marginal cost technologies? The UK is widely recognised as one of the best places to invest in renewable energy, with Bloomberg New Energy Finance’s 2017 report rating the UK third globally for new investment in renewables last year, up from fourth in 2015. We believe that Contracts for Difference (CfD) is the best way to provide the UK with affordable and reliable energy as we move towards a low carbon economy. We of course welcome continued investments, which will help us meet this goal, and I was very pleased to see the opening of the very first subsidy-free solar farm in September this year near Flitwick in Bedfordshire. The CfD system is bearing fruit for other technologies as well, and technologies such as offshore wind are now on their way to being subsidy-free.

The next CfD auction is planned for spring 2019. How can we reduce costs and increase business confidence even further? We are confident that we are continuing to create a favourable business environment for clean growth. The growth of the renewables sector has been a real UK success story. Since 1990 our carbon emissions have fallen, while our national income has risen faster and further per person than any other nation in the G7. The latest figures verified by National Grid indicate that last year was the greenest year ever, with almost 52% of electricity generation from low carbon sources between June and September. We now have the biggest installed offshore wind capacity in the world, and the cost of new offshore wind is tumbling thanks to government support. The UK is a world leader in clean growth and we have invested more than £52bn in renewable energy in the UK since 2010. Our competitive approach has driven down prices for example offshore wind cleared at £58/MWh in 2022-23 – a reduction of over half since the first CfD auction in 2015. We are also providing support for innovation in the offshore renewables sector through the Offshore Renewable Energy Catapult. How can UK suppliers leverage their expertise to become competitive in emerging offshore markets and indeed the global marketplace? The UK is a leader in clean growth with more than 430,000 jobs in low carbon businesses and global supply chains. There is a huge economic opportunity from clean growth, and this is something that we’re looking to capitalise on at home and abroad. An estimated £10tn of public and private investment in the global energy sector alone will be required between 2015 and 2030 if the signatories to the Paris Agreement are to meet their national targets. It has been estimated that UK legal and finance advice was behind a third of new clean energy projects globally between 2007 and 2012. What is the UK’s response following Donald Trump’s announcement to pull the US out of the Paris Climate Agreement? The United Nations annual climate change conference, held in Bonn in November 2017, represented a special moment for global climate action and there remains a real momentum to deliver the commitments of the Paris Agreement despite the disappointing actions taken by President Trump. We are also tapping into a real appetite for new initiatives such as the Powering Past Coal Alliance, a global coalition of businesses, countries and cities, committed to ending unabated coal power, launched in Bonn by Climate Change Minister Claire Perry with her Canadian counterpart, Catherine McKenna. Of course, we continue to work with the US as climate change is a global challenge and requires a global response.

We recognise the potential for energy storage… it is a key part of the transition to a smarter and more flexible energy system

Clean Growth Strategy The government is investing over £2.5bn in low carbon innovation, including: £20m for a clean tech investment fund £162m in research and innovation in business energy, resource and process efficiency £841m for low carbon transport technology £265m for smart energy systems

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U P DAT E S 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

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

Worldwide business support

About the EIC 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

Enabling members to expand into markets across the globe

Market insight

Helping members to track global energy projects and UK assets Our projects database, EICDataStream, provides extensive information on more than 7,500 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 newly launched operations and maintenance database, EICAssetMap, puts the details of every major UK energy asset at your fingertips.

High-profile international events Connecting members with buyers and partners

The EIC hosts flagship industry events that bring together UK 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 introduce

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 hot-desking, 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.

From the EIC News and events

EIC Country Report: Indonesia Formed by more than 18,000 islands populated by over 263 million people producing South East Asia’s highest GDP, Indonesia is a country of huge numbers, and its energy industry is no different Its 2016–25 Electricity Supply Business Plan calls for 80.5GW of power plants by 2025 at a cost of at least US$110bn, while offshore over 250 of its rigs are coming to the end of their lives and will need to be decommissioned. Across all of its energy sectors, the Indonesia government is looking for foreign investment, expertise and experience. As the country's energy industry is set to take off, make sure you know where the opportunities are and how to access them – by purchasing this report, you’ll find out: D etails on the major active and future projects across all energy sectors S tate-owned oil and gas giant Pertamina’s supply chain requirements

W ho the international oil and gas companies in Indonesia are, their location and what projects they’re working on A bout the key local contractors and what products and services they need L ocal content requirements R outes to setting up a company/office in the country EIC Country Reports are available free of charge to EIC members and for purchase (£195 + VAT each) by non-EIC members. Please contact info@the-eic.com for more information and to buy your copy.

E REN POW R AVANOW T ILAB LE

The EIC turns 75! In March the EIC reaches the grand old age of 75, making us one of the oldest trade associations not just in the UK but the whole world We’ll be carrying out lots of fun activities throughout the year to celebrate this milestone, starting with a members’ reception at the House of Lords in March. For more information on this and all the other actives we have planned please visit: www. the-eic.com/Events/ FullEventsDiary.aspx

Proceeds from our 75th anniversary events will go to two very worthy causes: Cancer Research UK and The Ocean Cleanup. It’s been an incredible journey for the EIC and its members, starting way back in 1943 when 13 companies met in London to form the Council of British Manufacturers of Petroleum

Equipment, as we were known then. Since then we’ve expanded to more than 650 member companies who cover the full range of energy sectors. From the very beginning our mission has been to support our companies, large and small, to maximise business opportunities, at home and abroad.

Looking ahead, we’ll continue to adapt to the changing markets, doing everything we can to ensure a bright future for all our members.

www.the-eic.com | energyfocus

From the EIC News and events

EVENTS COMING UP

Overseas delegation to Saudi Arabia When: 4–8 March 2018 Why attend? The GCC’s largest economy, Saudi Arabia, is home to the world’s biggest oil and gas company, Saudi Aramco, which currently has a staggering US$200bn worth of current and future oil and gas projects on its books. The opportunities are certainly there. But with the In-Kingdom Value Add programme now in full swing, to be in the running to win business your company has to be there too. Launched at the end of 2015, the programme is designed to encourage investment in the Kingdom. Suppliers need to

be willing to establish manufacturing bases in the country, add value to the local supply chain and employ Saudis. However, setting up shop in a new country is a daunting challenge, requiring not just a lot of planning but also the right connections. Sign up for our delegation and we’ll sort out all the logistics for you, making sure you’re in the right place to meet the right people. For more information or to book your place, visit: www.the-eic.com/ Events/OverseasDelegations/ OverseasDelegationtoSaudiArabia.aspx

EIC Connect Oil, Gas & Beyond

When: 17 April 2018 Where: Dusit Thani Hotel, Abu Dhabi, UAE Why attend? Our flagship EIC Connect Oil, Gas & Beyond conference and exhibition returns to Abu Dhabi. Last year’s edition made worldwide headlines with the opening address being provided by the UAE Minister of Energy, His Excellency Suhail Al Mazrouei, whom we hope to welcome again in 2018. As well as the Minister, we’ve also invited all the key regional players, including ADNOC, BP and Shell, to provide updates on their projects and supplier requirements. The participating operators and contractors will also be taking part in private one-to-one meetings with delegates to discuss their procurement procedures and how they can work together on upcoming developments. An equally important part of the event is its exhibition, which attracts procurement specialists from around the Gulf region. If you’re looking to make 2018 the year that your company finally breaks into the lucrative Middle East market, then EIC Connect Oil, Gas & Beyond is anevent you can’t afford to miss. Delegate places and stands are limited – don’t miss this opportunity to make your mark on the Middle East, book now at: www.the-eic. com/EICConnect/OilGasUAE.aspx

Technical workshops Technical workshops are hosted by EIC member companies at their manufacturing premises and often include a site tour. Combining theory and practical learning, these workshops benefit both buyers and suppliers. You’ll get a good understanding of the equipment you may be procuring and be able to recognise how a product relates to other devices. Gain recognition for your knowledge, understand your customers’ needs and develop new business contacts. For more information on these and other EIC training courses, please visit: www.the-eic.com/Training/AboutEICTraining.aspx

An Introduction to Centrifugal Compressors, Siemens

An Introduction to Electric Motors, ATB Laurence Scott

An Introduction to Centrifugal Pump Design and Manufacture, SPP Pumps

An Introduction to Energy from Waste, Lakeside Energy from Waste

An Introduction to Control Valves, Severn Glocon

An Introduction to Gas Turbines, Siemens

An Introduction to Pipe Supports, Carpenter & Paterson

An Introduction to Reciprocating Compressors, Siemens

An Introduction to Steam and Condensate Systems, Spirax Sarco

www.the-eic.com | energyfocus

From the EIC Members’ comment

The

BIG question

How can new technologies and digitalisation benefit the energy industry?

As the energy industry evolves to meet the needs of the 21st century, one thing is clear: digitalisation will be everywhere. But is the industry embracing the digital revolution? Energy Focus puts the big question to four members

Chris Stones Sales Director at Servelec Controls The history of Servelec Controls’ remote operations solution goes back to 2006, when a helicopter transporting seven support workers to an offshore gas platform crashed, tragically killing all those on board. This led us to ask, ‘How can we use technology to improve safety and minimise manned interventions?’ With our client Centrica, we began developing a solution to simplify the topside processes on offshore gas platforms and, through the use of modern technology, to remotely operate platforms – including restarting production following an emergency shutdown – from the safety of an onshore control centre. The main driver was to improve safety by reducing the dependency on helicopterbased manned interventions. As investigations progressed, many potential ancillary benefits presented themselves, including a significant reduction in operating expenditure and extending the operating life of the gas field in question. In 2017, we successfully secured two contracts to provide its remote operations solution to Centrica’s DP6 and DP8 offshore gas platforms in Morecambe Bay. Following

14 energyfocus | www.the-eic.com

completion, Centrica will be able to monitor the assets from onshore through remote operation and automation of production. This will help Centrica extend the life of the assets, reduce costs and increase efficiency as well as significantly reduce the associated safety risk of manned interventions to the platforms.

Servelec Controls is one of the largest independent system integrators, established with many of the leading automation equipment manufacturers worldwide. It specialises in industrial control, safety and real-time information systems delivering full turnkey engineering solutions and is an industry leader in the design and implementation of functional safety systems.

Dr Charlotte Richardson Product Development Manager at S3 ID In a crisis, improving speed and accuracy can save lives. Manual paper-based mustering systems have limitations: muster information is only available locally at each muster station, and can be easily compromised in an emergency situation. S3 ID’s electronic mustering solutions enable everyone’s location to be available at all muster points and control room workstations

automatically, saving time and reducing errors. We have developed our electronic muster stations to include full muster list displays with automatic or user-confirmed muster. Real-time display of muster counts and a ‘missing’ list greatly improve the efficiency of the muster and evacuation process. Another technological development includes the longer-range zonal location system that updates the location of personnel on to a central server, as they walk from zone to zone. It provides enhanced post-incident information to rescue services by highlighting the last known location of missing personnel. This is particularly useful for large sites. Future digitalisation and software developments at S3 ID include improvements to the graphical user interface (i.e. the human-computer interface) to enhance interaction with the mustering, tracking and access control information. S3 ID continues to invest significant resources into maximising technological developments to reduce costs and improve safety and efficiency for our customers.

S3 ID Ltd is a leading international provider of electronic ATEX/IECEx certified personnel safety and security systems to the oil, gas and energy industries that operate both onshore and offshore. Solutions range from simple Personnel On Board or On Site (POB/POS), to full mustering and access control systems for use in hazardous areas.

Members’ comment: From the EIC

how we will all need to collaborate to deliver the benefits of this disruptive change. In my opinion, collaboration is the new starting point for businesses to grasp this revolution. Whether it’s with clients, academia, or partner organisations such as the EIC, we need to recognise that we can’t individually be experts and must collaborate to innovate and drive the success of this change. One thought to leave with you: revolutions, it’s said, share a common characteristic. Seemingly impossible at the beginning, they appear inevitable after the event.

Aymeric Sarrazin Martin Welsh Head of Controls and Digitalisation at Siemens Power Generation Services Digitalisation is transforming all areas of our lives. We can get a taxi by tapping our phone or find the answer to just about any question right at our fingertips. Siemens, building on more than 20 years of collecting and analysing data as part of its diagnostic and monitoring services, is deploying projects and devoting significant resources to unlock the full potential of this digital transformation in the power generation industry. It's not just about advanced sensors, big data and powerful software. To truly unlock the vast potential of digital services, those of us on both sides of the service contract – original equipment manufacturers and owners/operators – will have to evolve our thinking about what constitutes ‘service’. Service still includes performing on-site maintenance, but now, with digital services, Siemens is complementing this traditional approach with an advanced performancefocused service and maintenance model. By combining technology with the knowledge and experience of the Siemens team, power plant operators and energy generators are offered more options at less risk, with a flexible approach to managing their assets in a way that works best for them. Our Digital Services for Energy leverage big data to help our customers optimise the performance of their energy assets, enabling them to lower operation and maintenance costs, reduce failure rate and operate plants that achieve the highest return on investment.

Managing Director at Booth Welsh As Booth Welsh has evolved, I have seen many significant changes to the technology deployed across the various sectors in which we operate. The Fourth Industrial Revolution and its pillars of automation, big data, systems integration and the Internet of Things are all developing at warp speed, and will change how we work and live. Imagine if all the pillars could talk to each other and the impact that would make. Think about them physically manufacturing things, diagnosing problems, self-improving and self-learning. Impressed? It is happening now. Most of the benefits are there to be measured: cost, quality, speed, but the biggest change for me as a business leader is

TOMORROW’S WORLD

What digital technologies will upstream O&G companies be investing in? IoT

Mobile devices 55.6%

Artificial intelligence/ machine learning

40.4%

28.9%

18.6%

40.7%

31.1% Cloud 45.7%

High-performance computing

Blockchain

32.9%

40.1%

11.5%

34.8%

24.2%

Big data/analytics 42.9% 46%

Wearable technology 18.6% 24.5%

Collaboration and social tools 34.2%

Siemens AG has stood for engineering excellence, innovation, quality and reliability for 170 years. It is active in more than 200 countries, focusing on electrification, automation and digitalisation. It is a leading supplier of efficient power generation and power transmission solutions and a pioneer in infrastructure solutions as well as automation, drive and software solutions.

Booth Welsh is an engineering technology business supplying services to the process industries, covering many sectors including O&G, chemicals and nuclear. A supplier of innovative solutions since 1989, the company has accumulated a great deal of knowledge, experience and credibility for its clients, many of which it has worked with for over 25 years.

28.6%

Mixed reality 10.9% 22%

Robotic and drones 16.5% 29.8%

Key Today Over the next 3-5 years Source: Accenture Consulting 2017 Upstream Oil and Gas Digital Trends Survey

www.the-eic.com | energyfocus

Special report Digitalisation

What does digital mean for the future of energy?

Digitalisation of the energy sector is gathering pace, improving asset performance and cutting running costs, writes Jeremy Bowden

oth power generation and, especially, upstream oil and gas have been slow to appreciate the potential of digital technology. But now it is suddenly everywhere, and making a major impact. Digitalisation, and the subsequent analysis of data, is helping achieve sharp cost reductions through the optimisation of oil and gas production and field development, while it also enables predictive maintenance, which can result in

16 energyfocus | www.the-eic.com

zero downtime for energy installations – from offshore wind farms to gas pipelines. Digitalisation involves the conversion of text, pictures or sound into a digital form that can be processed and analysed by a computer. Increased use of renewables, resiliency issues and sustainability concerns are just a few of the drivers behind the power sector’s digitalisation, which is progressing from the generating sets to the grid, and on into customers’ homes via smart meters. In the case of oil and gas, the weak oil price has

forced the industry to critically evaluate spending, and digitalisation has proved itself to be an important factor in driving down costs in the North Sea and elsewhere. Globally, annual offshore spending on digitalisation in the oil and gas sector is expected to reach US$17.8bn by 2022, and overall – including onshore and shale – the digital oilfield market could exceed US$30bn by 2020. But these spending figures are trivial compared to the potential upside. According to a recent report from the World

Digitalisation: Special report

Technologies for digitalisation Existing technologies to aid digitalisation

Emerging digitalisation technologies

Batteries Behind the meter generation Cloud storage Big data Home energy management Smart grid Demand reponses Electric vehicles

Machine learning and AI Distributed energy resource management system Internet of Things Blockchain Virtual power plants Smart data Edge processing Cyber security Source: Bloomberg New Energy Finance

IMAGES: GETTY/ISTOCK

Libraries and secure data

Economic Forum, a full digital transformation in the oil and gas sector could eventually unlock about US$1.6tn of value globally – while Oxford Economics puts the added value at US$816bn or 0.8% of global GDP by 2025. Similarly, in another report last year, the World Economic Forum estimated that the power sector could capture US$1.3tn of value from digitalisation between 2016 and 2025. Regarding oil and gas, the additional value comes from the optimisation of reservoir, well and facility development and performance, based on analysis of data from fully digitised systems. Further value is realised in both sectors by using virtual models generated from the data, which enables testing and assessing of the lowest cost performance and development options. Models can also be used to predict maintenance, cutting unplanned outages,

It’s not just your own data that is available in the new digital world. Much of the data that's not considered sensitive is accumulated by third parties and can be offered to the wider industry. ‘Cognitive learning can take in mistakes from all 450 platforms in the North Sea. We can all learn from each other and all the other rigs worldwide too. When something happens, all other installations learn from it instantly – in the same way that Google search learns every day from every search,’ said Gordon. ‘It’s now possible to turn data warehouses into libraries, which can be a relevant source for many people, helped by automated systems,’ he added. Mr Namie said the flow of data needed to be handled carefully: ‘An oil company with rigs pulling in terabytes of data might not want to send it all back to the data centre – some needs to be kept local and processed at the edge. Some can be shared with other stakeholders or third parties. As data is moved around to get it to the right applications at the right time, there is also a necessity to enforce policies around data ownership, privacy and cyber security.’

while operational lessons learnt can easily be shared for mutual benefit.

North Sea retrofit In the North Sea, digitalisation has contributed to recent sharp cost-cutting, and is making development of brownfield projects much easier, as options can easily be evaluated using accurate modelling. ‘Digitalisation of industrial processes have undoubtedly contributed to the 40% cost reductions in the North Sea since the oil price downturn,’ said Graeme Gordon, CEO of IFB and head of Scotland’s digital federation, ScotlandIS. However, with most of the assets already in place the job is not straightforward and involves a lot of retrofitting to unsuitable old equipment. ‘We are in a brownfield www.the-eic.com | energyfocus

Special report: Digitalisation

environment, so there are few fully fledged digital oil fields. An exception is Maersk’s Culzean platform, which is a relatively advanced digital platform that can collect and flow terabytes of data on and off the platform. By introducing core infrastructure upfront, as they have done, operating costs can be reduced by US$10m per year.’ Once the data is collected, it must be decided which bits are useful. Gordon said: ‘The average [North Sea] oil rig now produces about one terabyte of data a day. Around 90% of that is read-only, and is irrelevant so just passes through – it’s the 10% that is significant that you want. Then you turn that into intelligence using data analytics.’ He said the closest comparison to oil and gas was the space industry: ‘Space is most like oil and gas, as it’s very high risk when it goes wrong, plus long lead times, hostile environments – so everything needs to be checked in the background.’ For example, digitalisation can separately analyse production and choke points at hundreds of wells, accurately disaggregating production data so that conditions can be adjusted to optimise output at each well – increasing asset production efficiency in existing oilfields as a result. In a fully ‘connected enterprise’, assets can be monitored and optimised from anywhere in real time. Phil Murray of Petrotechnics said collecting data from oil and gas installations was quite a messy and complicated process compared with, say, airline ticket booking, where all the parameters are clearly identifiable and laid

A full digital transformation in the oil and gas sector could eventually unlock about US$1.6tn of value globally 18 energyfocus | www.the-eic.com

companies – case studies will become available, reducing risk and allowing North Sea operations to become ‘fast followers’, he added.

Creating value from data

Nuclear digitalisation Digitalisation of a nuclear power plant involves installation of sensors, automation and analytics, enabling full lifecycle management. GE estimates its clients in the nuclear industry are now saving about US$2,000 per MWh in lower operation and maintenance costs because of digitalisation, helped by no unplanned downtime. In terms of the thermal performance of plants, GE is using big data analytics and closed-loop analytics. ‘In nuclear we’ve been focusing a lot on digital twins and how to get advantage from assets where there's criticality; how to keep those up and running, and how to get early warnings,’ said Sanjay Chopra, global leader, energy, at GE Digital. The earlier a warning is flagged up, the earlier you can start planning for the outage and ensure there is no unplanned downtime. GE said it was looking at how to leverage data science and the cloud further to do ‘high-scale analytics’; creating interactive models to understand how generating sets are operating, and what can be done to optimise performance and minimise safety risks.

out. Information on the flows and pressures of an oil field and wells, are far more complex and variable, making it trickier to systematically digitise. However, while each field is unique, common approaches can be adapted. He said the biggest moves in digitalisation were not happening in the North Sea any more, but had moved downstream or overseas. ‘In the North Sea there is the drive and desire, but also a fear of being first, and disrupting production; there’s not much upside… Because it is a mature province, additional volumes are relatively small, there’s more complexity due to unsuitable older equipment – and more downside due to the added risk of disrupting production.’ As techniques are rolled out elsewhere – often by UK

The real test is how much useful information can be extracted from the data. Macario Namie, head of Internet of Things Strategy at Cisco, said, ‘The pace of change in the oil and gas sector has never been faster and to thrive, companies must become more efficient… And like most industries, the oil and gas sector is creating a huge amount of data. In order to derive value from all the connected things, this data must be extracted from its disparate sources and moved to applications that create business value.’ One way of creating value with the data is machine learning – a process in which software is used to search data, detect patterns and assess the likelihood of future failures. The software uses algorithms to monitor important equipment, and predict failures so preventive maintenance can be carried out. The data can also be used to create a virtual 'twin' that can be used to simulate different field development options, helping work out the cheapest and most effective course of action. For example, the degradation of wind turbine blades can be modelled using data from sensors that can pick up the slightest vibrations from a loose bearing or similar. You can then use the model to predict failure and intervene. Mr Murray said harnessing the data to make better decisions was only possible when data was taken from different silos and converted into a ‘common currency’, from which tailored content could be supplied to different individuals based on their role. Effective use also requires a culture change throughout organisations, or a ‘human retrofit’ as Murray put it. This then allows operators to see where the risk is. While cyber security concerns may be a rising consequence of the digital transition, utilising advanced analytics and simulation tools to optimise assets and operations has become an important factor in driving efficiency in today’s energy sector. Further digital oilfield advances, as well as an extension of digitalisation in areas like grid balancing and retail, are expected to keep the savings coming for some time to come.

Feature Cyber security

cyber risks: Managing

A top priority for energy companies

As cyber risks rise to the top of the corporate agenda, Nicholas Newman says firms are taking a proactive approach to cyber security

ike any other industry, the energy sector is grappling with a growing number of evolving cyber security threats. For many, Duncan Page, cyber security specialist at PWC observes, ‘it’s a game of catch-up, as they seek to protect vital command, control and distribution systems from increasingly professional cyber criminals able to threaten the integrity

of pipelines, power grids and energy storage facilities.’ The big fear is that a cyber attack could cripple a country’s nuclear plants, energy infrastructure or vital operations.

Recent major incidents Cyber criminals may attack any part of an energy company’s value chain that is connected to the Internet. For example, an attack last summer caused a three-hour loss www.the-eic.com | energyfocus

Feature: Cyber security

of power for 225,000 customers in western Ukraine. The attackers overwrote a utility’s firmware on critical devices and, although on-site technicians manually overrode the circuit breaks and restored power, two months later the utility’s control centres were still not operational. Commenting on the incident, Cliff Wilson, Associate Partner at IBM Security, UK & Ireland says: ‘This was likely a training exercise to refine techniques and explore just what could be done.’ In Finland, water, heating and ventilation systems were temporarily frozen by a series of cyber attacks. Across the Atlantic, a ransomware infection forced a Michigan utility company to pay US$25,000 to regain access to its critical accounting and email servers.

Forms of attack The three most common forms of attack are phishing emails, compromised USB sticks and viruses. In 2016, according to IBM, 60% of cyber attacks on energy companies and utilities were external. The remainder arose internally with the majority (76%) generated by disgruntled employees, while the remaining 24% were inadvertent mistakes made by workers accidentally opening malicious links or attachments of an email. At an organisational level, Wilson says, ‘the main threat comes from the increasing connectivity between the various aspects of a company’s operations, including the linking-up of industrial control systems to major back-end business systems, since this gives greater opportunities for hacking to take place.’ The arrival of the cloud, while providing big benefits in the way data is used, shared and processed, also introduces several potential cyber vulnerabilities, including illegal access to your data, introduction of viruses and data loss, according to the Cloud Security Alliance. Corporate clouds can be just as vulnerable to data breaches as traditional networks with the usual consequences including lawsuits, fines and damage to the company’s reputation.

22 energyfocus | www.the-eic.com

The central lesson for energy companies is the need for a culture of security, constant vigilance and updating of protection Although reputable cloud services employ layers of security protocols, it is nevertheless up to firms to proactively protect data held in the cloud. There have been reports of hackers gaining access to cloud data centres and wiping all the data clean. Therefore, it is recommended that companies distribute applications across several zones and back-up data using off-site storage when possible. Compromised credentials, e.g. not creating secure passwords, also increase the risk of attack. The use of strong passwords, setting the right user roles and creating processes for identifying critical changes made by other users are essential protective measures. Granting third parties access to your cloud increases the likelihood of hackers making away with confidential information on customers and other parties. To protect themselves, companies need to install threat modelling applications and systems into the development lifecycle and undertake regular code reviews to highlight any gaps in security.

protection challenging. As Page acknowledges, ‘Different operations, companies and sectors within the energy industry are implementing improvements in cyber security at different speeds.’ There is also, typically, an ongoing reluctance to cooperate between corporate IT departments and operational technology departments, due to long-term fears of poaching or redundancy caused by the introduction of Internet technologies into the operational technology environment, observes Wilson. While off-the-shelf cyber security protection is available for a company’s general operations, tailored solutions for specific operations cost money and take time. Old as well as new technology is vulnerable to different degrees. The former, Page reflects, ‘is not secure by design and can be difficult to protect because of its obsolete characteristics.’ Newer technology, because it is based on ever-present Internet platforms, is much more connected and therefore more vulnerable. Meanwhile, the smart infrastructure coming in to support the low carbon future is even more connected and more complex, opening new potential avenues of attack, according to Page. However, digitalisation now being adopted by many in the energy sector should make it easier in the future to apply the latest cyber security standards across operations. In the meantime, for the large national energy company as well as the multinational, ensuring company-wide compliance is a complex organisational and operational task, so much so, that ‘energy and utility companies are coming to IBM to help them to identify their complex cyber security compliance requirements,’ says Wilson.

Industry difficulties in implementing cyber security measures

In-house steps to tackle cyber threats

Many energy companies operate globally. Whether covering the whole world or just across neighbouring borders, the sheer scale and variety of operations of a multinational energy company makes cyber security

Increasingly, organisations are taking five steps to help protect themselves, beginning with a comprehensive security review to understand current weaknesses and identify measures needed to comply with requirements set out in

Cyber security: Feature

SMART ENERGY AND STRENGTHENING CYBER SECURITY

Could cyber concerns stall uptake of smart energy technology and low carbon schemes?

With around a third of industrials and over a fifth of commercial organisations planning to spend more than £1m on smart energy technology, the need for utilities – and smart technology suppliers in general – to get their cyber security in order is vital.

Trust

Cyber

Smart technology

Security of supply

of respondents plan to spend over £500k on smart energy technologies within the next five years

over the next five years are taking measures to improve their security of supply through onsite generation and storage

61% 57% 1/4 58% the large majority of businesses trust their energy supplier

said they would leave their supplier if they suffered a cyber security breach

55% 65% 73%

trust energy suppliers to install smart energy technology

of the respondents are seriously concerned about cyber risk

Source: PwC B2B Energy Survey, May 2017 (research included responses from more than 500 UK businesses)

of those who have invested in smart technology have seen improvement in the running of their business

42% of businesses are disengaged with off-grid options

EU and US regulations In December 2015, the EU passed two significant data and IT protection directives. The General Data Protection Regulation shifts the balance of power away from organisations that collect, analyse and use data towards the citizen. More pertinent is the Network and Information Security Directive (NISD), which focuses on the protection of IT systems used by those companies designated as European operators of essential services, including energy, transport, banking and healthcare firms, by imposing new incident reporting obligations. The security requirements of the NISD, effective from May 2018, include technical measures that manage the risks of cyber security breaches in a preventative manner. For example, both digital service providers and operators of essential services must provide sufficient information to enable an in-depth assessment of their information systems and security by the authorities. In addition, the company’s computer security team must be notified of all significant incidents. It will assess the threat according to criteria such as the numbers of affected users, its length and geographical spread. In contrast to the prescriptive approach of the EU, North America’s cyber security regulations simply encompass key principles on information security without specifying any particular cyber security measures, beyond saying such measures must achieve a reasonable level of security regulations.

IMAGES: ALAMY

Lessons learnt national cyber security legislation. Having dealt with the security software, a security awareness and education programme needs to be rolled out to all staff, from the top to the bottom, including temporary employees. This needs to be accompanied by implementing watertight protocols to regulate use of mobile devices and cloud services. Having set out the policies and protocols to all staff, enforcement of compliance is the

next step. This involves introducing effective advanced security technologies which, crucially, should be easy to use, since difficult to use systems will result in many staff ignoring them. Lastly, regular training and evaluation sessions for all staff in order to maintain best practices alongside regular testing of existing cyber security systems against new threats is essential to maintain in-house security and protect against external threats.

The central lesson for energy companies, be it a self-contained nuclear power plant, a national utility company or a vertically integrated multinational oil company is the need for a culture of security, constant vigilance and updating of protection. Companies will need to continuously educate and train staff to instil a ‘proactive cyber security culture and evolve to meet the ever-changing challenges cyber criminals bring,’ says Wilson. www.the-eic.com | energyfocus

Oil and Gas Offshore digital

The IoT revolution and new communication protocols offer huge opportunities for offshore platforms, writes Ian Phillips at the Oil & Gas Innovation Centre

n the last 12 months, the potential of the Internet of Things (IoT) to benefit the oil and gas industry has been accelerated with the arrival of 4G technology offshore. With the agility to adopt new technologies, and the ability to collect and assess big data and communicate offshore analysis and results in real time, 4G is bridging the last few metres from control room to the live plant. IoT devices are now a more accessible and viable resource to develop alternative solutions for industry challenges. At the Oil & Gas Innovation Centre (OGIC), we are seeing a marked increase in enquiries from transformative technology driven companies requiring funding and support to develop new IoT enabled technologies for the sector. The industry is clearly trying to capitalise on the IoT revolution and a range of low-power communication technologies for offshore platforms are already being utilised. Many of these IoT technologies are proving effective at alerting operators to potential issues before they become critical to operations, by enabling continuous real-time

monitoring of offshore assets, such as structural steelwork, complex pipework systems and previously ‘dumb’ process equipment.

Seizing the 4G opportunity With the advancement of 4G offshore, large volumes of data collected across operational activities can be transferred from offshore to onshore, enabling more robust decision-making and more effective and timely action plans. This is helping to reduce the potential for complete failure and minimising the risk of costly downtime. Accordingly, operators can achieve better control of their activities and costs, and potentially even prolong an asset’s lifecycle. Indeed, as highlighted in McKinsey & Company’s August 2016 report, The Next Frontier for Digital Technologies in Oil and Gas, CAPEX could be reduced by as much as 20% and upstream operating costs could be cut by 3 to 5%. The research indicates that reduced CAPEX and OPEX will be achieved through the effective use of new digital technologies, which can offer improved data and

The Internet of Things goes

24 energyfocus | www.the-eic.com

unprecedented insights into end-toend operations. This will provide the necessary intelligence to support better strategic decisions and enable increased agility to respond to identified issues, as well as opportunities for improved performance.

Putting IoT to work Sensor technology has been a key feature of IoT-enabled solutions for the sector. One of our recent collaborative projects involved a smart infrastructure business that has developed a technology incorporating state-of-the-art visual light and environment sensors that collect data on the patterns of fixed and movable assets. Using predictive analytics, this data can be converted into actionable knowledge that can increase asset utilisation, reducing energy and maintenance costs. Another OGIC-facilitated collaboration with RAB Microfluidics and the University of Aberdeen shows how IoT technology can help to improve processes and drive optimal efficiency . RAB Microfluidics has developed

Offshore digital: Oil and Gas

cutting-edge ‘lab-on-a-chip’ technology with the ability to deliver oil conditioning monitoring (OCM) chemical analysis 1,000 times faster than current OCM techniques. In addition, this technology is 10 times cheaper to apply, and offers continuous monitoring in real-time. This allows for earlier problem diagnosis, faster decisionmaking and enhanced reliability, resulting in greater efficiency and cost savings. The breadth of technologies entering the market gives a strong indication of the direction that the industry is moving, and shows the real possibilities of IoT to solve industry challenges and improve current operations – most notably offshore. Undoubtedly, support for IoT is being driven by the benefits that these technologies can provide, such as cost savings through more efficient processes, and the ability to rapidly collect, store and analyse vast amounts of operational information for real-time decision-making.

Bringing the new era to the North Sea While there is a raft of new technologies becoming available for the sector, much of the North Sea is still hard wired and pre-Internet. The current infrastructure of the North Sea has posed challenges for those

WHAT IS…? Internet of Things (IoT)

At its core, IoT is simple: it’s about connecting machines, devices and objects (with embedded sensors) to the Internet. The IoT is a giant network of connected things and people – all of which are able to collect and exchange data about the way they are used and about the environment around them.

4G cellular connectivity is being used to put the IoT to work. The fourth generation of mobile phone wireless technology, 4G builds on the existing 3G mobile technology but does everything at a much faster speed. With a ceaseless flow of wireless traffic, connecting the IoT requires anywhere, anytime networking that is completely flexible and scalable. Using 4G for IoT deployments delivers this, while also keeping the enterprise network secure.

Smart infrastructure

Smart infrastructure is the result of combining physical infrastructure with digital technology, providing improved information to enable better decision making, faster and cheaper. Smart infrastructure will allow owners and operators to increase capacity, efficiency, reliability and resilience.

keen to apply IoT to their operations. The arrival of 4G infrastructure offshore changes this dramatically. In addition, due to the age of the North Sea, practical challenges exist, such as who owns the collective big data; what skills are needed to turn data into information; and how securely is data being stored between organisations. Success with IoT will require a consideration of the optimal balance between technology and humans. With the almost real-time transfer of data between offshore and onshore, all aspects of the business will need to become more integrated and investment in training to maximise the benefits of digitalisation is essential. It is also vital to have an understanding of what data needs to be collected, rather than collecting all data because the technology provides this capability. Revolutionary technologies are already creating value for the sector. The big wins will come from those who are open to thinking differently about technology’s role in business operations and are willing to utilise IoT to drive the industry forward. By Ian Phillips, Chief Executive Officer, Oil & Gas Innovation Centre

www.the-eic.com | energyfocus

Innovative solutions to age old problems The growth in global demand for energy means ever greater physical and performance demands are being placed on the components used to gather and process energy. Managing this challenge in a cost-effective way requires innovative technology solutions. Actuation systems have been around since Roman times, and yet play a key role in 21st century industries like oil and gas extraction. Today, actuators need to deliver exceptional precision and reliability in extremes of hot and cold pressure and in the presence of corrosive fluids. Our actuators control the performance of valves which may be very large and require significant force to open or close them. An actuation failure can have a heavy cost in both safety and financial losses. A plant stoppage can equate to a financial loss in the region of US$1 million + per day! These more demanding operating conditions and pressures require actuation systems where components start or cease operating more rapidly. Innovations such as electronic digital positioners, flow amplifiers and rapid positioning systems have been developed to deliver the required performance.

severe service valves, which take the biggest strain in terms of stroking and wear of packing during their lifetime. Current techniques for reducing fugitive emissions are based on periodic checks with ‘sniffing sensors’, infrared cameras and ultrasonic leak detection – but they have limitations. Once a leak has been identified, the normal course of action is to shut down the plant for remedial action. Given the expense and disruption of a shutdown, operators have focused on maximising the life of packing seals, or applying a predictive maintenance regime. In response to the limitations of current techniques, IMI Critical has developed intelligent logic systems to manage the problem. Typically, a mass microflowmeter with intelligent logic continuously monitors the performance of control valve packings by

measuring the effective leakage passing through the primary packing seals of the valve. If the values exceed preset limits, the system automatically closes the leak port valve to shut off the vent port, and the sealing operation automatically switches to the secondary packing. The stem movement, speed and direction are transmitted to the logic unit with the position feedback signal. The logic unit compares the measurement and speed of the valve, thus avoiding false alarms due to fast stroking. The alarm signal can be sent out as a pure contact, or the communication of the packing status to the control room can be carried out via HART, Foundation Fieldbus or Profibus protocols.

Further innovation is being driven by safety – in particular the requirement to meet Safety Integrity Level (SIL) requirements – and include new, even more precise control algorithms for positioners, as well as diagnostic capabilities, and the ability to communicate directly back to control rooms with key process information. Safety is also driving innovation in the field of “fugitive emissions” - the leak of substances into the atmosphere from oil and gas processing plants. These are at best a nuisance and, at worst, can be highly hazardous to both site workers and local residents, especially when the emissions are leaks of odourless gases. According to the European Sealing Association, up to 70% of fugitive emissions from refineries come from leaking valves. This means companies need to actively manage the emissions performance of their valves, particularly

Case Study

Harnessing the collective knowledge, expertise and innovation of the IMI Group of businesses meant that we were able to secure a bespoke solution of valves and actuators to meet the dynamic requirements of China’s coal liquefaction projects. A package of valves and actuators destined for use in Chinese coal liquefaction processes showcased a variety of IMI technologies. IMI Critical Engineering’s IMI Orton business supplied 24” cryogenic butterfly valves while IMI STI provided quarter turn actuators. Also drawing upon technology from IMI Precision Engineering, the project made use of filters and regulators from IMI Norgren in addition to IMI Maxseal partial stroking solenoid valves from Thompson Valves and positioners from IMI STI / IMI Watson Smith.

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Oil and Gas Offshore digital

A smart move for the offshore industry Fraser Graham at Apollo looks at how the industry can use technology to work more intelligently and maximise economic return

sing analytics to drive consumer demand, manage costs and give more accurate forecasting is not new in many industries. Retail, manufacturing and even banking all use analytics to predict and improve business performance. So why is it that the energy industry has been left behind in this? As operators and duty holders continually fight to reduce production costs with ageing assets, surely focus must be placed on cost-effectiveness and safety. This is where technology can really play a part. The industry will comfortably spend millions annually on maintenance activities, using outdated methodology and processes that just do not present a viable, long-term economic model.

From big data to smart data The engineering capability and intelligence of the industry is not in question, but how has the energy community let itself fall so far behind in day-to-day data collection, analysis and management? Big data is a term that I hear on a near daily basis, but how do you utilise the data to increase visibility, knowledge and ultimately help managers to make quicker and better decisions about predictive

28 energyfocus | www.the-eic.com

maintenance across the full lifecycle of anÂ asset? 4G networks and wi-fi are now common place on platforms and smart devices with appropriate zone ratings already exist, so why do we still employ offshore inspectors to collect information on pen and paper, taking the time to type it up in the office, eventually emailing it to someone onshore, who in turn has to dissect that report and then duplicate this data into the corporate system? Nowadays, offshore teams can synchronise work packs to a tablet or smart phone at the start of their shift, collect data as they go and with a touch of a button, upload the information collected within seconds and disseminate it through the onshore integrity teams. The processes and technology exists to remove any additional administration burden and automatically present data collected from the moment it is captured, with increased accuracy and no duplication.

Turn your data into action One question I ask clients, which often is met with shock and surprise is this: â&#x20AC;&#x2DC;If you are not going to use the data you already have, why not save money and stop collecting it?â&#x20AC;&#x2122; The notion of not carrying out any data collection is obviously

ridiculous but the premise of the question is valid. If you are not going to use the information collected to review, plan and predict activity, then why bother? More intelligent risk-based inspection can improve not only safety but efficiencies in the value chain. The correlation of data can be used to spot trends and predict faults, significantly mitigating risk and streamlining operational performance. The technology exists to not only monitor the integrity of an asset onshore but to actually create intelligent inspection routes to maximise inspection time as well as to even measure to within a couple of millimetres the distances

Offshore digital: Oil and Gas

Case study Increasing efficiency offshore The challenge

The client, a floating production, storage and offloading contractor, required an integrated and comprehensive integrity management software solution for its oil and gas operations.

The aims

The client wanted to: 1) Deliver operational efficiencies through digitalising the offshore/on-site workforce. 2) Deliver significantly improved and efficient data management and work flow onshore. 3) Improve the operational efficiency and quality of recording data at worksites through application of mobile and wireless technologies.

The method

After a number of early successful projects involving the migration of integrity data

from legacy and uncontrolled sources, Apollo KnowHow™ was developed in partnership with OGTC. A modern, scalable, cloud-based data management software system, the solution brings significant data management and data quality benefits to engineers and other parties, while looking to future developments.

The impact

Apollo KnowHow™ is a step towards digitalising the offshore worker. With the addition of optional modular add-ons, the new system will enable the distribution of electronic work packs, digital harvesting of integrity data along with real-time reporting of data to the desktop of senior management, integrity managers and engineers, etc. In addition, the ability to present data effectively, involve teams as appropriate, mirror engineering processes, provide

work flow, audit trails, link to other systems (visualisation tools, document management systems, etc.) ensures rapid close-out of anomalies before they become larger problems. Importantly, the design and architecture of KnowHow™ allows it to manage many sources of data effectively, e.g. fabric maintenance work flow, pressure systems, Ex equipment, instrument tubing, trending, risk management, etc. Uniquely, KnowHow™ allows the client an instant view of the integrity of their whole asset in real-time.

The savings

Apollo KnowHow™ has saved the client more than 20% on man-hours in the first campaign. As the client integrates the new data management system into its business, this is set to increase. Financial savings are up to £500,000 per asset, per year.

development and making these solutions affordable and practical. As a more futuristic viewpoint, the advancements in augmented and virtual reality are not only being used for training and development but also for pulling live streaming information from sensors to create an environment onshore that gives engineers fully immersive visibility and interaction with an asset from the comfort of their office. These technologies can already interact with data management systems to allow operators real-time access to information. An issue I am constantly met with is the lack of bed space on an asset. When you also take in the costs incurred from helicopter flights (let alone the safety aspect) and catering, having the ability to perform maintenance tasks and inspection from an onshore office is highly appealing and a real alternative to drive down costs. Performing regular maintenance is a costly necessity, but what if we were smarter about what we inspected and maintained? Predictive maintenance and machine learning can lead to major cost savings and as time goes on, the more information that is gathered, the more accurate the predictive maintenance can be, but only if we use the data.

Maximise your return, go digital

and sizes of space to allow for a survey and in turn engineering and fabrication to be completed, without even visiting the site. The advancement of drone technology and HD CCTV even allow for operators to monitor and inspect equipment and structures from an onshore office, removing the need for a permanent on-site inspection team. Technology is moving forward daily as the drive for cost reduction and innovation continues. With the added focus from governmental-backed bodies such as the Oil & Gas Technology Centre (OGTC), digitalisation and technology have been given the spotlight, supercharging

If you are not going to use the information collected to review, plan and predict activity, then why bother?

It might be premature to suggest the days of paper-based reporting is a thing of the past; however, making the change to one of the various software solutions available can help us move away from outdated strategies and inefficient techniques. The industry needs to continue to move forward and the strategic deployment of one of these systems will allow operators to make quicker and better decisions relating to planning and conducting operations and maintenance offshore which can only increase uptime, safety, efficiency and profit. Appropriate engineering knowledge will always be needed but technology can free up an engineering team’s time to concentrate on what they are good at, engineering. Just imagine if we combine an engineer’s knowledge with technology. That could be really powerful. By Fraser Graham, Business Development Executive, Apollo www.the-eic.com | energyfocus

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Oil and Gas Offshore digital

Drilling down into data Data-driven solutions are improving drilling performance, says James Gavin from Upstream Intelligence, but the full potential for the US oil and gas industry remains untapped

ith increased diagnostic capacities, the oil and gas industry is slowly migrating from a reactive approach to one in which there is better prediction of future events. Predictive maintenance technologies enable a closer look at the performance data coming from the equipment and to identify failure before it occurs, so that preventative maintenance measures can be undertaken, rather than fixing something after it has broken.

Unlocking valuable information One example of predictive analytics arrived in 2016, when US-based National Oilwell Varco unveiled its Rigsentry system, which collects information from the subsea blowout preventer (BOP) control system sensors to monitor cycle, flow, runtime and time-in-service data from equipment components. The subsea equipment undergoes constant analysis to detect any latent failures. This end-to-end predictive solution can foresee operational failures in critical components of subsea BOPs with a prediction horizon of 14 days. Condition-based maintenance is another form of predictive maintenance. In November 2016, GE and Maersk Drilling announced that they were collaborating on a data analytic-driven pilot project aiming to increase Maersk’s drilling vessels’ productivity and reduce maintenance costs by up to 20%. Operational sensor data from critical equipment is

connected to a historian – a specialised server that stores the data needed to build a virtual model of the drilling operation. The sensor data minutely registers how the drilling equipment is behaving and being operated. By building this ‘digital twin’, digital software can then help compare assets to assets and provide access to vessel performance against the ideal state. Big data is translated into clear dashboards with a holistic view of a vessel, which can help operators make more informed decisions. Tim Schwenker, President and CEO of GE’s Marine Solutions, said, ‘With the present period of prolonged energy price instability, we believe data analytics tools provide the right technology that will help the industry going through current downcycle and maintain sustainable growth for the future.’

Growing popularity Condition-based maintenance tools are designed to improve equipment maintenance on offshore rigs and are expected to be adopted more widely across the US oil and gas landscape. More real-time, shore-based control centres would facilitate this uptake. Today, these are mainly operating in a supervisory role, but will likely adopt a more controlling role over time when confidence in the technology develops. The reason for predictive analytics’ growing popularity is simple, says Moray Laing, Chairman of the Society of Petroleum Engineers’ Drilling Systems

Automation Technical Section. ‘If you don’t have accurate sensors, then you need to be able to do some form of probability or understanding of uncertainty in your use of the physics.’ He adds that with predictive analytics, you can understand that uncertainty and quantify it in real time. That enables better decisions to be made. ‘It’s like the old red engine light we used to have in a car. Today, this is enhanced with quantitative information about what the problem is and how many miles you can travel before you need a service. Predictive analytics enables us to take raw unconditioned information and enrich and condition it into information that enables better decisions.’

Overcoming barriers to change The wider potential for digital methods and technologies to transform the performance of the US oil and gas sector is substantial. Predictive analytics are already being deployed to strong effect to enable drilling operations to become far more efficient and better adapted to a lower-for-longer oil price climate. But there are clear obstacles preventing US oil and gas stakeholders making more rapid use of these technologies. The lack of an agreed system covering data ownership, means operators, rig owners, service providers and others are still working on different playing fields. Coordination is necessary, but industry risk aversion is an issue. Efforts are underway to evolve a new modus vivendi that will ensure the US oil and gas sector is leading the pack, in terms of data-driven drilling solutions. The path is clear. Now oil and gas stakeholders in the US can make a start in showing other industries how the barriers to change can be overcome.

The wider potential for digital methods and technologies to transform the performance of the US oil and gas sector is substantial www.the-eic.com | energyfocus

Oil and Gas LNG

The big potential of small-scale LNG

Joanna Martin Ziegenfuss at Berkeley Research Group gives a clear insight into the potential of small-scale LNG and the shape of things to come

he global liquefied natural gas (LNG) market is progressively becoming more flexible and liquid. It is undergoing a structural change driven by the increase in LNG supply, contracts with shorter terms, greater destination flexibility and the growth of LNG spot trading. Furthermore, the advent of the shale revolution and subsequent cheap natural gas in the US has spurred the growth in demand for small volumes of LNG as an alternative fuel to diesel and heavy fuel oil. Early adopters, motivated by the price and environmental advantages relative to oil, have backed LNG as a fuel in markets that range from transportation and high horsepower applications to remote small power generation. Technology innovations have also made it economically feasible for emerging economies to import small to medium volumes of LNG. Can this growth in the trade of small LNG parcels effectively contribute to increased liquidity in the LNG market?

What is small-scale LNG? Small-scale LNG (SSLNG), loosely considered by the LNG industry as liquefaction and regasification terminals with a production capacity smaller than 1m tonnes per year, is a growing market enhancing the distribution downstream of LNG. In terms of traded unit volumes, the SSLNG market ranges from parcels of 0.35m3 for LNG trucks to LNG ISO tanks of 35m3 for delivery to industry, to volumes ranging from ~1,000m3 to 60,000m3 for SSLNG carriers servicing the bunkering and coastal distribution markets to small conventional LNG carriers ranging from ~60,000m3 to

32 energyfocus | www.the-eic.com

160,000m3 servicing floating regasification units (FSRUs) and floating liquefaction units (FLNGs). This broad range of unit volumes and end-market buyers contrast with the large conventional LNG cargoes that range from ~135,000m3 to 260,000m3 and service only the LNG gas-to-power market (see Figure 1). Although the current narrow spread between oil and gas prices has stifled the growth of SSLNG in the US, market developments in the rest of the world have continued to grow driven by resilient oil to gas price margins, technology innovations, as well as environmental and energy diversification policies.

Global growth markets The LNG trucking markets in Europe and China have seen strong growth in recent years. The market in the EU has grown by approximately 300% since 2013, and is projected to reach 400,000 LNG trucks by 2030. The market in China has close to 250,000 LNG trucks on the road and is projected to grow to 700,000 in the next three years. The bunkering market in China is also well developed, with an estimated 19 bunkering pontoons and 23 LNG fuelled vessels in planning. The current number of LNG fuelled ships is estimated at 100 vessels and expected to double in the next two to three years. This growth has led to the development of small-scale liquefaction facilities in China and the US, close to 60 LNG bunkering facilities worldwide and break-bulk facilities at LNG import terminals. The Gate LNG Import Terminal in Rotterdam, for example, has already made break-bulking and truck-loading adjustments to capture new commercial opportunities in the industrial,

bunkering and trucking markets. Many new LNG import and export terminals under development are being designed to offer break-bulk services and truck loading capabilities that will further expand the downstream distribution of LNG.

Unlocking stranded assets In the last four years, the LNG market has also witnessed a strong growth in floating storage FSRUs (from 10 to 24 since 2013) unleashing latent small to medium demand from emerging nations. While individually small volumes, the aggregate demand from FSRUs in 2017 is estimated at 83m tonnes per year based on nameplate capacity (International Gas Union World LNG 2017 Report), roughly equivalent to one tenth of current onshore regasification capacity. Small to medium LNG imports through FSRUs are projected to grow with another 11 vessels on-order targeting mostly emerging importers. Innovations in technology have also driven the development of FLNGs allowing the monetisation of stranded gas previously uneconomical to develop. There are a number of projects on the west coast of Africa (Cameroon, Equatorial Guinea and Mauritania) with anticipated liquefaction capacity in the range of 1–2m tonnes per year. Once in operation, those projects will be delivering LNG cargoes to the market in small to medium LNG carriers. These developments, in addition to increasing uptake of break-bulk services, have also driven the growth in recent years of small LNG carriers.

Future trading mix The growth of SSLNG markets brings additional volumes, a broader diversity of sellers, offtakers and cargo sizes to

MARKET TO WATCH INDONESIA

Indonesia has the potential and the ambition to become Asia's most important small-scale LNG player SSLNG offers significant potential in Indonesia, an archipelagic country of over 18,000 islands, where demand, infrastructure and geography present significant challenges to the distribution of LNG. With isolated consumption centres and a limited national pipeline network outside Sumatra and Java, SSLNG is an attractive solution – especially in the eastern region of Indonesia where the high capital investment cost of constructing extensive gas transmission pipelines is not feasible given the relatively low gas demand. SSLNG offers several key advantages that favour the growth of

the industry in Indonesia. Firstly, it significantly reduces the time needed to get projects up and running, allowing investors more immediate and potentially attractive returns in the medium-term, while reducing uncertainty on project execution due to its plug-and-play nature. The industry is also scalable, meaning operators can easily alter capacity to serve fluctuations in demand. Finally, it offers location flexibility, so it can move to another area when it is no longer needed and can meet demand in areas that were previously unsuited to LNG as a fuel source, such as off-grid power generation on the

the trading mix, which will allow for supply and demand to be paired at smaller tranches. This could effectively impact price elasticity of demand in the global LNG market, as well as liquidity, once sufficient volumes are attained. The recent growth in FSRUs has already demonstrated how an aggregation of relatively small demand volumes managed to absorb some of the LNG surplus on the market in 2016, effectively impacting demand elasticity in the short-term. However, it is too early to foresee how and when this influx of smaller cargoes will effectively impact LNG price and volatility. Effective LNG market liquidity will develop in regional pockets at trading hubs which can cater to anchor power markets as well as the growing small to medium markets and thereby allow the trade of a broader mix of cargo sizes between a diversified range of suppliers and buyers. By Joanna Martin Ziegenfuss, Associate Director Energy, Berkeley Research Group Disclaimer: the opinions expressed herein are those of the individual author, and do not represent the opinions of Berkeley Research Group, LLC or any of its other employees or affiliates.

remote islands of eastern Indonesia. Indonesia received its first floating regasification unit in March 2016 from South Korean firm Gas Entec, which will supply 40m standard cubic feet of gas per day to a 200MW power plant in Bali. More recently, Singaporebased Pavilion Gas and Keppel Offshore & Marine signed a Heads of Agreement with PLN of Indonesia in September 2017 to explore SSLNG in remote areas of western Indonesia. There are, however, several challenges facing Indonesia’s SSLNG plans, with the most prominent being transportation. Companies will either have to break-bulk

cargoes, reducing economies of scale, or use containers which can be shipped by other transportation methods such as rail or road. Furthermore, SSLNG is expected to be more expensive on a MMBtu basis due to the increased operational complexities compared with a typical-sized plant, a factor further exacerbated by the remoteness of some of Indonesia’s islands. More information: If you are interested in Indonesia’s SSLNG market, download the EIC Country Report: Indonesia at www.the-eic.com/Publications/ MarketIntelligenceReports.aspx

FIGURE 1: TRADED LNG UNIT VOLUMES

LNG 170,000m 3*

LNG CARRIER

IMPORT TERMINAL

Break-bulk

Small-scale LNG

1,000-60,000m 3

35m 3

3,000-10,000m 3

0.35m 3

1,000-60,000m 3

35m 3

3,000-10,000m 3

0.35m 3

PIPELINE

SMALL LIQUEFACTION PLANT

135,000m 3*

LNG CARRIER

FSRU

135,000m 3*

FLNG

LNG CARRIER

SMALL IMPORT TERMINAL

Source: Berkeley Research Group. Note: volumes are approximates; *average cargo size

Marine bunkering ISO tanks Small-scale LNG carriers Conventional LNG carriers 0

50,000

100,000

150,000

200,000

250,000

Cubic metres 300,000

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Oil and Gas West Africa

Plenty of optimism in West Africa EIC Upstream Sector Analyst Andrew Scutter looks forward to an upswing in contracting activity offshore West Africa as cost-cutting measures take effect

argely dominated by Nigeria and Angola, West African oil and gas activity has taken off in the last couple of decades, driven particularly by advances in offshore/deepwater technology. The addition of Angola, Equatorial Guinea and Gabon to OPEC within the past decade reflects the increasing importance of the region within the industry. With activity concentrated in deepwater areas, the region has tended to be dominated by supermajors typically working under joint venture or consortia arrangements. However, mid-sized and smaller independents are becoming more active with local content laws also helping to engage smaller domestic or regional firms.

IMAGE: SHELL

Dealing with the oil price drop Since the oil price drop, the number of sanctioned projects has significantly reduced. Nevertheless, several new field development projects in West Africa are on course for final investment decisions (FIDs)

over the next few years as cost-cutting has enhanced their commercial viability in a US$50 per barrel market. In line with the depressed oil price, the regional industry has cut operating expenditure (OPEX) through cheaper services, improved optimisation and deferred project start-ups. As a result, per-barrel OPEX has dropped on average by more than 10% from US$4.70 in 2014, with Angola’s deepwater segment cutting its OPEX by up to 30%.

FIDs on the way Ophir Energy is expected to make an FID on its Fortuna FLNG project, located offshore Equatorial Guinea in Q1 2018, while Tullow Oil’s Greater Jubilee development off Ghana and the Niger Delta Anyalu-Madu project being developed by a First Exploration & Production and Schlumberger joint venture were both set for an FID in January 2018. Projects which are now targeted for FID in 2018 and 2019 include BP and Kosmos Energy’s Tortue floating liquefied natural gas project off Senegal and Mauritania and

Look to West Africa The West African oil industry is increasingly seen as an attractive place for enterprising UK businesses to expand their operations. Opportunities include: Drilling rig and services FEED, detailed engineering and other engineering services Geophysical survey and services Heavy lift equipment Information systems, information technology and communication services Liquefied petroleum gas, recovery and gas plant technology Marine vessel fabrication, equipment and security services Oil pumps Oil reservoir recovery potentiating Pipelines Project and asset management and maintenance Refining technology Refrigeration Research and development relating to in-country services Risk analysis and management Rotating equipment Rotor assembly, nozzles and related parts Subsea equipment, vehicles and services Training Valves Well drilling services

Bonga floating production storage and offloading (FPSO) vessel, Nigeria

www.the-eic.com | energyfocus

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West Africa: Oil and Gas

Cairn Energy in Senegal Edinburgh-based Cairn was the first company to drill deepwater wells offshore Senegal – a region which remains relatively underexplored today. Following two sizeable discoveries (SNE-1 and FAN-1) off the West African country in 2014 and a three-phase drilling programme, Cairn has now drilled a total of 11 exploration and appraisal wells. Information from all three phases of drilling and additional seismic work is being integrated to build and refine the understanding of the full hydrocarbon potential of the area. Building on these foundations, Cairn is currently working with its joint venture partners, Woodside, FAR and the Senegal National Oil Company Petrosen to progress a multi-phased development plan of the SNE field.

Development

The foundation development concept is a standalone floating production storage and offloading (FPSO) unit with subsea wells and expansion capability. Up to 25 wells have been proposed for the first phase of the SNE development to target ~240MMbbl principally in the S500 lower

reservoirs with an initial target plateau of 75,000–125,000bbl/d (dependent on FPSO capacity). The concept selection and engagement with major contractors has commenced prior to formal tendering for the FPSO and subsea infrastructure which was expected to start by the end of last year. The partners plan to submit an evaluation report and exploitation plan to the government of Senegal in 2018 and commence front end engineering and design. FID is due before the end of 2018 with first oil estimated in the period 2021–2023. The most recent 2C (best case) contingent resources estimates available put the resource base at 563MMbbl of oil. The subsequent development phases will target the S400 upper reservoirs and additional areas, with current estimates of an additional well count of 40 wells, with 20 producers and 20 water injectors. The current SNE development plans assume gas

Shell’s US$10bn Bonga South West deepwater project offshore Nigeria. The Bonga South West project is especially significant as it indicates the industry’s willingness to spend in the traditionally high-cost deepwater arena.

A subsea hub West Africa has long been a major hub for subsea contracting activity. Since 2000, the countries along its coast have accounted for nearly 10% of global subsea contract awards with over 75% of that demand coming from supermajors. Angola and Nigeria have

re-injection during initial development with the potential for gas export in later phases. It is estimated that the SNE field holds more than 1Tcf recoverable non-associated gas and 0.3Tcf of associated gas. The transfer of operatorship to Woodside for the development phase is planned to take place this year with Cairn continuing exploration activities on the acreage.

Local content commitment

To deliver Cairn’s programmes in Senegal the company has opened an office in in the capital Dakar and a supply base in the international port of the city. Given that oil and gas activities are relatively new to Senegal, local industry and regulatory expertise is in early development and as such creating capacity through training and education is a key part of operations.

something that will be a trend going forward) there has been an increase in brownfield demand as a cost-effective method of increasing oil production. Projects such as Chevron’s Agbami, Shell’s Bonga and Total’s Girassol represent just a few of the major projects continually providing opportunities for the supply chain.

Major commitment to the region The past couple of years have been a challenging period for the oil and gas industry and West Africa has not escaped the effects of a lower oil price. Delayed projects include Shell’s Bonga South West, where an FID has been postponed once again until 2018, and Maersk’s Chissonga which has gone back to the planning stage. However, the number of developments planned to be sanctioned over the coming years and the continued acquisition of exploration acreage demonstrates the future commitment of majors to West Africa. By Andrew Scutter, Upstream Sector Analyst, EIC For further information: For more information on the projects mentioned in this article, please visit EICDataStream.

Hot spot

The opportunity in Senegal is considerable. With recent findings attracting the attention of the global oil and gas industry, Senegal is set to make it on the map as a deepwater offshore oil and gas-producing nation.

represented around 80% of the region’s subsea demand since 2000. With an expected increase in regional diversity along the west coast of the continent, Angola and Nigeria’s market share is anticipated to drop to below 70% of the region’s subsea demand by the end of the decade as the industry looks to neighbouring countries for development options with lower costs.

Brownfield developments While historically West Africa has concentrated on greenfield project development, in the past decade (and

Get help from: Department for International Trade (DIT) To increase your competitiveness in West Africa, contact DIT senior trade adviser Oluwafemi Adesanya at Oluwafemi. Adesanya@fco.gov.uk for a free consultation

UK Export Finance (UKEF)

For trade finance and insurance cover, visit www.gov.uk/government/organisations/ uk-export-finance You can also check the current UKEF cover position for West Africa at www.gov.uk/ guidance/country-cover-policy-and-indicators

EIC Dubai

The EIC Dubai team is on hand to support you in doing business in West Africa. For services including market intelligence, project data and industry connections and export assistance, email dubai@the-eic.com

www.the-eic.com | energyfocus

Oil and Gas North Africa

ACTIVITY TO WATCH ACROSS THE REGION

EGYPS 2018

Putting the country’s key O&G players under one roof Unlock your export potential at EGYPS as Egypt ramps up efforts to attract foreign investment

fter its muchacclaimed inaugural event in 2017, the Egypt Petroleum Show (EGYPS) is returning to Cairo for its second edition, from 12–14 February 2018, where once again the EIC will be hosting the UK pavilion. Such was the success of the first event that EGYPS is already widely considered North Africa’s most important oil and gas show.

What makes EGYPS so special? EGYPS 2018 is the only place to meet all of the country’s key oil and gas players under one roof. International oil companies from all over the world, including Apache, BP and Eni will be in attendance alongside Egyptian government representatives and project owners. With conference sessions, project briefings, panel discussions and technical presentations taking place during the three days, delegates will gain real insights into Egypt’s oil and gas industry, finding out where the opportunities are and how to make the most of them. And with over 15,000 trade professionals expected at this year’s event, there’s no better platform in North Africa for

exhibitors to meet industry buyers, build new business relationships and generate sales.

Make Egypt the next stop for your business The discovery of the massive 30tn cubic feet Zohr gas field in 2015 made headlines around the world and has put Egypt on course to become an energy exporter once more. Other mega projects, including Eni’s Noras field development and BP’s North Alexandria project, have confirmed Egypt’s status as a major regional player, backed up by its recent signing of 79 oil and gas exploration and production agreements worth about US$15bn. Opportunities are not just limited to the upstream sector though. The country’s downstream sector is also attracting significant investment, with nine refining projects, worth US$8.1bn, underway, and US$226bn of petrochemical projects planned. With abundant resources, some of the most competitive production costs worldwide and a government committed to reforming its oil and gas sector, now is the time for your business to explore the opportunities on offer in Egypt.

38 energyfocus | www.the-eic.com

MOROCCO

North Africa’s smallest oil and gas player, Morocco has very little proven reserves and production. The country’s biggest project is the US$1.4bn Jorf Lasfar LNG import terminal. Morocco’s National Bureau for Electricity and Drinking Water has recently received international consultancy bids for the project, which is expected to be completed by 2020.

ALGERIA

The country has struggled to attract oil investment because of tough terms that made foreign firms wary; however, since the end of 2016, state energy firm Sonatrach began to take a more flexible approach to overseas partners. The company has recently awarded two engineering, procurement and construction contracts to JGC worth a total of US$1.9bn to develop the Hassi R’mel gas field and the Hassi Messaoud North Peripheral field.

TUNISIA

The limited oil and gas opportunities in Tunisia are mainly concentrated in its upstream offshore sector. The country was hit by protests during summer 2017, resulting in the Vana pumping station at Kamour being shut down, affecting around 40% of Tunisia’s 44,000bbl/d production. Things are looking up though with the government announcing plans to create 1,500 oil and gas jobs, backed by a US$32m development fund.

Looking to expand into North Africa? The EIC can help If you want to make the most of the many business opportunities on offer in North Africa, do get in touch with the EIC. Our Dubai team knows this regional market inside out and can introduce you to the all its 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 a virtual office service: everything you need to start building your business in the MENA region.

Visit the EIC-hosted UK pavilion Please take the time to visit the exhibitors on the UK pavilion in Hall 2 to find out how their innovative products and services can add real value to your projects and programmes. Advanced Sensors

A leading technology company providing instrumentation, detection systems and communication solutions for the oil and gas industry.

Delta Pacific Valves

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LIBYA

In addition to having significant gas reserves, Libya has the largest oil reserves across the whole African continent at almost 50bn barrels. Despite this, in 2016, Libya’s oil production, hampered by safety and security issues, was less than 30% of its 2012 level. Last year saw a slow recovery with oil production reaching 885,000bbl/d in June 2017. Libya’s ambitions include a three-phase development plan to lift output to 1.32MMbbl/d by the end of 2017, to 1.5MMbb/d by the end of 2018 and to 2.2MMbbl/d by 2023.

EGYPT

While Egypt still imported 50 LNG cargoes in 2017, the country should start exporting natural gas by 2019, mainly due to the huge Zohr natural gas field discovered by Eni in 2015. The company is expected to start production at Zohr in December 2017, setting a new industry record with 28 months from discovery and 20 months from final investment decision to early production. Two more development phases are planned, which may see another US$10bn invested in the field.

Heat Trace

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Rockpecker

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www.the-eic.com | energyfocus

Power Digitalisation

Powering up digitalisation Advances in technologies, telecommunications and data analytics are bringing benefits to the power industry, and now more companies are adopting digital tools, says Bob Aldridge at AVEVA Solutions

igitalisation is the most powerful trend reshaping industrial performance today. In power generation, momentum is building towards data-centric engineering solutions. From design, build and asset management processes rooted in a complete, integrated set of data, to intelligent information systems and better process management tools, technology is changing the ways major capital projects are executed and plant is operated and maintained. But progress is patchy and there are implementation challenges that companies need to tackle. The power sector’s approach is not unusual within complex engineering industries. As tech analyst Monica Schnitger set out in a recent blog, the challenges affect owner operators as much as the engineering, procurement and contracting companies that work with them, albeit in different ways. As Monica says: ‘It’s easy to digitalise if you’re a newish company, with a digitally savvy workforce. Make some apps, roll them out, collect lots of data, find the important bits, create a dashboard, start moving things around and making decisions. It’s much harder if you’re a 100-year old engineering firm, serving a conservative customer base, trying to eke out a bit more production in an environment that’s financially unforgiving.’ Power generation businesses, subject to weighty regulation, rightly have little

40 energyfocus | www.the-eic.com

appetite for systems risk. Yet as some early adopting companies have found, integrated engineering and design tools together with seamless information management can help to increase efficiency and grow margins, even in today’s tough environment.

US$1.3tn in untapped potential Modern digital tools that support data-centric processes across the entire plant lifecycle not only enable new plants to be delivered more effectively and with full data-centric digital information – but also allow established power plants to manage their operations more efficiently than ever before. A recent World Economic Forum paper on digital transformation in industry, the Digital Transformation Initiative Report, estimates that US$1.3tn of value could be captured globally from rapid digitalisation in the electricity sector between 2016 to 2025. It says: ‘By leveraging the building blocks of digitisation, such as service platforms, smart devices, the “cloud” and advanced analytics, companies in the industry have the opportunity to increase the asset lifecycle of infrastructure, optimise electricity network flows and innovate with customer-centric products. New pools of value could also be tapped “beyond the electron” by harnessing big data across sectors.’ These advantages intensify when you can automatically

link and select relevant information to optimise day-to-day activities. With structured, searchable information, integrated laser scan and 3D visualisation, and the opportunity to connect to real-time plant performance metrics during operation, you can execute more efficiently because you can: Coordinate and collaborate better between different teams across all stages of a plant lifecycle from initial plant design to decommissioning Use more effective mechanisms to validate and maintain completeness and consistency across your entire data set, reducing delays, errors and rework across a wide variety of activities Manage construction, commissioning and handover more effectively, leading to swifter start-up and a faster transition to full-scale production Handover progressively, avoiding rush and delivering validated digital asset data that can develop into a true digital twin, closing out the design/build phases quickly and easily Enable optimised plant performance and minimise unplanned outages Optimise planned outages Ensure that regulatory and safety requirements are met at all times

Digitalisation: Power

Drivers of demand, barriers to adoption

More data-centric tools provide personnel at all levels of the organisation with better data to make both day-to-day and strategic decisions. Moving from document-centric to data-centric tools builds the touchstone – a standard file format used to store measurement results; 3D laser scanning and plant visualisation layer on intuitive, data-driven reporting in real time. But are these benefits widely understood?

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What power leaders think about digitalisation A recent study by technology research specialists Vanson Bourne and AVEVA Solutions asked senior business leaders to discuss digitalisation in their businesses. Questions focused on how leaders perceive new technologies such as intelligent data systems and digital assets. They also explored the challenges of digitalising diverse power plants and the benefits technology offers plant businesses and those that support them. Some 88% of respondents felt that adopting digitalisation will increase revenues for their organisation. Over 70% believed plant

In power, the question is no longer if a company should digitalise, but how? digitalisation is a rapidly growing focus of attention or that it is happening now in their business. And most respondents found that digitalisation can boost production capacity and cut operating costs. There is faith in the benefits of digitalisation. From promoting integrated, collaborative working across disciplines, to facilitating interaction between companies there is appetite to digitalise at all levels of the supply chain. Yet despite these myriad advantages, adoption remains limited: only one quarter of power companies said digitalisation is happening in their assets. What are the reasons for the slow start?

MIT Sloan’s recent review, Achieving Digital Maturity, concludes that several factors influence a company’s journey towards digital maturity. These include the extent to which technology is core to their organisation, the time horizons companies impose on tech strategies and how quickly businesses can scale up from small pilot projects to systemic change. Here, the Vanson Bourne report showed that momentum is building. Nine out of 10 participants said that plant digitalisation is a top priority for 2018 onwards. Changing consumer demand, increased costs and regulatory change are the key drivers behind this trend. This reflects the close links between power generation and the networks that transmit and distribute power to mass market consumers. Technology is driving behavioural change in all aspects of consumption, so it is unsurprising that these preferences are reshaping the power supply chain, alongside other business-to-consumer industries. In addition, nearly all those interviewed say there are significant barriers to adopting full digitalisation in their operations. These include a lack of appropriate IT infrastructure, a dearth of in-house skills, and an over-reliance on legacy IT systems unsuited to either intelligent plant management or digital asset development. This is where positive examples of successful digitalisation in adjacent industries can be useful models for power companies to copy.

Not if but how… It seems that, in power, the question is no longer if a company should digitalise, but how. Over 40% of respondents said that digital information management will help them to make more informed decisions. More than 50% plan to invest in intelligent information management systems. The challenge for the technology industry is to adapt their tools to the specialist needs of power generators by creating robust, integrated engineering design and operational tools that can support the specific needs of the power industry. As demand grows, so the research shows that adoption will become more widespread. By Bob Aldridge, Senior Business Strategy Manager, AVEVA Solutions www.the-eic.com | energyfocus

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Power

Offshore power generation

Figure 1.

Could offshore power stations solve our energy

Steam to surface power generation facility Pressurised water from surface power generation facility

problems?

Can fossil fuels remain buried and still be an energy resource? Tom Baxter at the University of Aberdeen thinks so

ome time ago the media asserted that in order to combat climate change a large proportion of the world’s oil, coal and gas reserves would have to remain in the ground. Climate change affects us all, its reach is global and without a doubt, the ‘keep it in the ground’ movement has many supporters. But the benefits of fossil fuels need not be lost to us. Maybe there is a way of both keeping it in the ground and obtaining their inherent energy. Perhaps we can have our cake and eat it.

An alternative to CCS? Currently oil and gas from the UK Continental Shelf (UKCS) are partially processed offshore, then pipelined or shipped many hundreds of kilometres to land. There, they are further treated: predominantly for use as fuel. While the inherent energy of fossil fuels is a very valuable commodity for society, the combustion process, as used for power generation, has well documented environmental consequences – global warming, smog and the effects of nitrous and sulphur oxides.

Increasingly, attention is being turned to combining fossil fuel power plants with carbon capture and storage (CCS). A common application is post combustion capture, whereby the carbon dioxide (CO2) is removed from the power station flue gases, treated to remove water and compressed to a pressure sufficient to liquefy the CO2. The liquefied CO2 is then pumped to a storage facility. The proposed storage facilities are often depleted oil and gas fields, which are, as previously mentioned, situated many hundreds of kilometres from the power station. The process of carbon dioxide removal, treating and pumping is energy intensive, which is somewhat self-defeating.

Could oil platforms become offshore power stations? So why don’t we move the power station to the oil and gas field? We could use in-situ combustion (ISC) where the oil and gas are burned in the containing rock, the heat generated is used to produce

Offshore oil platforms could be converted into offshore power stations through in-situ combustion

Heat from fire front

steam, the steam is taken to a surface facility, power is generated from the steam and transmitted to shore (Figure 1). No hydrocarbons are taken to the surface and the combustion products are locked within the sub-surface reservoir. We have our cake and we eat it! While ISC sounds very novel, it has been used for many years for heavy oil production. The process involves the injection of air, enriched-air or oxygen to enable combustion of oil and gas within the reservoir, creating heat and the release of CO2. The application, however, is different from that proposed in this exposition. Instead of producing steam, the heat from the combustion front reduces oil viscosity and vapourises light oil components. Both of which enhance flow to the production wells. While it might be considered unsafe, it is not – isolate the oxygen supply and the combustion process is stopped.

Practicalities However appealing as it might be, sub-surface steam generation and surface power production present numerous challenges and uncertainties. A very significant amount of research and development effort would be required to prove the concept and its commerciality.

Areas to be addressed would include: Modelling the combustion process Efficiency of heat transfer Steam well design Surface facility and transmission requirements Effect of the combustion products Reservoir seal integrity Integration with other offshore infrastructure Commerciality

Making it work The aforementioned research and development would not come cheap. My view is that it would require such a level of investment, integration and commitment across the competing energy companies that the current UK set up would be a barrier to its implementation. To make something as radical as this concept work needs a state energy company – accepting that nationalising the remaining resource in the UKCS was necessary to maximise what was left. This sort of thinking is necessary if we are to achieve our climate change goals. Offshore power stations could be exactly what we are looking for. By Tom Baxter, Senior Fellow in Chemical Engineering, University of Aberdeen

www.the-eic.com | energyfocus

Nuclear Small modular reactors

The development of small modular reactors (SMRs) is regarded as crucial to the future of the nuclear industry. As the government sets out to make the UK a leader in SMR technology, two industry giants, NuScale Power and Rolls-Royce, share their big SMR plans with Energy Focus

Powering a UK–US energy partnership Tom Mundy, NuScale Power CCO and UK Managing Director, talks about the company’s UK SMR offering

t their simplest, small modular reactors (SMRs) are safer, smaller, flexible and scalable versions of traditional nuclear power plants. Based on tried-and-tested pressurised water reactor technology, NuScale Power’s SMR is designed with passive safety features, fully fabricated in a factory and assembled on site. NuScale is one of the most advanced developers of SMR technology and already

44 energyfocus | www.the-eic.com

has plans to build its first commercial power plant at a site in Idaho during the mid-2020s. As we prepare to deploy our SMRs in the US, we are also partnering with British companies to bring forward a vision of a multi-billion pound SMR venture in the UK. We are an active participant in the UK government’s SMR competition. Our UK partners include Ultra Electronics, the Nuclear Advanced Manufacturing Research Centre and Sheffield Forgemasters. We recently published our UK SMR action

plan, setting out how we will deliver UK SMR deployments over the next decade.

Meeting the UK’s energy challenge Deployment of SMR technology offers a timely solution to the UK’s energy challenge, with SMRs being needed by the mid-2020s to replace retiring coal-fired power stations and the UK’s ageing nuclear fleet. It will also be important to have a low carbon source of baseload electricity to help meet future electricity needs created by both increased demand and the electrification of transport. As well as helping to meet demand, SMRs represent a cost-effective way to help meet the UK’s ambitious decarbonisation targets. Our power plants are scalable and can begin generating electricity from the first module installed, with additional modules added as customer demand for electricity increases. This feature reduces initial capital cost. The

Small modular reactors: Nuclear

We are confident that the UK can be a part of our plans for global SMR deployment

smaller physical and environmental footprint of a NuScale power plant increases the number of sites that might be suitable for deployment, including sites previously discounted due to size or the infrastructure requirements of large-scale plants. The technology is ideally suited to supply process heat for a variety of industrial processes, including district heating, desalination and chemical and hydrogen production. Our SMR design has extensive load-following capability for integration with intermittent generation sources such as wind and solar, providing a stable back-up for the grid as well as highly reliable power to meet the electricity needs of critical infrastructure.

A UK–US partnership By supporting an SMR programme, the UK will be in pole position to capture a significant share of the global SMR market – potentially worth up to £400bn by 2035. A UK–US partnership on SMRs offers an

opportunity for Britain to become a global leader in innovative nuclear technology, an area in which the country already has a strong pedigree and world-renowned expertise. UK companies have the means to provide more than 85% of the content required for NuScale UK deployments. We believe a multi-billion pound UK SMR venture will boost economic growth, productivity and wealth creation, as well as create high-value jobs. There is also the potential for both intellectual property rights and export opportunities, greatly benefitting the UK’s nuclear industry and wider supply chain.

Window of opportunity NuScale can achieve UK SMR deployment by the 2020s by

leveraging our mature design and existing pipeline of customer interest. We are confident that the UK can be a part of our plans for global SMR deployment – however, the window of opportunity to take first-mover advantage is rapidly closing. The UK government can and should seize this once-in-ageneration SMR opportunity and help bring forward our plans of a UK–US partnership on SMRs. The government should provide long-term political support, help us overcome barriers to investment and create the right market conditions needed for our technology to be deployed in the UK. By Tom Mundy, Chief Commercial Officer and Managing Director (UK & Europe), NuScale Power www.the-eic.com | energyfocus

Nuclear: Small modular reactors

he decarbonisation of our energy mix is a critical step towards ensuring a sustainable future for generations to come. Recent events, such as the ratification of the Paris Agreement at the Framework Convention on Climate Change, have reinforced the global desire to achieve the goal of keeping global warming effects below two degrees Celsius. While debate may still exist at some levels, many nations are moving forward at pace to address this generational challenge.

impressive, driven by advances in technology and a favourable government subsidy regime. In contrast, new nuclear has been slower to progress. The lengthy process to finance the Hinkley Point C nuclear plant project required intervention from British, French and Chinese governments. New large reactor projects at Wylfa Newydd and Moorside are progressing through similar financingÂ discussions.

How can we build affordable reactors? For decades the deployment of nuclear power stations has relied heavily on state funding; either via direct financing, project subsidy or through state-backed utilities and operators. Even as technology has evolved, the benefits gained have been used to try and increase the output of power stations

Switch to low carbon In the UK, some progress has been made in decarbonising the electricity generation mix. Last year saw the first day in over 130 years where no coal power provided electricity to the National Grid. The surge of renewables has been

A once in a lifetime opportunity The reduced size of SMR power plants and their relative flexibility present a clear opportunity, writes David Orr at Rolls-Royce

46 energyfocus | www.the-eic.com

Small modular reactors: Nuclear

(maximising the economy of scale) rather than reduce the barriers to deployment. This has led to ever-larger power station designs, which theoretically can recover more of their fixed costs through increased power output. In reality, the complexity and magnitude of large reactors now makes them too expensive for any but the wealthiest of national governments to finance. Since 2015, Rolls-Royce has been leading the development of a new design of small modular nuclear power station (see photos) that seeks to revolutionise the way that nuclear power station development is funded and delivered. Based on a new interpretation of proven pressurised water reactor technology, the UK small modular reactor (UK SMR) design is intended to reduce the cost of nuclear electricity to levels around £60 per megawatt hour. This will make it competitive with the latest advances in offshore wind and other

renewables (particularly when one accounts for the fact that nuclear is the only generation technology to carry the full lifecycle cost of its construction, operation, decommissioning and waste management). Around 60% of the cost of a conventional nuclear project relates to construction, the majority of which is conventionally carried out on site. This poses significant delivery challenges as a multitude of different contractors and organisations vie for space and time on a complex, dynamic and highly regulated construction site. Further complication is added through unavoidable delays caused by poor weather. The UK SMR is designed to be modular from the ground up. Reactor components, systems and civil structures are all designed to be manufactured off-site in factory production facilities, avoiding many of the site-based challenges and maximising the opportunity to develop a resident skilled workforce. These modular building blocks can then be transported to site along regular roads and integrated together quickly and efficiently. Only earthworks and the lower elements of the foundations will be constructed on-site. Full plant standardisation will be achieved through the implementation of a novel ‘seismic raft’ approach to the foundations that separate the locally constructed lower foundations from the elements shipped in from factories. Cooling water provision is based on standardised modular systems that can be reconfigured to match each sites characteristics and requirements.

Making it happen

The UK SMR is designed to be modular from the ground up

First deployment of the UK SMR is targeted in the UK in the early 2030s, with several existing identified sites viable for first-of-akind deployment. The UK SMR consortium consists of leading UK engineering organisations including Arup, Laing O’Rourke, Nuclear Advanced Manufacturing Research Centre, Nuvia and Wood. At present, the consortium is working towards

Full-scale deployment of SMR technology in the UK could lead to upward of 40,000 skilled jobs being created entering the UK’s nuclear regulatory process for new reactor designs (Generic Design Assessment) in 2019. International interest is also high: multiple organisations from around the world have already expressed interest in the design, and in November 2017 the Jordan Atomic Energy Commission signed a memorandum of understanding with Rolls-Royce to conduct feasibility studies into deploying UK SMR in Jordan.

The UK’s nuclear future? Full-scale deployment of the technology in the UK (with around 12 power stations constructed) could lead to upward of 40,000 skilled jobs being created, the vast majority of which could be sustained by an ongoing programme of exports. At around £2bn per power station, these exports can be supported by UK Export Finance, enhancing the opportunity for the UK to partner with a range of trading nations from around the globe. The need for low carbon, safe and reliable energy production has never been more significant. UK SMR will be a complementary option alongside large reactors, renewables and other low carbon technologies to provide clean and cost-effective electricity through the 21st century. By David Orr, Director, Future Programmes & Technology, Rolls-Royce www.the-eic.com | energyfocus

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Nuclear

Decommissioning and waste

Energy Focus talks to Patrick O’Sullivan, Decommissioning Specialist in the International Atomic Energy Agency (IAEA) Department of Nuclear Energy’s Waste Technology Section

provides direct support through its technical cooperation programme, e.g. face-to-face and distance capacity building and training activities. Where do you see the biggest opportunities in decommissioning and waste management across Europe over the next 5–10 years? There are currently approximately 80 power reactors permanently shut down or under active decommissioning in Western Europe, and a further 30 or more may be shut down during the next decade. With the www.the-eic.com | energyfocus

IMAGE: GETTY

Q&A

What is the IAEA's role in the decommissioning of nuclear facilities and radioactive waste disposal? The IAEA develops safety standards and associated guidance which, although not mandatory, typically provide the basis for the legal and regulatory infrastructure developed by IAEA member states. The IAEA is also mandated to gather and disseminate good practices on all aspects concerned with the peaceful uses of nuclear energy, including decommissioning planning and implementation. Finally, the Agency

Nuclear: Decommissioning and waste

control and provision of suitable metal melting facilities, to facilitate recycling, will tend to reduce overall costs.

important exception of the gas-cooled reactors, for which management of irradiated graphite remains problematic, the generally preferred decommissioning strategy for these is to proceed directly to dismantling following a transition period during which the spent fuel is removed and the facility is prepared for decommissioning – including post-operation clean out, establishment of waste management systems, facility characterisation and preparation of safety and environmental impact studies for decommissioning. Important prospective activities arise in all these areas, as well as on aspects more directly associated with facility decontamination and dismantling. Similar considerations apply to other facilities of the nuclear fuel cycle and to management of legacy waste and associated storage facilities, e.g. from past research-related activities.

accuracy, taking account of uncertainties, and that financing arrangements are reviewed on a regular basis and modified as necessary to ensure that adequate provisions are made while revenues are being generated from the facility.

What can be done within the nuclear decommissioning sector to reduce uncertainty on projects? Cost overruns are almost always associated with unanticipated changes to the planned project scope. Final costs are generally most sensitive to: (1) the end state of the facility and the associated land; (2) contamination levels, particularly unexpected contamination; (3) the extent to which dismantled materials can be cleared from regulatory control; and (4) the waste management options available for materials being managed as radioactive waste. Important uncertainties linked to these issues may be reduced by well-focused characterisation undertaken prior to decommissioning; early agreement on end state criteria with regulatory authorities; and establishment of waste treatment systems during the transition period. The IAEA has several initiatives to encourage the sharing of experience on these issues, including a network for decommissioning practitioners and a decommissioning wiki-based information resource. Nuclear decommissioning trust funds have been established in several countries, whereas others rely on provisioning arrangements made by the facility owners. What is important is that oversight arrangements are in place to ensure that future costs are estimated with sufficient

How can we drive more innovation in decommissioning and waste management, so that projects can be delivered faster, cheaper and safer? Cost, project duration and cumulative dose levels tend to be interlinked. Staff costs (e.g. for project management, engineering and other support activities) typically make up a significant proportion of total costs. Innovation begins with improvement in planning and project management: reducing the overall timeframe from shut down to completion of decommissioning is a key consideration in reducing overall costs. Other important costs are related to dismantling and removal of the plant and the waste management costs. For example, dose levels in pressurised water reactors plants can be significantly reduced by undertaking a prior system decontamination of the primary loop, thus enabling the dismantling to proceed more quickly and safely. Removal of large components in a single piece rather than their segmentation and packaging on-site also tends to reduce time and cost. Adopting or leveraging innovation developed in other fields brings significant benefits for decommissioning, e.g. early development of electronic 3D models of the plant, with superimposed dose levels, will also facilitate faster and safer dismantling. In addition, maximising the extent to which materials can be released from regulatory

50 energyfocus | www.the-eic.com

It is likely that countries with small nuclear programmes will rely increasingly on external expertise to implement decommissioning activities

What do you see as the biggest challenges facing the decommissioning industry in Europe? With the possible exception of damaged reactors, decommissioning of nuclear facilities can be fully implemented using currently available technologies. The most important single challenge is the current lack of waste management facilities, particularly for disposal of radioactive waste with significant long-lived components. Ensuring that sufficient numbers of appropriately qualified and trained people are available for the extensive timeframe over which decommissioning will occur, and the provision of systems to capture and transfer experience gained from ongoing projects, are also important. How can we continue to improve cooperation and synergies across Europe? Much has been achieved in terms of general harmonisation of standards, though there is still a wide diversity of approaches to waste management and the application of clearance in particular. Greater collaboration on research and development would likely accelerate acceptance of more advanced technologies in areas such as robotics, development of remote means of characterisation (e.g. using drone technology), virtual reality systems in preparation for dismantling activities, and the use of laser technology for cutting and decontamination, waste management in general and clearance in particular. How can UK businesses break into supply chains in other countries? The IAEA’s role in promoting harmonisation of safety standards, and in facilitating knowledge sharing on current good practices, is helping in this regard, e.g. by assisting member states to be ‘informed customers’ in selecting which technologies best correspond to their needs. It is likely that countries with small nuclear programmes will rely increasingly on external expertise to implement decommissioning activities.

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Renewables Energy storage

Driving force of the future Energy Focus looks at how trailblazer Tesla is taking on energy storage

esla’s mission is to accelerate the world’s transition to sustainable energy. Founded in 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to drive electric, today the company builds not only all-electric vehicles but also scalable clean energy generation and storage products.

Powering a better future Tesla says there are three key components that can help address climate change and have a positive impact on the world: sustainable energy generation, electric cars and batteries. While renewable energy and electric cars are becoming competitive technologies, to become truly transformative these technologies need a new generation of batteries for injecting reliability and resiliency into the energy network overall. Enter Tesla. Energy storage is a key factor in addressing future energy demands, says Tesla. To create an entire sustainable energy ecosystem, the company has designed a unique set of energy solutions enabling homeowners, businesses and utilities to manage renewable energy generation, storage and consumption. The technology is similar to that of the batteries deployed in high-performance Tesla electric cars. Along with storing renewable energy from, for example the wind or sun, such batteries can draw energy from the electrical grid during off-peak hours when rates are lower and store it for later use. Tesla’s Powerpack is a high-performance, infinitely scalable battery storage system for

utility and commercial applications. It can help organisations gain greater control, efficiency and reliability across the electric grid by enabling them to avoid peak demand charges, buy electricity when it’s cheapest, participate in grid services, create a microgrid or back up for critical business operations in the event of a power outage as well as maximise consumption of on-site renewable power. Scalable from 200kWh to 100+MWh, the system delivers broad application compatibility and streamlined installation for businesses and utilities by integrating batteries, power electronics, thermal management and controls into a turnkey solution.

Addressing energy demands around the world In the UK, Tesla’s battery/energy storage solution is playing a vital role at the UK’s largest supercharger station in South Mimms near London. As more electric vehicles hit the road, there will be increased demand for electricity and charging. Integrating a 250kW Powerpack at South Mimms is enabling vehicles to charge from the Powerpack instead of drawing power from the grid during peak periods. During off-peak hours, the Powerpack system charges from and discharges to the grid providing a Firm Frequency Response service to National Grid and earning revenue for balancing grid electricity supply and demand on a second-by-second basis.

In the US, Powerpack has been installed at the StubHub Center in Carson, California – home of major league football team LA Galaxy. The 2MWh system is helping the stadium manage energy costs and reduce its impact on the Southern California power grid. Naturally, the sports venue puts a tremendous strain on the grid during events and the Powerpack system allows the stadium to draw stored energy during times of heavy usage. On the Hawaiian island of Kaua’i, a 13MW SolarCity photovoltaic array plus 52MWh Powerpack system has been built under contract with Kaua’i Island Utility Cooperative (KIUC). The system stores solar energy created during the day and feeds it to the grid during the evening hours to reduce the amount of diesel power generation needed to meet electricity demand. This will help KIUC meet its goal of using renewable resources to generate half of the island’s electricity by the end of 2019. In South Australia, a 100MW/129MWh Powerpack system charges using renewable energy from the Hornsdale wind farm and delivers electricity during peak hours to help maintain the reliable operation of South Australia's electrical infrastructure (see photo). Completed in December 2017, this system is the largest lithium-ion battery storage project in the world and will provide enough power for more than 30,000 homes. Working in close collaboration with the South Australian government and Neoen, this grid-scale energy storage project is not only sustainable, but will help solve power shortages, reduce intermittencies and manage summertime peak load to improve the reliability of South Australia's electrical infrastructure. This project is the blueprint for future energy storage deployments around the world.

Energy storage is key Through these and other global projects, clean energy powerhouse Tesla is helping countries, utilities and businesses to address energy demands as well as firm up their renewable energy supply. And this is just the beginning. Tesla firmly believes that energy storage has a central role to play in creating a new, evolved energy system and will boost the adoption of renewable energy sources, making a significant contribution to decarbonising our energy supply as a whole. www.the-eic.com | energyfocus

Renewables Chile

Flexibility is key As Chile learns to harvest its formidable solar and wind power resources, increasing system flexibility will be vital. It’s this ‘middle market’ that’s ripe for UK expertise, notes Carlos Barría at Inodú

n 2017, fewer than 15 countries worldwide reached solar and wind energy production levels of greater than 10%. Of these, Chile is the only Latin American country and during October 2017, solar and wind energy exceeded 13% of its total energy produced.

European advantage The other countries are all in Europe, and most of them are interconnected with other nations. These countries take advantage of their capacity to exchange energy with their neighbours in order to integrate more renewable energy. For example, Denmark, which, as of 2016, generated more than 40% of its energy from wind and solar, can export its excess energy to Germany, Norway and Sweden. Additionally, Denmark has direct access to what is often referred to as Europe’s hydroelectric battery, Norway, to help Denmark balance its load when the wind does not blow as expected.

Chile’s energy transformation In contrast to its European counterparts, Chile is only connected to Argentina by a

54 energyfocus | www.the-eic.com

345kV transmission line between the Salta and Andes busbars. Chile is a long country with abundant renewable energy potential across its long transmission system, with electricity demand concentrated in only a few locations. Besides being the first country in the world to establish a power market back in 1982, the peculiarities of Chile’s electric system and its rapid integration of renewables are creating new opportunities and challenges as it looks to continue to integrate large quantities of renewable energy in the future.

Flexible opportunities The introduction of large quantities of renewable energy will create opportunities for resources that can provide flexibility in the Chilean power market. With the introduction of higher quantities of variable sources of energy, such as solar and wind, the shape of the net load duration curve (that is, load minus variable generation, which must be generated by other generation units) has changed and will continue to evolve. Integrating renewables reduces base generation capacity in the long-term and

IMAGE: GETTY

Chile: Renewables

increases the need for intermediate generation capacity with more operational flexibility to satisfy the net load. The ‘middle market’ – the dispatchable generation or storage capacity that operates at intermediate loads to cover the variations from renewable energy and electricity demand – has reached 3,000MW and is expected to double or triple in the next 10 years. Factors that will differentiate middlemarket assets include start-up costs, start-up times, minimum times of operation and shut down, heat rate capacity at partial load, environmental impact, ramping capacity, ability to provide reserves and the minimum level of operation. The competition for the middle market will also depend on where flexibility is needed in the electricity system. The location of new renewable energy projects, the location of existing assets that can provide flexibility and the evolution of the transmission system will greatly influence the regional need for flexibility. For example, south Chile has a large base of reservoir hydroelectric facilities that can use stored water to complement renewables.

Chile’s carbon reduction commitment

3,000MW

In 2015, Chile submitted an Intended Nationally Determined Contribution (INDC) to the COP21 climate change conference in Paris. The INDC states that if Chile receives financial support it will commit to reducing its CO2 emissions per GDP unit by between 35% and 45% (compared with 2007 levels) by 2030. Additionally, in September 2014 the country passed a law imposing a tax on CO2 emissions produced by generation facilities with a capacity of 50MWt or more. The CO2 emissions tax excludes facilities which burn biomass and was set at US$5 per tonne of CO2 emitted. Chile’s efforts to reduce CO2 emissions in the power sector will continue to rely on the integration of renewables. In the future, the emissions intensity (quantity of CO2 per unit of energy) of the middle market will be as relevant as its capacity to integrate renewables and meet its long-term CO2 goals.

has now reached this level and is expected to double or triple in the next 10 years

By Carlos Barría, Consultant, Inodú

Energy in Chile Solar and wind energy generated in Chile exceeded

13%

of total energy produced Large quantities of renewable energy will create opportunities for resources that can provide flexibility in the Chilean power market

THE ‘MIDDLE MARKET’

www.the-eic.com | energyfocus

EIC Member Focus ABLE Instruments & Controls

MY BUSINESS

Mike Shortall,

ABLE Instruments & Controls

Can you tell us a little bit about ABLE? Founded in 1985 on a former WWII Spitfire base, the business has grown from a small distributor of third-party measurement devices to an added value manufacturer, staffed with experienced industry specialists that can undertake large projects on a global scale. ABLE’s in-house systems engineers can supply solutions to measurement problems ranging from complex metering applications for oil and gas to environmental monitoring for water and waste processing. What do you know now that you wish you’d known when you started the company? Understanding the gestation periods for changes in the control and instrumentation sector to take root and the resistance to change inherent in upstream oil and gas. We have a much better appreciation of these now but, in truth, we could have reached that stage sooner.

IMAGES: ISTOCK/ALAMY

If you hadn’t founded ABLE, what would you have done instead? That’s a tough question. I would probably have ended up in some sort of self-driven enterprise. In fact, at the time of ABLE’s inception I was close to setting up a water skiing school since I already owned a vital start-up asset – a boat! What’s a typical day like at ABLE? Customer contact drives the day’s priorities, ranging from on-site global services, customer support, project management, tender preparation and order processing. What’s been the biggest change since you started in 1985? Me stepping back from the day-to-day business in 2010 and appointing our management team who capably cover all the key areas of operations, marketing, technical sales and commercial management.

56 energyfocus | www.the-eic.com

and repeatable real-time measurement of mud during drilling operations.

Energy Focus caught up with ABLE Instruments & Controls owner Mike Shortall to find out what day-to-day life is like at the company What’s been ABLE’s biggest highlight to date? Perhaps winning our first truly major project award against stiff opposition – the full level control and allocation metering package for the Nexen Buzzard platform. Another example was obtaining our first patent for a genuinely bespoke and unique solution – the ABLE SlugMaster – to a previously unaddressed application problem: delivering accurate liquid flow measurement during heavy aeration, slugging, slurry or solid particle entrainment. ABLE’s MudMaster™ product has been attracting major industry attention, can you tell us about it? The MudMaster places a very powerful analytical tool in the hands of the drilling engineer and represents a major innovation in drilling automation. Using non-contact and non-intrusive technologies, the ABLE MudMaster™ measures the mudflow in the gravity-fed mud return flowline under all partially full flow conditions, giving accurate

What’s next for ABLE? Our next big challenges are in oil exploration and e-commerce. We have important mud drilling analyser evaluations in Alaska with some groundbreaking automation trials linked to environmental safety following the Deep Water Horizon incident. We’ve also invested in e-commerce as a purchasing tool and seen a significant uptake in its use. What would it surprise our readers to know about ABLE? I would say our nuisance odour control for the comfort of rugby fans, and the two million residents served by Thames Water’s Mogden sewage treatment works adjacent to Twickenham stadium. ABLE supplies and maintains the hydrogen sulphide measurement systems – the largest odour control monitoring installation in Europe. And you? I’m currently based most of the year in the Algarve where, thanks to remote access, I can continue my part-time involvement in the business effectively. I recently developed an interest in fishing, since water-skiing on the ocean is bit too much of a challenge these days! How has ABLE embraced the digital revolution? Digitalisation has been in ABLE’s DNA from our beginnings in 1985, the year of world firsts in IT with the launch of IBM’s PC and the Lotus 1-2-3 spreadsheet. We embraced this technology from the outset and are now involved in groundbreaking Internet of Things (IOT) smart solutions: for example our Aegex ATEX tablets, the complete IoT platform for hazardous locations and e-commerce (247ABLE).

WE CONTINUE T INVEST IN O O STOCK PROG UR RAMME We have had 30

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