Energy Focus Autumn 2020 by Energy Industries Council

energyfocus

ISSUE 41 AUTUMN 2020

F ROM T H E E N E RGY I N DUST R I E S COU NC I L OIL AND GAS A deﬁning moment for Mozambique – the next big exporter of LNG

POWER The role of cities in the global transition to cleaner energy

NUCLEAR Opportunities for the UK in decommissioning markets around the world

RENEWABLES The North Sea Wind Power Hub – the key to hitting oﬀshore wind targets?

Can Britain become an exporting powerhouse? Charting a course through post-Brexit waters

INSIDE:

Sir Ian Wood KT GBE View from the top

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Contents ISSUE 41 AUTUMN 2020

Sir Ian Wood KT GBE

FROM THE EIC 5 Foreword From the Chief Executive

6 View from the top Sir Ian Wood KT GBE, Chair of Opportunity North East

10 News and events Updates from the EIC

OIL AND GAS

NUCLEAR

18 The next great LNG player

26 Make your move into the US$250bn global decom market

Paulo Chachine, Country Director Mozambique, UK Department for International Trade

Rodney Berkeley, Director, Energy and Infrastructure, Department for International Trade

21 The UK can ride the blue economy wave

Unlocking trade in a post-Brexit world

Trevor Garlick, Chair, Opportunity North East Energy and the Global Underwater Hub

RENEWABLES

12 The big question

30 Turning the tide on marine energy

How can we encourage more businesses to export?

14 Special report: Exporting post-Brexit Jeremy Bowden on trade after the transition

34 My business Anand Puthran, CEO and Founder, McMenon Engineering Services

Eileen Linklater, External Relationship Manager, EMEC

POWER 22 Building the energy transition

Smart utilities for smart cities

Eric Woods, Research Director for Smart Cities, Guidehouse Insights

Taking advantage of North Sea wind

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

32 Energy islands take oﬀshore wind to the next level Michiel Müller, Programme Manager, North Sea Wind Power Hub, TenneT

Global decom opportunities

Editors Sairah Fawcitt +44(0)20 7880 6200 sairah.fawcitt@redactive.co.uk Mark Risley +44(0)20 7091 8614 mark.risley@the-eic.com Account director Will Hurrell Production director Jane Easterman Senior designer Gene Cornelius Picture editor Akin Falope Content sub-editor Kate Bennett

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

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

Recycle your magazine’s plastic wrap – check your local LDPE facilities to find out how.

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Foreword Stuart Broadley CEO

From the Chief Executive: In this edition we look at the compelling case for companies to compete on the global stage, as the world continues to deal with coronavirus and the countdown to COP26 begins We are honoured to welcome Sir Ian Wood KT GBE as our View from the top in this edition. One of Scotland’s most successful and inﬂuential businessmen, Sir Ian’s far-ranging vision helped transform the modest Aberdeen-based ﬁshing business founded by his father into a global energy services giant employing around 55,000 people across operations in more than 60 countries. Now no longer at the helm of Wood plc, Sir Ian continues to champion initiatives as Chairman of The Wood Foundation, a Scotland-based charity with a global outlook, and Opportunity North East, a private sector catalyst for transformational change in north-east Scotland. Highly respected for his views on business and energy, he excites debate on subjects ranging from energy transition and exporting to roles of government and talent development. As someone who used to work for Sir Ian 20 years ago, I am always in awe of his vitality, intellect and genuine care for his community. This edition focuses on the vital topic of internationalisation, following on directly from the EIC’s largest event of 2020 – the highly successful Virtual Energy Exports Conference, which brought together 2,500 delegates, US$800bn of project opportunities and over 200 speakers from 20 countries, participating in more than 50 webinars during four days at the end of September. Now, more than ever, we need to focus on encouraging more UK businesses to export. As well as market uncertainty, the UK political climate continues to cause investment challenges, and the value of UK energy opportunities continues to drop year

on year. There simply is not enough business to go around inside the UK across all energy sectors, and companies must now turn their resources and investments to international growth, or risk having to diversify outside energy in order to find growth. If the lack of UK opportunity does not underline the need to grow exports, then surely the withdrawal of the UK from the European Union must drive the message home? At the time of writing, the UK is weeks away from a deal or no-deal outcome of EU exit negotiations. We have just agreed our first post-Brexit trade deal with Japan, while talks for new and lucrative free trade agreements (FTAs) with countries including the US, Australia and New Zealand continue. The benefits of tapping into a foreign market with strong demand could be game-changing for companies, and I urge EIC members to grab the chance to piggyback on these FTAs and capitalise on these opportunities. The other groundswell change in Europe beyond Brexit is energy transition. The speed of change is incredible. Oil companies in Western Europe are leading the charge, but differences in priorities are slowing progress in the Americas, the Middle East, Africa and Asia. Does this mean European players are smart, care more for the planet, and are ahead of the curve in seeing the business opportunity, or are they instead bowing to social pressure too soon and leaving the lucrative oil markets for the rest of the world to enjoy? This question is central to COP26, the UN Climate Change Conference that will be hosted by Glasgow in November 2021. I recently asked EIC members what they wanted Prime Minister Boris Johnson to pitch on the COP stage. They were resolutely

clear in their response – emphasise the UK’s innovative supply chain, have a clear energy transition roadmap, make the UK globally competitive, have an integrated energy policy and be aware that the time for action is now. COP26 will be a mega-event for Glasgow, with 30,000 delegates and more than 100 heads of state. However, event management on this, or any, scale is still a massive unknown for 2021, with continuing social distancing measures, face masks, travel bans, quarantines and social trust issues when meeting strangers. It seems unbelievable that nearly a year has passed since COVID-19 struck and still the technology, events and digital industries have struggled to solve the problem of how to network and meet the next new client using digital platforms. Rarely has a problem needed to be solved so universally – what a chance for innovation and wealth creation for someone out there. Next year will undoubtedly be absorbing. We all want a return to face-to-face interactions, the opening up of air travel and a COVID-19 vaccine, while the desire to keep the positive aspects of home-working, digital meetings, online content delivery and concern for continued emission reductions will remain strong. Bring it on, 2021!

Stuart Broadley Chief Executive Oﬃcer, Energy Industries Council stuart.broadley @the-eic.com

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From the EIC Q&A Sir Ian Wood KT GBE

View from the top Q&A: Sir Ian Wood KT GBE

As we move towards net zero, the energy industry will play a critical role in providing the technology and the solutions. We need new perspectives, new skills and new ways of thinking

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Q&A Sir Ian Wood KT GBE: From the EIC

IMAGE: GRAEME MACDONALD

Energy Focus talks with Sir Ian Wood, the man behind Wood Group’s massive global growth, Chair of Opportunity North East (ONE) and a vocal advocate of accelerating the energy transition to more sustainable sectors

In the current environment, what advice would you give to business leaders trying to survive and grow? The impact of COVID-19 and accompanying fall in commodity prices has had a signiﬁcant impact on the industry and the global economy, presenting additional challenges for those looking to export. Businesses have demonstrated resilience and adaptability and government has acted quickly to support the economy. The challenge now is to step back from reactive thinking and action. Business owners and leaders need to reset, assess the market and any new opportunities, and focus on how they can deliver to take full advantage of these as the industry prepares for economic recovery.

Scotland to play an important role in developing innovative low-carbon solutions. This region is home to half of Scotland’s energy jobs, and has a highly skilled, internationally experienced supply chain, skilled in operating remote, complex floating production facilities in harsh environments and expert in complex large-scale project management. We have the ambition, capability and capacity to make a significant contribution to net zero and already have several noteworthy projects – the Acorn hydrogen and CCUS projects, Aberdeen Hydrogen Hub, world-leading floating wind demonstrators, the European Offshore Wind Deployment Centre and the proposed Energy Transition Zone (ETZ), which will lever the £350m Aberdeen Harbour South investment in a new deep-sea green port.

As Chair of ONE, what are your objectives for Aberdeen and Aberdeenshire? ONE was formed four years ago as a private sector-led, not-for-proﬁt economic development company to broaden our economy so it depends less on oil and gas. It has become a leading force in economic and business development in the region and is an important co-funder of projects with regional and national partners. We have economic strengths beyond energy, with major shares of national food and drink production, enormous tourism potential, a dynamic life sciences cluster and exciting digital developments. The focus is on action and delivery, with targets set for each of the industry sectors that contribute to national economic goals.

What is needed from government, the oil and gas industry and the supply chain to create the confidence to invest and grow low-carbon businesses at scale? The energy industry has the opportunity to contribute £2.5tn to the UK economy and create more than 200,000 new jobs supporting activity across the UK. Discussions are ongoing with the UK government on a transformational North Sea Transition Deal. This will set out how the oil and gas industry will play its part in supporting a green recovery that attracts investment, and jobs, and boosts the supply chain. The ask for government is to support a transformational deal, including demand stimulation and a funding package to help the industry to reskill towards alternative forms of energy and the push towards net zero. The Scottish government’s £62m Energy Transition Fund will support businesses during the next five years as they grow and diversify, and will help attract private sector investment in the region. Major projects to be considered for funding include the Global Underwater Hub, Net Zero Solution Centre projects, Aberdeen Hydrogen Hub, the Acorn project and the ETZ. The UK’s upstream oil and gas industry was one of the first sectors to embrace the 2050 target, with

What are the key strengths that the region offers, and how are these relevant to helping achieve net-zero carbon 2045 goals? The region’s assets include 50 years of oil and gas experience, our significant offshore infrastructure, and an entrepreneurial, globally-focused company base. The skills and expertise developed in oil and gas developments lend themselves to diversification, and these strengths uniquely position the north east of

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About Sir Ian Wood Born and educated in Aberdeen, Sir Ian Wood is a well-respected and inﬂuential global businessman. His career began in the North East ﬁshing industry, but he is best known for his work in the North Sea and international oil industry with Wood Group, serving as Chief Executive from 1967 to 2006 and as Chairman until 2012. He was the author of the Maximising Economic Recovery UK Report and led the start-up of the Oil and Gas Technology Centre. Sir Ian remains Chairman of JW Holdings Limited, is the current Chancellor of Robert Gordon University and Chair of ONE. Committed to the importance of philanthropy, Sir Ian and his family established The Wood Foundation in 2007. In 2019, he received the Carnegie Medal of Philanthropy.

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From the EIC: Q&A Sir Ian Wood KT GBE

The North Sea Transition Deal will set out how the oil and gas industry will play its part in supporting a green recovery OGUK Roadmap 2035 highlighting the role the sector can play to help the UK achieve the energy transition. Is Aberdeen ready to take advantage of the opportunities that will arise from CCUS and hydrogen, having missed out on the large prizes that offshore wind presented? The region is well placed to take advantage of CCUS and hydrogen opportunities, and the huge opportunity ahead with offshore wind. It is simply not true to say we have missed that opportunity. We have an immediate opportunity unlocked by the Crown Estate’s ScotWind leasing round, adding a further 8–10GW capacity in the next 10–15 years, with investment expected to surpass £8bn. Many sites are within a 100-mile radius of Aberdeen, and the combination of Aberdeen Harbour South and the ETZ will provide a game-changing proposition to the offshore wind industry. The Offshore Wind Sector Deal sets out an ambitious partnership between government and industry to raise the productivity and competitiveness of UK companies to ensure the UK continues to play a leading role. The planned ETZ will ensure the region can offer the combined marine and onshore support to accommodate large scale renewable activity to support these projects. One-third of the UK’s CO2 storage capacity is located within 50km of Aberdeen, highlighting the strategic importance of the region in reusing infrastructure and building on existing knowledge. The onshore facilities and pipeline infrastructure are already being redeployed towards carbon capture and storage through the Acorn CCS

project, and the Acorn Hydrogen project at St Fergus Gas Terminal will initiate large scale blue hydrogen production by 2025. As higher levels of green hydrogen production are unlocked through oﬀshore wind power, the region is well placed to scale up activity to meet the demand for heat, transport and industrial use. What do you want government to prioritise as its key deliverables during the next one to two years? ONE’s submission to the Scottish government’s independent advisory group on economic recovery outlined clear priorities: focus on high potential opportunities to safeguard and create new high-quality jobs, and aim to produce sustainable employment, particularly for young people. Accelerate the application of digital technology to maximise eﬃciency and productivity. Maximise the energy transition opportunity in green recovery. Provide some funding to enable the North East of Scotland to progress an Energy Transition Zone that will be key in establishing energy transition as a major new

While I encourage exporting ambition, limit your exposure to risk and be targeted with the opportunities you pursue

industry in the region. Aim to build significantly on our oil and gas and energy transition export activities. Ensure UK supply chain companies get some market priority to enable them to get into the business and build up at least for a period of time. Reduce bureaucracy, particularly in planning, to enable faster decisions in delivering new investment and infrastructure – for example, a new offshore wind project still takes something like 10 years from concept to operation. For the UK government, we also want it to support the North Sea Transition Deal, accelerate support for CCUS and articulate a clear ambition on hydrogen that will put the relevant policy levers in place to stimulate demand and support the commerciality of green hydrogen. Both governments need to do everything they can to support the energy supply chain now. Do you believe it is realistic for oil companies to be successful, and competitive, and to generate suitably high margins in both oil and gas as well as renewables? I think there is real commitment and determination from many oil companies to do this, and I believe it’s possible. If I take BP as an example, it has set out how it plans to maintain the necessary cashflows from hydrocarbons while it scales its low-carbon and energy transition businesses. It expects to get 8%–10% returns across its renewables portfolio, but it also intends to continue to focus on its hydrocarbon business as an engine of cashflow. The oil and gas industry will be critical for key capital-intensive clean energy technologies to reach maturity. Scaling up these technologies and bringing down their costs will rely on large-scale engineering and project management capabilities – qualities that are a good match to those of large oil and gas companies. Without the oil and gas industry, the transformation of the energy sector will be more difficult and expensive, and will take longer. What actions are needed to make Scottish and British supply chain companies competitive on a world stage? North Sea oil and gas expertise gives us a great starting advantage, but we must work harder and faster to identify the existing

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Q&A Sir Ian Wood KT GBE: From the EIC

IMAGES: ABERMEDIA / MICHAL WACHUCIK / SHUTTERSTOCK

Without the oil and gas industry, the transformation of the energy sector will be more diﬃcult and more expensive, and will take longer

skills and technology from oil and gas that can be applied to low-carbon areas including offshore wind, hydrogen and CCUS. The OGTC Closing the Gap report is helpful, as it has started to outline what needs to be done to progress some of these priorities. We are already exporting almost £12bn of goods and services to other basins around the world, and we need to focus on creating the environment and conditions to support the supply chain diversify into new markets at home and abroad. Connecting companies to opportunities is a key role for ONE. In partnership with Scottish Development International and the Scottish government, we support Scottish companies looking to export through peer-to-peer knowledge events and through energy market specialists located in Boston, Kuala Lumpur, Mumbai, Mexico City, and soon Johannesburg. The international market specialists focus on supporting market entry and growth in specific regions – offering extensive insight and expert advice on how to grow business overseas successfully. The right advice from in-country specialists can have a significant impact on successful outcomes and fast-track progress, and access to “boots on the ground” is proving more valuable than ever for those navigating international markets in these challenging times.

We were delighted to welcome you once again as a keynote speaker at our Energy Exports Conference. How important are events like these in encouraging international trade and kickstarting exports growth? It’s vitally important we continue to focus on international and export opportunities and provide support for those looking to export at a time when the global economy presents additional challenges. We must retain our strong international and outward-looking approach to build on our existing export activity, support international energy transition projects and drive further export growth. I commend EIC and partners for successfully putting together a virtual event to provide businesses with insights on international energy markets and connect them with export opportunities. What advice would you give to companies looking to take the ﬁrst steps towards exporting? I encourage companies and anyone interested in exporting to new territories to ﬁrst do their research, get your best people to visit, and use the market specialists and the wider support of SDI, DIT, UK Export Finance and other organisations. Speak to other companies that have been successful

in your target markets; there is so much you can learn from your peers. While I encourage ambition, limit your exposure to risk and be targeted with the opportunities you pursue. Pick one or two potential opportunities and do due diligence to fully understand the market, the customer and the opportunity. Many of Wood Group’s ﬁrst steps into new markets were with existing customers, so we understood their business and way of working; this was a great advantage, as we took time to understand new countries and over time build up our in-country presence. What more needs to be done to help enhance diversity and shape, inspire and grow energy leaders of tomorrow? The energy industry is a great place to work, with opportunities for development for people from a huge range of disciplines and backgrounds. The transition ahead makes the industry an exciting and long-term career choice. As we move towards net zero, the energy industry will play a critical role in providing the technology and the solutions. We need new perspectives, new skills and new ways of thinking. We are now seeing real progress in companies across the industry, and the work of the OGUK Diversity and Inclusion Task Group in championing a diverse and inclusive working environment within energy is very welcome. What do you hope will be achieved at COP26 in Glasgow in November 2021? The industry and the supply chain have a tremendous opportunity to showcase how the UKCS, as a mature province, can be an exemplar of how the natural synergy between oil and gas and energy transition will accelerate solutions. I want to see both governments with a shared vision of green economic recovery, demonstrating that real action is being taken to achieve this. The ask right now is for government to support a North Sea transformational deal. The hope is that, in 12 months, that ask has been answered, and tangible progress made in implementing it is being showcased at COP26. www.the-eic.com | energyfocus

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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 REPNEW O OUTRTS NOW

Reports EIC Insight Report: Downstream

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 EIC’s role is to help members maximise commercial opportunities worldwide.

Events EIC LIVE e-vents Since the beginning of March, when many countries faced national lockdowns, the EIC has quickly adapted to change all events from physical to virtual. We have now run more than 80 webinars to an audience of more than 8,000 delegates, with speaker companies including ADNOC, Petrofac, Pale Blue Dot, Saipem, KBR, SBM Oﬀshore, Petronas and many more. New EIC LIVE e-vents are being continuously organised and will appear on the EIC website’s full events diary, with the majority being free to attend for EIC members.

The oil and gas sector, in particular downstream, is expected to undergo a significant transformation as growing demand for petrochemicals amid slowing oil demand, climate change and sustainability, and diversification away from oil and gas all contribute to significant disruption. This report studies new emerging technologies in the sector. It looks at the opportunities in carbon capture and storage, hydrogen, waste-to-fuel, renewable power-to-liquid (E-fuel), crude oil-to-chemicals and digital technologies all present attractive opportunities.

To ﬁnd out more and book onto our latest events, visit www.the-eic.com/ events/fulleventsdiary

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From the EIC News and events

EIC Country Report: Mexico Mexico has attracted signiﬁcant foreign direct investment in the past ﬁve years, as investors look to take advantage of the convertible currency, low taxation and labour costs, and duty-free access to the US and Canadian markets. This EIC Country Report provides indepth PEST analysis of Mexico, the major players operating in the country’s energy sector, current and future projects, and a comprehensive guide to doing business in the country. To buy or download your copy of these reports, please visit: www.the-eic.com/Publications/ MarketIntelligenceReports

2,500 energy businesses join EIC’s US$800bn Energy Exports Conference

IMAGES: SHUTTERSTOCK / ISTOCK

More than 200 speakers from 20 countries joined 50+ sessions across the four-day virtual event

Mexico has attracted signiﬁcant foreign direct investment in the past ﬁve years

The Virtual Energy Exports Conference saw more than 2,500 supply chain and end-user delegates joining to hear from over 200 speakers, including Sir Ian Wood and senior representatives from BP, Shell, Total, ExxonMobil and Petrobras. More than US$800bn worth of project opportunities were presented by major project decision-makers from around the world during the four days, with many in key energy markets in the Americas, Europe, Middle East, Africa, and Asia Paciﬁc. Sir Ian Wood KT GBE, Chairman of Opportunity North East, oﬃcially opened the event in the Opening Plenary, saying it was “essential that change is transformational and not evolutionary.” Sir Ian acknowledged the excellent work that had been done in the oil and gas industry during the past 50 years, highlighting that “We now have the chance to show we can do the same again for energy transition.” EIC CEO Stuart Broadley said: “With continued Covid-19 uncertainty and travel restrictions making it hard to meet the next new client, we were delighted to have had so many companies participate in this four-day event– companies that are clearly urgently

needing to pursue new opportunities, expand their networks and re-focus on export growth.” International delegations from Argentina, Australia, Azerbaijan, Bahrain, Brazil, Canada, Guyana, India, Malaysia, Mexico, Mozambique, Nigeria, Oman, the UAE, Uzbekistan and Vietnam featured throughout the event, highlighting opportunities in key energy markets around the world. On the ﬁnal day, Talal Al-Marri, CEO and President of Aramco Europe, and Dr Saif Sultan Al Nasseri, CEO at ADNOC Gas Processing, headlined the Industry Plenary. Other distinguished speakers included Lord Edward Lister, Chief Strategic Advisor to the UK Prime Minister, Dave Stewart, CEO of Wood’s Asset Solutions business in Europe, Africa, Asia and Australia, and Councillor Barney Crockett, the Lord Provost of Aberdeen and President of the World Energy Cities Partnership. Supported by Platinum Sponsor Petrofac and media partners Energy Voice, OGV Energy and Upstream, the Virtual Energy Exports Conference 2020 was the biggest EIC event in its 77-year history. www.the-eic.com | energyfocus

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From the EIC Members’ comment

The

How can we encourage more businesses to export?

BIG question

As highlighted at this year’s EIC Virtual Energy Exports Conference, pursuing an export strategy has never been more important. Expanding into international markets can seem daunting, so how can we help companies kick-start their exporting journey? Energy Focus puts the big question to four members

Colin Elcoate

Emilio Renato Imbriani

CEO at Alderley Exporting has been key to the success and longevity of Alderley. One recent example is our investment in Saudi Arabia to grow our international portfolio. In 2016, at the height of the oil price downturn, Alderley established a second and much larger facility in Saudi Arabia to support this growing market. This investment gave us the physical capacity to meet the local demand; however, additional funding assistance – both working capital and bonding – was required. Working with Lloyds Bank and UK Export Finance (UKEF), we continue to secure the support to take on and successfully meet this demand. As a result, we are now the primary supplier of ﬂow measurement and custody transfer solutions for Aramco. With a strong relationship with UKEF and the Department for International Trade (DIT), and with coverage now in many international markets, Alderley has a broad and accessible customer foundation that

Exporting is critical for growth and longevity means we can continually grow and are less susceptible to market changes. Exporting is critical for growth and longevity. I would encourage all budding and experienced exporters to engage with and leverage the support from UKEF and DIT, as well as industry bodies such as EIC. Alderley’s export experience would have been a lot more challenging without their help.

Alderley is a leading provider of skid-mounted, integrated solutions and services for the global energy industry. Repeatedly partnering with some of the biggest names in the industry, our solutions – including metering, produced water treatment, hydraulic controls, modular wellsite skids, chemical injection systems and through-life services – have been installed in onshore, oﬀshore and ﬂoating applications throughout the world.

Managing Director at Indra Indra established its position as a key player in its domestic market before developing its business abroad. Having a solid brand for the Italian national market was a critical factor in our exporting success. The company provides customised valve solutions. Our attention to help customers solve their technical problems, ﬂexibly and rapidly, has been fundamental in building trust between domestic customers and the key to attracting international ones. Indra’s steady growth plan involved selling through agents at the start and slowly building connections with big engineering, procurement and construction players and end-users outside of Italy. In recent years, the company has been able to devote its direct sales resources to the export management, combined with the work of local agents.

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Members’ comment: From the EIC

The support from government agencies is fundamental for foreign market entry As part of a global process, Indra has moved closer to the main markets, dedicating resources to be registered on project preferred supplier lists, while participating in events to publicise the skills acquired. The support from government agencies, promoting a simpliﬁed bureaucracy, is fundamental for foreign market entry. They should encourage exports and recognise the quality and value of the products made. Uncertainty about Brexit is hampering the development of the UK market, but it strengthens our will to continue working on penetrating this market.

Indra is at the forefront of designing and manufacturing new concept instrumentation valves. Since 1987, Indra has operated according to high standards of safety and eﬃciency. The company is characterised by ‘Made in Italy’ and by the monitoring of all the production’s steps. Its products are used in the oil and gas, petrochemical, chemical, power and LNG sectors.

Iain Smith Senior Vice President at Proserv Controls We work around the globe, and every market presents its own challenges. For any business looking to grow into new regions, it’s essential to thoroughly understand the prospective market and its opportunities extremely well before launch, and how this expansion integrates with the rest of the firm. For instance, Proserv provides different solutions and technologies in varying regions, so that could be our measurement offering in the North Sea or subsea controls technology in the Gulf of Mexico. But each

has its dedicated logistical support and supply chain considerations. Having a comprehensive understanding of the market has helped drive the success of our service offering in the Middle East. We already had a large installed base of legacy equipment in the region, and we identified an opening to build a business around providing maintenance optimisation and helping locally-based companies improve efficiencies and their operations.

It’s essential to thoroughly understand the prospective market and its opportunities Adopting a localisation strategy is another crucial factor. A business must show commitment to a region, establish a physical presence and build roots. This takes time and eﬀort, but ultimately, as with Proserv, you have an opportunity to construct rewarding long-term partnerships with customers and collaborate with other service providers.

Proserv is a controls technology company incorporating two divisions: Proserv Controls and Gilmore, a Proserv Company. Proserv Controls encompasses subsea and topside controls solutions, ﬁeld and design services, intervention workover control systems, sampling, measurement and renewables diagnostics. Gilmore is a specialist in hydraulic control valves and ﬂow control solutions.

Exporting to multiple markets makes your company more stable and resilient in times of crisis years of expertise in design, planning and operation of nuclear power plants) or choose export as our growth strategy. Our passion for nuclear technology made international expansion a clear choice for us. Exporting to multiple markets makes your company more stable and resilient in times of crisis, as you no longer depend on one market or customer – as we did. I would encourage any company to take this step. The Covid-19 pandemic has accelerated digitalisation worldwide. With online meetings and remote inspections, digital channels are creating and facilitating new trade opportunities. Working from a diﬀerent country is no longer an obstacle, and travel costs won’t ruin your budget. Carrying out holistic market analysis and developing a solid delivery model, TÜV SÜD offices in the UK, Korea, China and Turkey continue to work together on growing our brand awareness and acquiring international projects. A crucial aspect of our success, my advice to companies planning to enter new markets is to build a stable network of experts that understand the culture in their target countries.

Dr Lars-Thilo Voss Head of Business Line Nuclear Power and Decommissioning at TÜV SÜD Following Germany’s decision to shut down all its 17 nuclear power plants, our options were to either focus on decommissioning (losing more than 50

TÜV SÜD’s nuclear section is an independent service provider for assessment, inspection and advisory services in ﬁelds of high-risk potential technologies, focusing on activities related to the safety of nuclear facilities. Additionally, TÜV SÜD oﬀers a comprehensive range of trainings in alignment with the entire nuclear power plant lifecycle, including ISO 19443.

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Special report Exporting post-Brexit

Exporters

brace for

EU exit The UK government is helping businesses prepare for postBrexit trade. However, uncertainty is leaving many exporters seeking further support and unsure whether they will be able to maintain, let alone expand sales. All this at a time when the government is looking to exporters to drive economic growth, writes Jeremy Bowden

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07/10/2020 15:45

Exporting post-Brexit: Special report

ince the completion of the UK-EU divorce agreement at the end of 2019, trade negotiations have been under way, with the UK aiming for a Canada-style ‘skinny’ free trade deal – with no tariffs, no quotas and no obligations under EU rules, to be ready by 31 December this year. Negotiations have progressed relatively well, with environmental and labour standards agreed, and stumbling blocks reduced to state subsidy rules and fishing rights. If agreed, the deal needs to get the approval of the UK and EU parliaments and, depending on the complexity, could require the consent of all EU national governments. A successful deal will mean far fewer checks and lower or no tariffs for manufactured goods, but it will not avoid new non-tariff checks, and will not benefit service companies. If a deal is not secured, the EU is expected to make business more difficult to get the UK back to the table – meaning likely problems with trade and logistics, as well as new tariffs. The UK will be easing in checks in three stages over six months, while the EU will implement all new conditions from 1 January 2021.

Business Brexit Checklist The British Chambers of Commerce checklist provides actionable, practical advice for marketers and businesses on:

Workforce Future staﬃng requirements, the immigration status of EU employees

Cross-border trade Customs checks, tariﬀs on UK-EU trade

IMAGE: SHUUTERSTOCK / CRAIG ZADUCK

Keeping businesses moving To help prepare businesses, Michael Gove announced a major public information campaign on 13 July, dubbed ‘Check, Change, Go’, which highlights practical steps that need to be taken, along with a comprehensive operating model for the UK-EU border. From January 2021, traders will need to have a GB Economic Operator Registration and Identification number before moving their goods. They will also have to register with the relevant customs authority and get the customs value (based on the WTO valuation agreement) and commodity code for their goods – which will be needed to make a customs declaration and to calculate duties. Exporters will need to consider whether they can benefit from any of the available simplifications or facilitations, including deferring customs declarations for standard goods. They must also make sure they have the right certificates and licences required for entry. The government has also contacted all importers and exporters, urging them to contact their local British Chamber of Commerce for guidance on the new EU trading relationship.

Taxation VAT payments, registration of services

Currency Risk, EU regulation

Intellectual property Trademarks, property rights

Contracts Legal and practical questions

SOURCE: WWW.BRITISHCHAMBERS.ORG.UK

Further support and advice are available from the Department for International Trade’s (DIT) global network of international trade advisers, which the DIT tells us “are a key component of the ﬁeld force team, who are providing one-to-one support in person or over the phone to businesses and their supply chains to minimise disruption to the movement of goods. Alongside this, an extensive programme of webinars will be delivered by departments to help businesses prepare for the end of the transition period and seek new opportunities to trade with the EU and the rest of the world.” Among other recent changes, the DIT has replaced the Overseas Market Introduction Service, which originated in the former UK Trade and Investment, with “new guidance on the commercial services overseas posts should charge for”.

Tailor-made deals Other trade deals (as close to ‘free’ as possible) are being negotiated alongside Brexit, with a Japanese deal secured in mid-September and South Korea not far behind – although a deal with the US was said to be on hold due to the US elections. The DIT said that all new trade deals would be “specifically tailored to shape our country’s economy so that they can deliver greater opportunities… We will work to open markets for UK exporters in all parts of the world and do whatever it takes to ensure they have what they need to succeed.” A recent report from the National Audit Office says the DIT has made a good start in developing a strategy and the operating arrangements it needs to support export growth, but that “it is not clear whether the DIT is focusing its efforts and resources in the regions and sectors where there are the greatest opportunities to support UK businesses”. In addition, UK Export Finance has expanded its offer of export finance to support UK businesses. In the case of the deal with Japan, the DIT says it secures additional benefits beyond the EU-Japan trade deal, giving UK companies tariff-free trade on 99% of exports to Japan, as well as being an important step towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This will give UK businesses “a gateway to the Asia-Pacific region and help to increase the resilience and diversity of supply chains”. www.the-eic.com | energyfocus

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07/10/2020 15:45

Special report: Exporting post-Brexit

9 new global FTAs are in negotiation – EU, US, Australia, New Zealand, Kenya, CPTTP, Turkey, EEA/EFTA and Japan (agreed in principle)

What trade deals has the UK done so far? 19 trade agreements with 50 countries have been rolled over and will start on 1 January 2020. Among them are signiﬁcant economies such as Israel, South Africa, South Korea and Switzerland The Japanese deal also includes “cuttingedge digital and data provisions that go far beyond the EU-Japan deal”, along with “improved mobility for business people – securing more ﬂexibility for Japanese and British companies to move talent into each country”. Similar provisions can be expected in other forthcoming deals.

Policy support for green energy The government has promised to use industrial policy as well as trade to help boost exports. There is policy support for manufacturers and exporters, particularly those involved in green energy. In May, the government removed tariffs on £30bn-worth of supply chain imports, including copper alloy tubes, screws and bolts. Duties on ‘green imports’, including renewable energy items such as LED lights and thermostats, will also be cut. If an EU free trade deal is not possible, tariffs will be imposed on goods imported into the UK from Europe that are also produced in the UK and which the government wants to protect. There will be 0% tariffs for imports entering UK supply chains for use in UK production.

3 mutual recognition agreements – Australia, New Zealand and the US

Tough call The government’s export strategy in 2018 set a goal of raising exports as a proportion of GDP from 30% to 35%, but this looks likely to be a tough call given current circumstances. Even before Brexit, the EIC’s Survive and Thrive report 2020 revealed that exporting is the least favoured growth strategy among members. Clearly, much needs to be done by the government and businesses to improve exports, in combination with a broader industrial policy – something many

fast-growing Asian nations have been doing for many years. Such an approach has not been openly tried in Europe for some time, but it could provide signiﬁcant opportunities for exporters in the medium to long term, provided the coming Brexit upheavals can be negotiated without too much disruption. The government will have another route to push its goals when it hosts the G7 meetings in 2021 and can access a wider key audience, and perhaps take the lead in pushing towards a world with fewer trade restrictions.

UK top 10 trading partners (2019) £61,280m (16% of total exports)

£36,666m (10%)

Germany China France

£25,122m (7%) £25,122m (7%)

Netherlands £24,501m (7%) Ireland Belgium

Clearly, much needs to be done by the government and businesses to improve exports

5 FTAs are at prenegotiation stage – India, Mercosur, Taiwan, GCC and Bangladesh

18 FTAs are in discussion – if an agreement is not reached by 31 December 2020, trade with other WTO members will take place on WTO terms

£21,705m (6%) £12,951m (2%)

Others £133,694m (36%)

Switzerland £11,389m (3%) Spain

£10,682m (3%)

Italy

£10,049m (3%) SOURCE: WWW.ONS.GOV.UK

16 energyfocus | www.the-eic.com

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AssetMap

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www.the-eic.com/MarketIntelligence/EICAssetMap

EIC_Autumn20.017.indd 17

06/10/2020 12:20

Oil and Gas Mozambique

ollowing recent offshore discoveries, Mozambique holds the third-largest proved natural gas reserves in Africa and could be among the world’s 10 largest exporters of liquefied natural gas (LNG) within a decade. An estimated 100–125 trillion cubic feet of proven natural gas reserves lie in two adjacent blocks, Area 1 and Area 4, in the offshore Rovuma Basin off Mozambique’s northern coast. The projected US$65bn investment for the first phase for developing the requisite infrastructure to exploit the reserves is the largest of its kind in Africa.

Upstream developments Spearheaded by a consortium led by Total, Area 1 will see the US$24bn development of the Golﬁnho and Atum natural gas ﬁelds and the construction of a two-train liquefaction plant with a total capacity of 13.1m tonnes per annum (Mtpa). As per the Plan of

Development (POD) 400 million standard cubic feet per day (MMSCFD) has been earmarked for downstream domestic gas projects. A ﬁnal investment decision (FID) on Mozambique LNG was reached in 2019, and the project is expected to come into production by 2024, having secured US$14.9bn ﬁnancing last July. The EPCI contract has been awarded to a joint venture of Saipem, McDermott and Chiyoda. Area 4 is being developed by ExxonMobil and ENI and will see construction of the 15.2Mtpa Rovuma LNG plant fed by the Mamba Complex. ExxonMobil will lead construction and operation of liquefaction and associated infrastructures onshore, while Eni leads construction and operation of upstream infrastructure. ExxonMobil has delayed FID on the US$30bn project. Initial FID was signed in 2019 and JGC, Fluor and TechnipFMC were awarded the onshore EPC contract. The POD was approved in May 2019 and 500 MMSCFD are earmarked for downstream domestic gas projects.

Mozambique is expected to become a top 10 global LNG supplier. UK companies have the experience, expertise and technology to help maximise the country’s oﬀshore gas potential, writes Paulo Chachine at DIT Mozambique

The next great

LNG player 18 energyfocus | www.the-eic.com

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Mozambique: Oil and Gas

MAJOR PROJECTS TO WATCH Key Gasfield Proposed LNG export plant Proposed LNG export offshore floating LNG vessel

Malawi

Mtwara

Tanzania

Masai

Area 4 Total

Tanzania

Golfinho Area 1 ExxonMobil/ ENI Atum

Palma LNG site Mozambique Orca LNG Tubarão Tubarão Tigre Mocímboa da Praia

Mozambique LNG poised to take off

An estimated 100–125Tcf of proven natural gas reserves lie in Area 1 and Area 4 in the Rovuma basin off the coast of Mamba Mozambique Coral

Prosperidade Complex

Coral South FLNG Ironclad

Mozambique offers opportunities for investment throughout the oil and gas value chain Eni is leading the construction of the US$8bn FLNG vessel to service the Coral Gas field. JGC, Samsung Heavy Industries and TechnipFMC were awarded the contract to build the FLNG and construction started in March 2018 – more than 60% has been executed, with first gas scheduled for 2022.

IMAGE: SHUTTERSTOCK

Mid and downstream plans The Government of Mozambique has awarded gas development contracts to Shell Mozambique (to produce diesel and 50–80 MW of electricity), Yara International (to produce fertiliser and 30–50 MW of electricity) and GL Energy Africa (to produce 250 MW of electricity). The government is keen to build, or at least facilitate the building of, gas-to-liquid facilities, fertiliser and methanol production. Other planned energy projects include an LNG import terminal at the Port of Matola. Beluluane Gas Company has secured a concession from the government for the import of LNG to the port. The concession

Rovuma LNG Liquefaction Plant Value: US$30bn Stage: EPC Status: Contract awarded Startup: Delayed Operator: ExxonMobil, ENI Mozambique LNG Project (Phase 1) Value: US$24bn Stage: EPC Status: Contract awarded Startup: 2024 Operator: Total Area 4 Coral Field Upstream Development Value: US$8bn Stage: EPC Status: Contract awarded Startup: 2022 Operator: ExxonMobil, ENI

includes the operations of a permanently anchored ﬂoating storage regasiﬁcation unit (FSRU), marine infrastructure, and new high-pressure pipeline. The new pipeline will connect the FSRU to the new 2GW Beluluane Thermal Power Plant, which will be built in Matola. This pipeline will also connect to Matola Gas company pipeline network in Matola, which is connected to the Rompco gas pipeline, supplying gas to South Africa.

To identify more opportunities for global growth, track international projects across all energy sectors with EIC DataStream. Further details can be found at:

Exporting British expertise

Key opportunities for UK businesses

Mozambique offers opportunities for exports and investment throughout the oil and gas value chain and the associated investment in infrastructure. UK expertise played an integral role during Mozambique’s exploration activities, and British companies are well placed to participate in the development and production of Mozambique’s LNG and FLNG plants, in compliance with local content policies. From resettlement housing to infrastructure and heavy machinery, to complex deep-sea piping, all services will have to be outsourced to companies with know-how and experience. Doing business in Mozambique does not come without its challenges. The UK Department for International Trade, with offices at the British High Commission in Maputo, stands ready to help UK companies navigate their way through the local business environment and achieve success in this very significant opportunity. By Paulo Chachine, Country Director Mozambique, UK DIT

www.the-eic.com/MarketIntelligence/ EICDataStream

Oil field service, oil country tubular goods Subsea production systems Offshore surveys, drilling, supply vessels, helicopter operations Shipping, logistics, camp and supply base management Equipment rental and supplies Pre-FEED and FEED EPC/EPCI, fabrication, industrial services, O&M Offshore and marine contractors, LNG-carrier services, naval industry

Get help from Department for International Trade (DIT) Email: DIT.Africa@fco.gov.uk

EIC Dubai The EIC Dubai team is on hand to support you in doing business in Africa Email: dubai@the-eic.com

www.the-eic.com | energyfocus

18-19 Mozambique_Autumn 2020_Energy Focus 19

08/10/2020 10:18

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EIC_Autumn20.020.indd 20

06/10/2020 12:22

Oil and Gas Global Underwater Hub

or decades, the North Sea oil and gas industry has been recognised as an underwater technology pioneer. This has enabled the UK to become the leader in the global underwater energy sector, with 40% of market share. Today there are more than 1,000 companies with expertise in the underwater sector, supporting 45,000 jobs across the UK. The highest concentration of companies is in Aberdeen, with other clusters in Scotland’s central belt, NorthEast England and the South of England. The UK underwater sector will play a crucial role in helping deliver net-zero targets by creating a thriving blue economy across multiple industries, from offshore wind to aquaculture and defence to hydrogen production. The synergies in floating offshore wind developments will be huge.

Opportunity for green growth

IMAGE: GETTY / EQUINOR

The UK’s underwater expertise, engineering skills and manufacturing capabilities mean the country is perfectly poised to take a larger slice of the global underwater market, predicted to be worth more than £100bn by 2035. To realise this signiﬁcant potential, Opportunity North East, Subsea UK, Scottish Enterprise and the Oil and Gas Authority have worked together to develop an exciting vision: the creation of a Global Underwater Hub that will connect and grow the UK’s underwater sector at home and overseas. Building on and integrating the excellent work of Subsea UK, the Hub will accelerate the growth and innovation of UK

Underwater engineering:

the UK can ride the blue economy wave The drive towards net zero presents exciting subsea opportunities to develop solutions that support the energy transition, capitalise on the blue economy and win more business overseas, writes Trevor Garlick, Chair of the Global Underwater Hub businesses by building on our existing strengths, and make a step-change in the development and internationalisation of technology and services. Led by a team in Aberdeen, the Hub will also have a physical presence in England. It will provide global market insight and cross-sector sharing and collaboration, with skills and company support also identiﬁed as key areas within the proposal. By connecting the underwater sector with international market opportunities, the Hub will ensure the UK can grow in emerging markets that rely on underwater expertise, such as oﬀshore renewables and carbon capture and storage. It will facilitate collaborations between companies, industries, government and academic institutions. Cross-sector alliances will be created to drive innovation in new underwater solutions that support the shift towards a low-carbon society.

Industry commitment and government support

years, and one that can make a signiﬁcant contribution to the UK’s focus on accelerating the achievement of net zero. The Hub already has strong commitment from industry and governments, which recognise the huge potential for green growth across sectors spanning oil and gas, oﬀshore renewables, aquaculture, defence, maritime and communications. Earlier this year, we welcomed the announcement of the Scottish Government Energy Transition Fund, which includes a commitment to help fund the Hub, and we are hopeful that the UK government will also provide matching funds support. Investing in the creation of the Global Underwater Hub can help deliver a UK sector revenue increase from £8bn to more than £40bn annually, and generate an additional £45bn in value to the UK throughout the next decade. The domestic and international prize is clear, and the time for investment is now. This is a very competitive global sector, and the UK can remain the leading player.

We have developed a robust investment case in what is arguably one of the UK industry’s biggest opportunities for revenue generation across the next 15

By Trevor Garlick, Chair of Opportunity North East (ONE) Energy and the Global Underwater Hub www.the-eic.com | energyfocus

20-21 underwater hub_Autumn 2020_Energy Focus 21

07/10/2020 15:47

Power Smart cities

Building the energy transition Cities are at the forefront of the energy transition, but smart cities will need smart utilities, writes Eric Woods at Guidehouse

22 energyfocus | www.the-eic.com

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Smart cities: Power

C IMAGE: GETTY

ities are a focal point for some of the most profound economic, environmental, social, and technological issues facing the world today. Not least of these is the need to move to cleaner and more eﬃcient energy resources to meet the demands of urban populations that will expand by 2.5 billion people over the next 30 years.

Building grid ﬂexibility

Accelerating the energy transition also oﬀers cities an attractive route to building back better in the wake of the coronavirus pandemic

Energy networks underpin the smart city, but cities are also examining the sources of that energy and how eﬃciently it is being used as they look to reduce both greenhouse gas emissions and energy costs. Many cities already have plans to be carbon-neutral or zero-carbon by 2050 or earlier. Strategies to create sustainable cities are well aligned with changes in the energy sector as energy providers and other players

adapt to the requirements of a low-carbon economy. Guidehouse characterises the transformation in the energy sector as the emergence of the Energy Cloud. The Energy Cloud represents the shift away from centralised energy generation and distribution toward a highly distributed, networked and dynamic grid in which distributed energy resources, building-to-

grid, transport-to-grid, transactive energy, and city energy systems all play a role. This energy sector transformation provides the bedrock for the creation of the zero-carbon cities of the future.

Building back better Accelerating the energy transition also oﬀers cities an attractive route to building back better in the wake of the coronavirus pandemic. Cities can combine decarbonisation and economic programmes to create jobs and ensure all communities share in the beneﬁts. And they can work with the energy sector to achieve their sustainability and recovery goals by: Accelerating the shift to renewable energy: Cities are increasingly proactive in setting targets for their power utilities to shift from fossil fuels to renewable energy in generating electricity to help meet carbon emissions targets. Many are now embedding these goals in their pandemic recovery programmes.

www.the-eic.com | energyfocus

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07/10/2020 15:48

Power: Smart cities

A shifting energy landscape

There are many opportunities for the energy sector to engage in city sustainability and innovation programmes

Building smart, sustainable and resilient cities

Approximately Driving the adoption of smart grid technologies: Support for renewable generation by city authorities increases the pressure on utilities to deliver an infrastructure that can integrate these new resources in a manageable way and accelerates other changes in a city’s energy services. Investment in new grid infrastructure will be essential to help manage the shift to renewable energy and to increase the resilience of power networks during extreme weather events. Boosting energy efficiency initiatives: Collaboration between city departments and local energy utilities to improve energy efficiency is one of the simplest, most effective measures for reducing a city’s energy footprint. Coordinating programmes for energy efficiency improvements is an obvious step and enables cities and utilities to target the most appropriate residents, businesses and communities for retrofit and rebate programmes. It is also a way to create local jobs and build skills in economically disadvantaged communities. Increasing resilience: City goals and energy sector programmes also intersect in the need to build more resilient communities. Resilience is increasingly important as the impact of extreme weather events and other consequences of climate change became evident. Resilience is not just a question of identifying and acting on specific impacts. It also requires an assessment of a city’s complex and interconnected infrastructure and institutional systems that span the physical, economic, institutional and sociopolitical environment. Energy systems are at the heart of this complex web of

infrastructure interdependencies. A failure in the electricity network can have a dramatic impact on water, sewerage, health, communication and transportation systems.

2.5 billion more people will be living in cities

2030

placing extra demands on resources and services

There are many opportunities for the energy sector to engage in city sustainability and innovation programmes. Energy players and their partners looking to develop or expand their city activities should focus on the following steps: Engaging with local smart city stakeholder groups and leadership teams, and actively participating in the development of low-carbon city strategies. Energy companies can help chart viable programmes to turn ambitious city energy and emissions targets into reality. Delivering benefits for all communities. Energy providers have a unique connection to all city residents, which provides a strong basis for furthering community goals around social equity and helping improve and redefine customer relationships. Creating platforms for the delivery of new energy services that can also be a launchpad for innovative urban service offerings. Holistic thinking enables existing assets and services to become a base for expansion into other areas. Building partnerships between energy providers and technology companies. The combination of sector and service knowledge with technology leadership and innovation is a strong proposition. Establishing themselves as key orchestrators of new urban energy platforms and the ecosystems they support. Playing a central role in these new networks is key to the development of new services and business lines in the city of the future. The energy sector has a responsibility and an opportunity to work even more closely with local governments to ensure that more resilient, more sustainable, and more equitable cities emerge from the current crisis. By Eric Woods, Research Director for Smart Cities, Guidehouse Insights

24 energyfocus | www.the-eic.com

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Smart cities: Power

Building from the ground up Although technology is available to reduce city running costs, cut resource consumption and improve service delivery, retrofitting existing urban infrastructure is more complicated and expensive than building from scratch. The pandemic continues to affect the pace of developments, but there are more than 120 new cities currently being built in 40 nations around the world. Below are five futuristic smart cities to track during the 2020s. New Administrative Capital, Egypt Egypt is busy building its new capital, designed to be the country’s new administrative hub and home to more than 6.5 million residents across 700km2. The vision includes smart monitoring of traffic congestion and accidents, smart utilities to reduce consumption and cost, smart buildings and energy management – including a focus on renewable energy and using IoT to save power consumption – and optical-fibre infrastructure connecting every building using FTTX technology. There are also plans for a 90km2 solar farm and to make the capital the first cashless city in the country. Projected costs are around US$44–50bn. Woven City, Japan Toyota plans to transform a 708,200m2 site in Japan into a ‘prototype city of the future’, powered by hydrogen fuel cells, solar panels and geothermal energy. Dubbed ‘Woven City’, the urban incubator is expected to serve as a ‘living laboratory’, where residents will test modern technology such as autonomy, personal mobility, smart homes, robotics and

Forest City, Malaysia

artificial intelligence in a real-world setting. The city will initially house 2,000 residents. A ground-breaking ceremony for the project is expected to be held in early 2021. Forest City, Malaysia Malaysia’s new US$100bn city development (pictured below) is being promoted as a ‘smart and green futuristic city that combines environment, technology and cutting-edge technology to create an ideal, idyllic and technology-driven living and working space ecosystem’. Forest City is explicitly being designed as an eco-city, with buildings covered in plants and roads free from parked cars. It will be built on four artificial islands in the Straits of Johor, the thin strip of water between Malaysia and Singapore. In total, these will offer up 14km2 of reclaimed land. Neom, Saudi Arabia Powered by solar and wind energy, Neom is expected to be completed by 2030, housing one million people and costing US$500bn. The 5G ‘living laboratory and a hub for innovation’ will

incorporate high tech and digital industries such as robotics and AI. Other features will reportedly include an artificial moon, phosphorescent beaches and flying taxis. With plans for the world’s largest green hydrogen plant, Saudi Arabia is seeking to make Neom a global centre for green hydrogen and renewable energy as a whole. The 26,500km2 mega city will be around 17 times the size of London. Belmont, Arizona, US Since Bill Gates purchased 24,000 acres of land outside of Buckeye, Arizona in 2017, there has been limited information on the billionaire’s plans to build Belmont – a proposed smart city, with 80,000 homes, schools, offices and retail sites. According to reports, Belmont will create ‘a forward-thinking community with a communication and infrastructure spine that embraces cutting-edge technology’. The development will incorporate high-speed digital networks, data centres, new manufacturing technologies and distribution models, autonomous vehicles and autonomous logistics hubs.

Big data will drive smart city innovation says Jon Kirkpatrick, COO at Connected Places Catapult The density of demand in cities offers an opportunity to drive innovation and uptake of new services, not just in the energy sector but across a whole swathe of city living: its transport system, built environment, public spaces and population can all become an interconnected system that dynamically responds to optimise economic, environmental and health benefits. The key to this is data-driven decision-making: the use of IoT, ubiquitous computing, advanced data analytics and Digital Twinning to explore in near-real-time how decisions will play out across different domains and optimise decisions for the greatest good. The technology already exists but needs to be applied to the place context. For example, the Digital Twins used by Rolls Royce for remote engine management can be applied to optimise energy consumption in buildings. Extending this to neighbourhood level allows intelligent decisions on building design and microgeneration to move whole districts towards net zero. The hurdles are not technological but related to business models and culture: meaningful change will require the sharing of data between organisations and domains (e.g. energy systems and buildings management). This, in turn, will require common standards for data, a shift towards sharing by default, and increased willingness among organisations to adopt data-driven insights (especially when the data is generated outside the organisations). Another barrier is legacy infrastructure, which often does not have the sensing or remote management capabilities needed to make the city smart. Infrastructure operators are beginning to work closely with technology providers (some transferring from other sectors or disruptive start-ups) to make intelligent decisions about where to invest in retrofitting technologies and where to wait for the next planned maintenance cycle to invest in upgrading infrastructure. Ongoing work at, for example, the Centre for Digital Built Britain, Connected Places Catapult, DCMS and i3P, is building up significant momentum towards this dynamic digital future.

www.the-eic.com | energyfocus

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07/10/2020 15:48

Nuclear Decommissioning

The UK offers capability and expertise across the entire nuclear lifecycle, from design to decommissioning and waste management. With 51 new reactors under construction and more than 30GW slated for shutdown in the next 10 years, UK firms are well set to capture significant market share, writes Rodney Berkeley at the Department for International Trade

ith climate change, decarbonisation and COVID-19 throwing the importance of a secure and reliable energy supply into sharp relief, nuclear energy will be a key energy source for decades to come. The World Nuclear Association estimates that, by 2040, nuclear generation capacity is likely to grow between 170–370GW, representing valuable nuclear new build opportunities. At the back end of the lifecycle, meanwhile, many of the existing international ﬂeet of more than 400

Make your move into

US$250bn global decom market 26 energyfocus | www.the-eic.com

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Decommissioning: Nuclear

MAJOR PROJECTS TO WATCH Bulgaria

There is a pipeline of projects across Central Europe

Kozloduy Nuclear Plant Decommissioning and National Waste Repository Value: US$2bn Stage: Engineering, preparation, removal and disposal (EPRD) Status: Contract awarded Operator: Bulgarian Energy Holding

Germany

nuclear power reactors are approaching the end of their lifetimes and will require either plant life extension or decommissioning. Looking at advanced nuclear technologies, the potential beneﬁts of small and advanced nuclear reactors are becoming more widely recognised. Small modular reactors alone are set to have an estimated global market value of £250–400bn just for electricity production by 2035, and progress continues on large and small scale fusion projects.

Exporting British expertise The UK has capabilities across the nuclear supply chain, with particular strengths in

decommissioning and waste management. This means there is a fantastic opportunity to export British expertise across the globe. The Department for International Trade (DIT) helps companies to take advantage of such prospects by providing strategic market development and export delivery support. DIT currently has nine priority market campaigns (agreed with UK industry): Canada; Central Europe and Finland; hina; France; Germany and Sweden; Japan; the Middle East; Ukraine; and the US. Although these markets are at varying stages in their nuclear journey, all involve some aspect of waste management or

Mülheim-Kärlich Nuclear Power Plant Decommissioning Value: US$1bn Stage: EPRD Status: Contract awarded Operator: RWE

Japan Fukushima Daiichi Nuclear Power Plant Decommissioning Value: US$24bn Stage: EPRD Status: Contract awarded Operator: Tokyo Electric Power Company (Tepco)

Lithuania Ignalina 1 & 2 Nuclear Power Plant Decommissioning Value: US$3690m Stage: Feasibility Status: Planning Operator: Ignalina NPP

Slovakia Bohunice V1 Nuclear Power Plant Decommissioning Value: US$1bn Stage: EPRD Status: Contract awarded Operator: Jadrova a Vyradovacia Spolocnost AS (JAVYS)

IMAGE: GETTY

Sweden Ringhals Nuclear Power Plant Decommissioning Value: US$1bn Stage: Feasibility Status: Planning Operator: Ringhals AB To identify more opportunities for global growth, track international projects across all energy sectors with EIC DataStream. Further details can be found at: www.the-eic.com/MarketIntelligence/ EICDataStream

www.the-eic.com | energyfocus

26-28 nuclear decom_Autumn 2020_Energy Focus 27

07/10/2020 15:49

Nuclear: Decommissioning

decommissioning for future business growth. Some speciﬁc examples include:

Germany and Sweden Germany and Sweden are markets of particularly high interest. Both countries have sizeable funded waste management and decommissioning programmes, but local industrial capacity constraints and gaps present various short, medium and long-term opportunities to British companies, especially around integrated waste management, which plays to the UK’s strengths. These markets are also attractive for UK companies, as doing business is relatively straightforward and high levels of market intelligence help target where UK capability and experience can best support programmes. DIT has established a working group that facilitates collaborative working for UK companies that have an interest in Germany and Sweden decommissioning markets. This working group is a forum for companies across the supply chain to come together to identify and assess opportunities, and to form collaborations, joint ventures and other groups in pursuit of contracts. In doing so, they overcome the challenges posed by fragmented approaches to opportunities, enhancing credibility with potential customers and partners overseas and improving the chances of winning work.

Central Europe There is a pipeline of projects across Central Europe. Despite the presence of

Thinking of going global? Get help from... Department for International Trade (DIT) Email: civilnuclear@trade.gov.uk

EIC London The EIC London team is on hand to help kickstart your export journey Email: info@the-eic.com

UK Export Finance (UKEF) www.gov.uk/government/publications/ﬁnd-anexport-ﬁnance-manager

legacy Russian technology, which can act as a market barrier, and diﬀering local historical, political and cultural relationships with nuclear power, there are many commonalities across the countries in the region – notably, waste issues and spent fuel transport and storage challenges. Romania and Hungary represent considerable opportunities for the UK to employ their experience in nuclear waste management. In terms of dismantling and decommissioning, Lithuania is a signiﬁcant market for UK companies to use their expertise and bid for major tenders to dismantle two RBMK-1500 reactors at Ignalina NPP. There is also ongoing decommissioning work at Kozloduy in Bulgaria and Bohunice in Slovakia, which are both part of European Bank for Reconstruction and Development (EBRD) funded work.

The US The US is a sizeable market with a signiﬁcant decommissioning programme. Although there is a high level of domestic capability, the close historical relationship between the UK and the US means there is the potential for a collaborative approach to waste management and decommissioning. DIT’s trade development visit to the US in March 2020 sought to assess the level of nuclear trade opportunities, and identiﬁed opportunities for the UK supply chain in the Department of Energy legacy decommissioning sector, as site requirements have similarities to the UK programme. Having a US partner at tier one level, or through supplying via the broader US supply-chain at tier two or three level, will strengthen business propositions. However, there are some contracting barriers for non-US entities at these sites, including security-related issues that UK companies should be aware of when reviewing tenders.

Japan Japan is fast becoming the largest nuclear decommissioning and waste management market in the world behind the US, with 24 reactors now in the process of being decommissioned. Since the Fukushima Daiichi accident in 2011, the UK government

has been working even more closely with the Japanese authorities to assist them in tackling their complex decontamination and decommissioning challenges. Decommissioning is not new to Japanese companies, and they continue to dominate the market. However, there are niche areas of opportunity in which UK-based companies – adapting lessons learned from solving similar decommissioning challenges at UK sites – are uniquely positioned to add value. British companies have found success in developing bespoke technology solutions, including long reach manipulator systems for fuel debris retrieval, and in assisting operators progressing plans for standard decommissioning. A number of companies have already opened offices in Japan and employed local staff, quickly absorbing the uniqueness of the Japanese business culture. DIT staff in the UK and Japan regularly organise business engagement events with EIC and other key stakeholders, including our annual UK–Japan Industry Forum in Tokyo.

Set for global success With these and other markets embarking on decommissioning programmes and tackling waste management challenges, the UK is in a unique position to use the extensive experience and expertise it has developed over several decades to boost exports to these countries. This can be further enhanced by making use of DIT and EIC support, and adopting an approach that takes into account speciﬁc market features and requirements. By Rodney Berkeley, Director, Energy and Infrastructure, Department for International Trade

28 energyfocus | www.the-eic.com

26-28 nuclear decom_Autumn 2020_Energy Focus 28

07/10/2020 15:49

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06/10/2020 12:24

Renewables Wave and tidal energy

Turning T the tide on marine energy Oceans are an abundant source of energy which can support a global energy transition and drive a blue economy. However, a clear and accessible route to market is required, writes Eileen Linklater at the European Marine Energy Centre

(This page) Green Marine install Wello Penguin at EMEC wave test site at Billia Croo

he World Energy Council estimates that 2TW of energy, the equivalent of twice the world’s electricity production, could be harvested from the oceans – providing 15–20% of the UK’s electricity needs. There is massive economic potential in marine energy too, with the UK well placed to exploit it and help a green recovery postCOVID-19. Estimates say tidal stream technology could generate £1.4bn in beneﬁts for the UK economy by 2030, while wave energy could add £4bn and around 8,100 jobs by 2040. It is likely that the majority of those beneﬁts would land in the peripheral UK communities where wave and tidal stream energy development and deployment is focused. Additionally, marine energy represents an opportunity to bridge the gap between UK innovation and application, and reverse the trend where our home-grown technology generates billions of dollars and skilled jobs for overseas companies. Wave and tidal stream are the only renewable sectors where the UK can still take a primary position as the lead global developer of the technology.

Making waves A total of 22 tidal stream and 23 wave technology developers are active in the UK marine energy sector, with an estimated investment to date of more than £500m of private capital, as well as £70m of direct public support. These developers are based throughout the UK, with

(Right) Graphic of O2 turbine

30 energyfocus | www.the-eic.com

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Wave and tidal energy: Renewables

MAJOR PROJECTS TO WATCH deployment centred on Scotland, Wales, Northern Ireland and the South West and South Coast of England. The progress that has been made by wave and tidal stream technology developers has been hard-won, with many admirable ﬁrsts achieved along the way. However, the sector is now at a critical stage, and needs to increase scale and make the ﬁnal step to commercial deployment.

leading grid-connected wave and tidal energy test and demonstration centre, and has hosted 20 wave and tidal energy clients (with 32 marine energy devices) across 11 countries. A highly skilled local supply chain, supporting more than 200 jobs, has also built up around EMEC and the R&D activity undertaken at its wave and tidal facilities in the Orkney Islands. That supply chain has been instrumental in helping British tidal energy developer Orbital Marine Power realise its ambitions. The company is one of EMEC’s longest-standing clients, most recently deploying its SR2000 at EMEC’s Fall of Warness tidal test site. With a rated capacity of 2MW, the SR2000 was the world’s most powerful tidal turbine. In 12 months of continuous generation into the Orkney grid, the prototype turbine exported more than 3GWh of renewable electricity. The SR2000 was removed from site in September 2018 to make way for the build and installation of the optimised 2MW ﬂoating tidal turbine the Orbital O2, due to be installed at EMEC in 2021. Orbital Marine Power works with around 24 suppliers from throughout the UK, including local supplier Green Marine and various companies based in post-industrial areas in need of regeneration, and from gas and maritime sectors wishing to diversify and adapt. In this way it provides a case study on the positive impact of marine energy on areas needing to level up. With the right support, wave and tidal stream energy could make valuable contributions to reaching net-zero targets, UK energy security, the levelling up agenda,the green economic recovery and the rejuvenation of domestic energy technology production, all while maintaining UK world leadership with a huge global export potential.

22 tidal stream and 23 wave technology developers are active in the UK marine energy sector

IMAGE: COLIN KELDIE, COURTESY OF CEFOW / ORBITALMARINE

Seizing the opportunity Funding is the greatest obstacle. The sector needs revenue support, with higher payments than the standard market rate. The industry has had to compete for revenue support with proven technologies such as offshore wind in Pot 2 of the UK government’s Contract for Difference funding auction rounds, managed by the Department for Business, Energy and Industrial Strategy (BEIS). This approach is not suitable for wave and tidal stream technology developers at the first stages of development, when they just want to deploy early generation devices and arrays. To help clear a route to market, the UK Marine Energy Council has proposed an Innovation Power Purchase Agreement (IPPA) – ¬ model that provides a framework for technology developers to reach commercial readiness while focusing on and rewarding a rigorously regulated cost reduction trajectory. Under the scheme, a developer would sell electricity at higher than the market price set by BEIS. The buyer would then be able to reclaim the whole of the excess cost against tax in the form of a rebate or tax credit. The IPPA would only reward success; a technology that did not produce power would not be paid, and those that could not reduce costs would not progress.

Delivering UK ambitions Established in 2003, the European Marine Energy Centre (EMEC) remains the world’s

By Eileen Linklater, External Relationship Manager, EMEC

Morlais Tidal Energy Project Value: US$380m Stage: Pre-FEED Status: Planning consent applied Startup: 2023 Operator: Menter Môn Ada Foah Wave Power Project Value: US$200m Stage: EPC Status: Contract awarded Startup: 2023 Operator: TC’s Energy Raz Blanchard (Normandy) Tidal Array Value: US$200m Stage: Feasibility Status: Planning Startup: 2023 Operator: Normandie Hydroliennes Inner Sound Tidal Energy Project Value: US$150m Stage: Multi contract Status: Contract awarded Startup: 2024 Operator: MeyGen Pempa’q In¬stream Tidal Energy Project Value: US$120m Stage: Conceptual design Status: Contract awarded Startup: 2022 Operator: reconcept GmbH Lanzarote Wave Energy Project Value: US$100m Stage: Feasibility Status: Planning Startup: 2022 Operator: Enzen Tidal Energy Farm Sound of Islay Value: US$75m Stage: Multi contract Status: Contract awarded Startup: 2023 Operator: SIMEC Atlantis Energy Ltd.

To identify more opportunities for global growth, track international projects across all energy sectors with EIC DataStream. Further details can be found at: www.the-eic.com/MarketIntelligence/ EICDataStream

www.the-eic.com | energyfocus

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Renewables North Sea Wind Power Hub

Energy islands take offshore wind to the next level Cross-border offshore wind hubs with connections to more than one country will save money and space, and improve energy flows across Europe, says TenneT’s Michiel Müller

urope’s energy system is changing. The transition to clean and renewable energy is well under way, with offshore wind slated to play an instrumental role in helping us reach energy and climate objectives for 2030 and 2050. However, annual installation rates will have to scale up considerably in the coming years if we are to reach the European Commission’s goal of having up to 450GW of offshore wind power in 2050. The vast potential of the North Sea could contribute in a significant way to this increased and accelerated deployment, but international collaboration and a visionary approach are needed. The European Commission has stated that 150–400GW of offshore wind will be necessary to deliver climate neutrality by 2050, with a growth rate of 3–15GW per year between 2031 and 2050. Long-term scenarios set out a range of 70–50 GW of future deployment of offshore wind power in the North Sea as early as 2040.

Unlocking North Sea potential To accelerate the connection and integration of large scale oﬀshore wind in the North Sea, a consortium of transmission system operators – TenneT (the Netherlands and Germany), Energinet and Gasunie – has joined together to develop the North Sea Wind Power Hub (NSWPH) programme. The NSWPH proposes an internationally coordinated approach that is based on a total

energy system view and integral energy infrastructure planning across national borders and energy sectors, and using hybrid infrastructure assets. Based on a ‘hub-and-spoke’ concept, oﬀshore wind farms (built to location-speciﬁc needs) will connect to one or several hubs via alternating current cables. The power is converted into direct current electricity by converters on the hub islands before being exported by a series of interconnectors (the ‘spokes’) to connecting North Sea countries.

North Sea Wind Power Hub

2030 Start roll-out of

10-16GW 180GW hubs

oﬀshore wind by

2045

The project may also use power-to-gas technologies on the hubs to convert oﬀshore wind-generated power into hydrogen, which would then be exported via new and existing gas pipelines. To meet the COP21 Paris Agreement commitment, the NSWPH plans for a gradual roll-out of 10–16 GW-sized hubs to facilitate the oﬀshore wind roll-out towards 2050.

A step closer to reality To this end, the consortium has intensified its efforts to help solve the integration challenge. In a range of studies, it further examined the optimal technical design for a first hub-andspoke project, both for offshore transmission infrastructure and the onshore grid connection concept. These studies are guided by the consortium’s work on the long-term drivers of the energy system transition as a whole, focusing on electricity, e-fuels, sector coupling, flexibility and storage. The consortium continues to proactively engage with stakeholders to initiate discussions regarding the market design and regulatory framework – a solid integration route will be crucial for creating the right investment climate and to develop the necessary European infrastructure effectively for the longer term. The Projects of Common Interest (PCI) status of NSWPH – as approved in the fourth PCI list by the European Parliament earlier this year – underlines the value of the programme and enables the NSWPH consortium to develop the concept further and bring it closer to realisation. A first hub-and-spoke project could go into operation in the early 2030s. By Michiel Müller, Programme Manager North Sea Wind Power Hub, TenneT

32 energyfocus | www.the-eic.com

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EIC Member Focus McMENON

MY BUSINESS

Anand Puthran, McMenon Engineering Services i McMenon mantra. During this crisis, we have continued to invest in product development, including six self-funded projects that we anticipate will increase sales in the coming months. Supporting apprentices, despite market challenges, is another commitment we believe will prove fruitful. We have added two more young people to the team, taking the number of apprentices to eight. We also created a work placement opportunity for a 2020 graduate.

What’s a typical day like at McMenon? The majority of products manufactured at McMenon are engineered-to-order, which makes accurate forecasting and capacity planning a challenge. A typical day involves discussions, decisions and implementation of decisions within various departments, including sales, product development, engineering, documentation, planning, procurement, manufacturing, quality, HSE and logistics. What makes it all impressive is the seamless integration of assembly, fabrication, machining and calibration departments, each of which could eﬀectively serve as a business in their own right. What’s been McMenon’s biggest highlight to date? McMenon Engineering Services acquiring ABB’s Workington-based product manufacturing site, with a 70-year heritage, in 2018. For a start-up to purchase a division of a multinational is an exceptional feat. If you hadn’t founded McMenon, what would you have done instead? I would have continued in an executive management role with ambitions to lead a large or multinational organisation. Post-corporate, I’d very much like to be involved in agriculture and also serve as a

CEO and Founder Anand Puthran takes Energy Focus behind the scenes at McMenon lecturer in entrepreneurship, supporting the aspirations of young minds. How have you been able to maintain good mental health and wellbeing in the workplace amid COVID-19? Our focus is on ensuring business continuity with safe operations as per government guidelines. We acted ahead of the curve, planning and implementing appropriate measures even before any government guidelines were published. We focus our eﬀorts towards the safety, health and mental wellbeing of colleagues through empathy and empowerment. What are you still investing in during these challenging times? ‘Investing in innovation and next generation’ is a

What advice would you offer companies looking to break into new markets and grow internationally, especially at this time with Brexit and COVID-19? COVID-19 has caused such unprecedented disruption to the majority of the businesses that Brexit isn’t even a consideration in comparison. Despite the setbacks, astute business leaders will have trained their focus to maximise the potential of the digital world. I’d urge anyone that hasn’t done so to unlock the enormous potential of digital solutions. The pandemic has expedited the shrinking of the business network world into our offices and homes. Affordable technology and communication tools, literally in your palms, have changed the business game. Exploit the disruption using technology, innovation and creativity. What’s next for McMenon? Growth by acquisition has always been part of McMenon Group’s strategy. We are broadening the scope of acquisition objectives, targeting new technological solutions to further diversify our future revenue mix. We are prepared to rise to all the challenges – whatever they may be.

IMAGES: GETTY

Can you tell us a little bit about McMenon? McMenon Engineering Services specialises in the design and manufacture of differential pressure flow meters, variable area flow meters and temperature monitoring equipment. We manufacture around 16,000 products a year, which are in service in more than 60 countries. In a joint venture, and with valued support from the UK Department for International Trade, we recently launched a manufacturing site in the Middle East to complement our Workington facility.

34 energyfocus | www.the-eic.com

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