Can the world’s largest floating offshore wind farms help the North Sea oil industry to cut carbon emissions? Should they?

LONDON, 12 July, 2021 – In one sense it is a renewable energy scheme that ticks all the wrong boxes. The idea is to help the North Sea oil industry survive longer by saving oil rigs money.

In another way the development is a great leap forward. Altogether 200 turbines are planned in two offshore wind farms that, without any public subsidy, will produce as much power as three large nuclear power stations.

The floating farms will be able to provide the forest of oil platforms in the North Sea with all the electricity they need, and also to produce surplus energy to supply large amounts of green hydrogen for sale.

The developer, Cerulean Winds, believes the key to the scheme’s success lies in the oil industry’s current need to use expensive gas piped to its platforms to generate the electricity needed to light and power its operations and pump the oil ashore. By selling the industry cheaper wind energy, it judges that it can make a profit without government subsidy, thereby avoiding months of negotiation and red tape.

Hearts and minds

Electricity generated direct from floating turbines near the oil fields would both undercut the current cost of generation and substantially reduce the carbon footprint of the offshore oil industry – something the industry has pledged to do and is desperate to achieve, to avoid not only further public opposition, but also carbon taxes.

The platform operators are committed to reducing their carbon emissions by 10% by 2025 and 25% by 2027, so buying carbon-free electricity would be a significant help.

The project will cost £10 billion (US$13.8bn), and the developers hope to be installing the turbines by 2024-2026, an ambitious timetable for such a huge project compared with the 10-20 years needed to plan and build a nuclear power station.

One farm will be sited in the Central Graben area of the North Sea, almost halfway to Norway, and the second west of Shetland.

“The UK oil and gas industry’s emissions have to be cut significantly to make production greener”

The development will far exceed the UK’s current target of 1GW of floating wind power by 2030. If it is successful it will cut installation costs substantially, paving the way for even bigger projects. Cerulean says it wants to install 14 to 15MW turbines – far larger than anything currently deployed.

One key aspect of the project is its ability to produce more power than the oil platforms will need, with the surplus going to produce green hydrogen (using electrolysis to split water into hydrogen and oxygen) for which there is a growing market.

Green hydrogen’s problem has been that it is more expensive than hydrogen produced from fossil fuels, so-called grey hydrogen, which is carbon-intensive and needs unproven carbon capture and storage technology to make its production acceptable to the environment movement.

The future of what is called the hydrogen economy is still uncertain, but Cerulean predicts it will be able to produce enough green hydrogen to yield export potential worth £1bn.

Race against time

It says speed is essential for the project because its success depends on selling its electricity to the oil industry in time to for that to reach its carbon reduction targets. So it has already submitted proposals to the Scottish Government for seabed leases.

The dubious carrot it is offering the UK and Scottish governments is the prospect that it can help to keep the North Sea oil and gas industry producing fossil fuels for longer. Cerulean believes that if the industry can avoid carbon taxes and penalties for its emissions, it will be able to continue production.

Dan Jackson and Mark Dixon, the founders of the company, are industry veterans. Jackson says the UK has world-leading targets for the energy transition but needs a sense of urgency and “joined-up thinking.”

If oil platforms do not cut their pollution by the mid-2020s, he believes, increased emission penalties through carbon taxes will see many North Sea fields becoming uneconomic and facing shut-down.

Greener production?

“That would seriously compromise the UK oil and gas industry’s role in home-grown energy security,” he says. “It must remain a vital element in the transition journey for decades to come, but emissions have to be cut significantly to make the production greener.”

Cerulean says many of the current 160,000 jobs would be protected by its plan, with potentially 200,000 new roles in the wind and hydrogen industry within five years.

It is, many energy analysts would say, a brave company, perhaps even a foolhardy one. Not only are most climate scientists adamantly opposed to the continued use of fossil fuels. So too, increasingly, is the market. From that perspective, Cerulean’s joined-up thinking may very soon need to stretch a whole lot further. – Climate News Network