North Sea oil and gas sector eyes wind power refit to curb emissions

UK floating wind project Green Volt is set to help curb emissions from North Sea oil and gas facilities from 2029 after winning a Contract for Difference from the government this month, one of several projects aimed at providing clean power to upstream platforms and giving them a new lease of life.

The GBP2.5 billion ($3.3 billion) project achieved a CFD equivalent to GBP193.00/MWh for 400 MW of capacity at this month's auction. The developer hopes to scale up to 560 MW, with up to 35 turbines, Barry Macleod, general manager at project partner Flotation Energy, told the OEUK Conference 2024.

A number of such projects aim to help curb emissions from upstream oil and gas facilities -- thought to account for 3.5% of UK emissions -- as the sector comes under intense scrutiny.

The wind projects are designed for a shelf-life beyond oil and gas, amid rapid decline in UK output; oil production was down 9% on the year in the second quarter at 642,000 b/d. The sector is playing catch-up with Norway's build-out of grid and renewable connections to upstream platforms.

New UK Secretary of State for Energy Security and Net Zero Ed Miliband reiterated this week true energy security can only be achieved through UK renewables, describing oil and gas as a source of volatility.

CNOOC's Buzzard oil platform -- a source of Forties blend -- is one facility that may be supplied by Green Volt, according to an environmental impact assessment. A CNOOC spokesperson said, however: "No decisions have been made. CNOOC continues to explore options to decarbonize Buzzard's electrical power supply."

Green Volt will supply both the UK grid and oil and gas facilities, with the latter able to draw on power by cable from the shore at times of low wind, Macleod said.

"It's this demand for oil and gas electrification [that] has driven this early need for floating wind," he told the OEUK conference Sept. 17 in Aberdeen.

Green Volt is being developed by UK company Flotation Energy and Norway-based Vargronn, owned partly by Italy's Eni. The project was awarded seabed rights in 2023 under a Scottish lease round focused on curbing upstream emissions: the Innovation and Targeted Oil & Gas round.

The need to maintain oil and gas jobs was emphasized at the event by Scottish climate action minister Alasdair Allan, underscoring a recent shift in Scottish politics in favor of the legacy North Sea industry.

Flotation Energy's Macleod said: "We see the Green Volt project as the next evolution of applying floating offshore wind to support decarbonization. By combining a connection back to the national grid it will provide full security of supply even on days when the wind isn't blowing."

"Our solution is having a cable back to shore and a grid connection to provide that full security," he added.

Regulator support

The project got a thumbs up from the CEO of regulator the North Sea Transition Authority, Stuart Payne, who said Green Volt "came about in part through a desire to decarbonize oil and gas production."

"It's a brilliant example of exactly the kind of integrated energy system we will need to develop," Payne said.

A larger floating wind project -- the North Sea Renewables Grid -- is being developed by Cerulean Winds, which hopes to develop three inter-connected sites -- each of 1 GW initially -- targeted partly at upstream oil and gas facilities. The site leases were awarded in 2022 and the first, known as Aspen, should come on line in 2028, Laura Jarvie, Cerulean Winds' Scotland head, said.

The goal is not just to replace existing power supply at oil and gas platforms -- typically derived from gas or diesel -- but to increase the amount of power available for technologies for boosting oil and gas recovery, she said.

Approval for the design was given by a National Grid board in recent days, providing certainty that "infill" power will be available to upstream operators when wind levels are low, she told the OEUK event.

"The development will -- through AC transmission connected to the national grid -- take power from shore to ensure 100% power availability to oil and gas," Garvie said. "The initial phase of the Aspen site development will dedicate up to 200 MW of power to oil and gas with the remaining 800 MW exported to shore, expected to be under a CFD."

"Given the maturity of our [oil and gas] sector this needs to happen as early as 2028 and certainly by no later than 2030," she added.

OEUK earlier released a report showing the upstream oil and gas sector had cut its emissions by 28% since 2018 and is ahead of target on plans to reduce emissions by 50% by 2030.

Various operators have their own projects. Mature field specialist EnQuest plans to replace diesel generation at its Kraken heavy oil field by tapping gas from a nearby undeveloped field, Bressay, and also plans to test combustion of hydrogenated vegetable oil.

A standoff continues over the government's plans to increase the upstream tax rate and remove investment allowances, as well as end issuance of new North Sea licenses.

The Platts Dated Brent benchmark, from S&P Global Commodity Insights, was assessed at $74.72/b on Sept. 17.