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June 2023 • Volume 16 • No 4 • Published monthly • ISSN 1757-7365

THE ENERGY INDUSTRY TIMES is published by Man in Black Media • www.mibmedia.com • Editor-in-Chief: Junior Isles • For all enquiries email: enquiries@teitimes.com

Special Technology

Supplement

Different strokes for

different folks

Recyclable blades and

HVDC technology are crucial

to Europe’s offshore wind

programme. Page 8

Offshore wind is one of the fastest growing

forms of clean energy globally but different

regions are on different paths. Page 14

News In Brief

Challenges ahead for US

proposals to limit power

plant emissions

A new proposal to cut greenhouse

gas emissions from fossil fuelled

power plants looks set for legal chal-

lenges, as fossil fuel lobbyists argue

that carbon capture and storage has

not been adequately demonstrated.

Page 2

Colombia announces plans

for offshore wind auction

Colombia has announced that its

rst auction for offshore wind en-

ergy generation projects will be

ready in August.

Page 3

Wind to play major role in

Vietnam Power Development

Plan

Vietnam has approved its National

Power Development Plan VIII

(PDP8), notably including big plans

for wind power generation.

Page 4

EU states cut both demand

and fossil fuel use last

winter

Nearly every EU state reduced en-

ergy demand last winter and renew-

ables generated more than fossil

fuels for the rst time ever, accord-

ing to energy think-tank Ember.

Page 5

Green shoots for wind

turbine manufacturers?

Wind turbine manufacturers are be-

ginning to see improved nancial

results, as the impact of global head-

winds appears to be easing.

Page 7

Industry Perspective: Energy

security vs decarbonisation

Medium and longer-term solutions

are emerging for the converging and

conicting challenges of energy se-

curity and decarbonisation.

Page 13

Technology Focus: Saving

geothermal from being an

afterthought

Deep-well, closed-loop energy trans-

fer could drive renewed interest in

geothermal energy.

Page 15

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Investment in clean energy is outstripping that in fossil fuels at an increasing pace, according

to the International Energy Agency’s latest World Energy Investment report. The agency

notes, however, that oil and gas companies could do more. Junior Isles

Prospect of deal on fossil fuel phase-out under threat

THE ENERGY INDUSTRY

TIMES

Final Word

We need more than

beautiful words,

says Junior Isles. Page 16

The clean energy economy is emerging

faster than expected, with investment

in clean technology now almost double

current spending on fossil fuels, ac-

cording to a new report from the Inter-

national Energy Agency (IEA).

According to the Paris-based agen-

cy’s latest ‘World Energy Investment’

report, $2.8 trillion is set to be invest-

ed globally in energy in 2023, of

which more than $1.7 trillion is ex-

pected to go to clean technologies –

including renewables, electric vehi-

cles, nuclear power, grids, storage,

low-emissions fuels, efciency im-

provements and heat pumps. The re-

mainder, slightly more than $1 tril-

lion, is going to coal, gas and oil.

Commenting on this trend, IEA

Executive Director, Fatih Birol said:

“I had the opportunity to address the

G7 leaders in Hiroshima, Japan, with

regards to energy and climate issues.

We shared many things but the main

idea was that a new clean energy

economy is emerging, and emerging

must faster than many realise. Five

years ago, the investment in all energy

sources was about 2 trillion – $1 tril-

lion for fossil fuels and $1 trillion to

clean energy. Five years ago the ratio

of fossil fuels [investment] to clean

energy was 1:1, this year it is 1:1.7 in

favour of clean energy. In my view,

this is a dramatic shift.”

Driven by factors such as the falling

cost wind and solar; government poli-

cies adopted as a result of the energy

crisis brought on by the war in

Ukraine; and industrial strategies

around the world designed to boost

home-grown manufacturing of clean

equipment, the IEA expects clean en-

ergy investment to rise by 24 per cent

between 2021 and 2023. Spending on

fossil fuels is expected to increase by

15 per cent.

Low-emissions electricity technolo-

gies are expected to account for al-

most 90 per cent of investment in

power generation. Consumers are also

investing in more electried end-uses.

Global heat pump sales have seen

double-digit annual growth since

2021. Electric vehicle sales are ex-

pected to leap by a third this year after

already surging in 2022.

Solar was hailed by the IEA as the

“shining star” of the global energy in-

vestment landscape. According to IEA

forecasts, solar power investment is

set to outstrip spending on oil produc-

tion this year for the rst time.

Spending on upstream oil and gas is

expected to rise by 7 per cent in 2023,

taking it back to 2019 levels. The few

oil companies that are investing more

than before the Covid-19 pandemic

are mostly large national oil compa-

nies in the Middle East.

Birol expressed disappointment at

the level of re-investment into clean

energy by the oil and gas sector, de-

spite them seeing record revenues last

year as a result of high energy prices

Continued on Page 2

Talks aimed at setting a deadline to

phase out fossil fuels at this year’s UN

COP28 climate change summit in

Dubai in December look set to face

serious headwinds under the UAE

presidency.

Speaking at the recent Petersberg

Climate Dialogue in Berlin, incom-

ing COP28 President Sultan al-Jaber,

who is also the head of the Abu Dha-

bi National Oil Company, said fossil

fuels would “continue to play a role

in the foreseeable future”. He said

the world should use all sources of

energy while reducing emissions

from power plants and other fossil

fuel-reliant sectors by using carbon

capture and storage (CCS).

“If we’re serious about mitigating

climate change and reducing in a

practical manner emissions we must

scale-up carbon capture technolo-

gies,” he said, adding that in the

United Arab Emirates “we have em-

braced a comprehensive, holistic ap-

proach to the energy transition.”

His view on the continued use of oil

and gas, however, differed from that

of several other ministers.

During a press brieng at the event

in Berlin, German Foreign Minister

Annalena Baerbock, said: “We have

to get out of fossil fuels, we have to

dramatically reduce emissions.”

The Danish Minister for Global

Climate Policy, Dan Jørgensen, also

told the Financial Times there were

concerns “about making sure [CCS]

does not become an excuse for not

making the [energy] transformation

we need”.

“I don’t think we should dismiss

[CCS]. There are emissions that we

are not able to phase out,” he said,

pointing to industry examples such

as cement making. However, he add-

ed: “This should not be seen as some-

thing we do instead of replacing fos-

sils with renewables”.

The diverging views make for dif-

cult talks later this year in Dubai.

Also speaking in Berlin, Tina Stege,

the climate envoy for the vulnerable

Marshall Islands, and Maisa Rojas,

Chile’s Environment Minister, called

for “honesty” at COP28 about the

end of fossil fuel use.

“We . . . want the phase out. We

want to make sure if we add new en-

ergy, we are taking the old dirty en-

ergy out of the system,” said Rojas,

while Stege added: “We need to re-

ally honestly look at where we are,

what we haven’t done and what we

need to do. The fossil fuel era has to

come to an end.”

Last year at the UN COP27 climate

change sunmit in Egypt, efforts to

reach an agreement to phase out fos-

sil agreement failed, despite the sup-

port of dozens of countries including

the US and EU.

Clean energy

economy emerging

“faster than

imagined”

IEA Executive Director, Fatih Birol hailed solar as

the “shining star”

THE ENERGY INDUSTRY TIMES - JUNE 2023

Junior Isles

New proposals to limit greenhouse gas

emissions from US power plants look

set to face legal challenges from fossil

fuel companies.

After being struck down almost a year

ago by the Supreme Court, the Biden

Administration has unveiled a plan to

cut emissions from gas and coal plants

through what would be the rst-ever

large-scale use of carbon capture and

green hydrogen over the next decade.

According to the White House, the

new plan, if successful, would put the

US on track to reach net zero emissions

from the power sector by 2035. Power

plants are currently responsible for a

quarter of the nation’s greenhouse

gases.

The new carbon pollution standards

avoid up to 617 million metric tonnes

of total carbon dioxide between 2028

and 2042.

The plan, however, could be open to

legal challenges as fossil fuel compa-

nies and their representatives explore

challenging it in court on the basis the

technologies are unproven. A similar

effort to clean up the power industry

by the Obama White House in 2015

was hung up by legal challenges and

ultimately repealed.

Michelle Bloodworth, President and

CEO of America’s Power, which rep-

resents utilities that burn coal, said:

“The proposal raises a number of

critical legal questions, including

whether the EPA has the authority to

force the use of technologies that are

not economically or technically fea-

sible for widespread use.”

Jeff Holmstead, a lobbyist at

Houston-based Bracewell LLC who

formerly ran the EPA’s air and radiation

ofce during the Bush administration,

said betting on carbon capture is risky.

“There isn’t a single commercial-

scale gas-red power plant anywhere

in the US – or as far as I know, anywhere

in the world – that uses CCS to control

its emissions,” he said. “This fact alone

could make it hard for EPA to convince

the courts that CCS has been adequate-

ly demonstrated.”

EPA ofcials and some environmen-

tal groups say the rule was designed to

withstand legal challenges because it

focuses on available technologies that

can be applied directly at power plants,

and because Congress afrmed the

agency’s authority to impose technol-

ogy-based carbon standards.

They add that the Ination Reduction

Act, Biden’s centrepiece climate leg-

islation, offers billions in tax credits

and incentives that make CCS and

clean hydrogen economically feasible.

In its 651-page proposal, the EPA also

cited SaskPower’s Boundary Dam

project in Canada as one that has dem-

onstrated CO

capture rates of 90 per

cent on an existing coal steam generat-

ing unit.

n Lured by President Joe Biden’s green

energy tax incentives under the Ina-

tion Reduction Act, UK power genera-

tion business Drax said it plans to spend

$4 billion building two biomass power

plants in the southern US. The plants

are part of Drax’s strategy to become

a leader in “negative emissions”, which

can be sold in the form of credits to

other companies looking to offset their

emissions. The company’s biomass

power plants burn pellets made from

organic matter such as wood chips to

generate electricity.

brought about by the crisis. He

noted that the majority of the $4

trillion generated by oil and gas

companies has gone to dividends,

share buybacks and debt repay-

ment – rather than back into tradi-

tional supply.

“The oil and gas industry’s capital

spending on low-emissions alter-

natives such as clean electricity,

clean fuels and carbon capture tech-

nologies was less than 5 per cent of

its upstream spending in 2022,” the

IEA stated.

According to the report, the big-

gest shortfalls in clean energy in-

vestment are in emerging and de-

veloping economies.

“There are some bright spots, such

as dynamic investments in solar in

India and in renewables in Brazil

and parts of the Middle East. How-

ever, investment in many countries

is being held back by factors includ-

ing higher interest rates, unclear

policy frameworks and market de-

signs, weak grid infrastructure, -

nancially strained utilities, and a

high cost of capital,” it stated.

The IEA said “much more needs

to be done” by the international

community, especially to drive in-

vestment in lower-income econo-

mies, where the private sector “has

been reluctant” to venture.

To help address this, the IEA and

the IFC will on 22 June release a

new special report on ‘Scaling Up

Private Finance for Clean Energy

in Emerging and Developing

Economies’.

The IEA report came just 10 days

after another report by Bloomberg-

NEF (BNEF) estimated that Europe

needs to invest more than €29 tril-

lion ($32 trillion) in energy and

related technologies between now

and 2050 to transition to a net zero

economy.

In 2022, the region’s investment

in low-carbon energy transition was

$227 billion. To achieve the report’s

Net Zero Scenario, Europe has to

increase its annual investments in

clean energy supply, electric vehi-

cles (EVs), heat pumps and sustain-

able materials to more than three

times this level throughout the re-

mainder of the decade and more

than four times in the 2030s.

According to BNEF’s ‘New En-

ergy Outlook: Europe’ report, more

than two-thirds of the required in-

vestment is on the demand side,

with EVs accounting for the big-

gest single portion – $21 trillion

over 2022-2050, and heat pumps

for another $1.4 trillion.

By 2050, Europe should also

spend around $3.8 trillion on devel-

oping an expanded and digitalised

grid that supports the integration of

more renewables, EVs and heat

pumps. A similar amount, more

than $3.8 trillion, is invested in new

clean power assets by 2050 under

the Net Zero Scenario, a large part

of which must be before 2030.

In that scenario, onshore and off-

shore wind capacity grows to 675

GW by 2030, up from 234 GW in

2022, while solar expands to 774

GW from 226 GW.

Continued from Page 1

The wind power industry has outlined

key tasks for EU members if the bloc

is to realise its offshore wind ambitions.

An Industry Declaration of more than

100 companies, representing the whole

value chain of offshore wind and re-

newable hydrogen in Europe, recently

outlined the urgent need for new invest-

ments in wind energy manufacturing

capacity and supporting infrastructure.

The Declaration also warns that cur-

rent policies do not underpin Europe’s

ambitions with adequate nancing and

funding mechanisms. In 2022 not a

single offshore wind farm reached nal

investment decision. Uncoordinated

market interventions, price caps and

national claw-back measures deterred

investments, it said.

Investment to get Europe where it

wants to be is massive: the EU has

calculated the cost of getting to 300

GW in offshore energy production by

2050 at €800 billion ($900 billion).

The Declaration came as nine Heads

of State & Government – from Bel-

gium, Demark, Germany, Nether-

lands, France, Ireland, Luxembourg,

Norway and the UK – and the Presi-

dent of the EU Commission met at the

North Sea Summit in Ostend, Bel-

gium, to agree new commitments on

the build-out of offshore wind in the

North Seas.

The Declaration said expanding the

offshore wind value chain is now pri-

marily a volume game. Today Europe

can manufacture 7 GW of offshore

wind turbines a year. To meet the ex-

pansion path outlined in the Ostend

Declaration Europe needs to manufac-

ture 20 GW a year by the second half

of this decade.

Importantly, it stressed that the ex-

pansion of offshore wind must be un-

derpinned by investments in grids and

ports. Europe needs to double its an-

nual grid investments and channel €9

billion into the modernisation and ex-

pansion of its port infrastructure be-

tween now and 2030. It noted that if

the UK is to meet its 50 GW target for

2030, signicant acceleration is need-

ed in grid development and supply

chain investment.

Major European Transmission Sys-

tem Operator (TSO), TenneT, has al-

ready been making signicant invest-

ments in developing a North Sea grid

to handle the massive amount of wind

power that is coming on line.

Early last month it concluded an-

other framework cooperation agree-

ment with NKT, Nexans and a con-

sortium of Jan De Nul, LS Cable and

Denys, for at least ten 525 kV HVDC

cable systems with delivery until

2031.

In a separate move, offshore wind

developers Cerulean Winds and Fron-

tier Power International have unveiled

plans for a £20 billion ($25 billion)

oating wind-powered transmission

network that will electrify North Sea

oil and gas platforms.

The North Sea Renewables Grid

(NSRG) project is touted as one of the

UK’s largest infrastructure develop-

ments backing the oil and gas sector’s

decarbonisation, Cerulean Winds said.

The offshore wind sector must act to

address increasing mechanical break-

down issues, component failures and

serial defects resulting from the de-

ployment of ever-larger offshore wind

turbines, according to renewable

energy projects underwriter GCube

Insurance.

GCube’s new report, entitled ‘Ver-

tical Limit: When is bigger not better

in offshore wind’s race to scale?’, is

compiled from 10 years of the com-

pany’s claims data and draws on evi-

dence from experts across the offshore

wind sector to demonstrate how off-

shore wind’s risk landscape has sig-

nicantly shifted, as manufacturers

push to develop bigger machines,

faster.

Over the past ve years, the race to

scale turbine technologies has seen

the leap from 8 MW to 18 MW tur-

bines occurring in a fraction of the

time it took to go from 3 MW to 8

MW. While this is an impressive tech-

nological achievement, GCube says

such rapid commercialisation of ‘pro-

totypical’ technologies is now leading

to a concerning number of losses, and

subsequently piling nancial pressure

on manufacturers, the supply chain

and the insurance market.

Amongst the ndings of the report,

underwriters are concerned that 55 per

cent of all claims by frequency come

from component failures during con-

struction from 8 MW+ machines,

which now represent a larger share of

Total Insured Values (TIVs).

This, combined with an increase in

average offshore wind losses, up from

£1million ($1.24 million) in 2012 to

over £7 million in 2021, is creating

unsustainable nancial risk, right

when scaling is needed to bring about

the energy transition.

Another major nding is that 8

MW+ machines are suffering from

component failures within the rst

two years of operation. This is juxta-

posed against the signicantly shorter

timeframe (ve years) for component

failures during operation in the 4-8

MW category of turbines and points

to the urgent need to address product

quality and reliability – a key recom-

mendation of the report.

Fraser McLachlan, CEO, GCube

Insurance, commented: “The push to

rapidly develop more powerful ma-

chines is piling pressure on manufac-

turers, the supply chain, and the insur-

ance market.

“Scaling up is an essential part of

driving forward the energy transition,

but it is now creating growing nan-

cial risks that pose a fundamental

threat to the sector.” He added: “We

advise manufacturers to focus on im

proving the quality and reliability of

a reduced number of products to put

themselves back on a sustainable path

of development.

“At the same time, developers must

support manufacturers by sharing the

risk of larger machines more equitably

and open their lending books to supply

chain companies.

“Vessels are going to be one of the

biggest bottlenecks in building off-

shore projects, and developers are in

a powerful position to invest in supply

chain companies at the benet of the

entire sector.”

Headline News

Industry outlines urgent needs as Europe moves to scale-up

offshore wind

Offshore wind turbine scaling is creating unsustainable

market risks

Challenges ahead for US

proposals to limit power plant

emissions

The IEA said the O&G sector

re-invested less than 5 per cent

of revenues in clean energy

A new proposal to cut greenhouse gas emissions from fossil fuelled power plants looks set

to face legal challenges as fossil fuel lobbyists argue that carbon capture and storage has

not been adequately demonstrated.

THE ENERGY INDUSTRY TIMES - JUNE 2023

Europe News

Janet Wood

The European Union has granted €252

000 ($270 000) of funding, as part of

its Connecting Europe Facility (CEF),

for feasibility studies for a 300 MW

offshore wind farm in the Northern

Adriatic coastal zone near Croatia and

Italy.

The initiative is one of many offshore

wind projects being progressed across

Europe, despite pressure on the indus-

try’s supply chain, concerns over scal-

ing up of offshore wind turbines and a

wish list for government support.

The EU’s current targets for offshore

wind – which call for 60 GW by 2030

and 300 GW by 2050 – are in addition

to those set by countries outside the EU

such as the UK and Norway. The con-

tinent could have up to 450 GW of

offshore wind in operation by 2050.

As projects continue to be delivered

in the southern North Sea, attention has

also turned to other offshore areas. The

CEF funding for Croatia’s initial off-

shore wind farm will tap just a small

part of the potential resource in the area.

Croatia’s offshore wind potential is

seen at up to 25 GW, according to a

new report funded by the European

Bank for Reconstruction and Develop-

ment (EBRD).

“The identied potential of up to 25

GW of offshore wind capacity in low-

impact areas alone could turn Croatia

into a major European player in the

renewable energy sector over the next

decade,” said Victoria Zinchuk, EBRD

Director for Central Europe. The study

identied more than 29 000 km

offshore area available for renewables,

including offshore wind, both bottom-

xed and oating.

Elsewhere, Greece has recently se-

lected ve areas to accommodate 2.1

GW of offshore wind turbines in the

north and central Aegean, according

to recent reports, in what will be the

rst phase of its offshore wind deploy-

ment programme.

In the north, a site off Alexandroup-

oli has been designated as suitable to

become home to pilot projects totalling

600 MW. Three areas in the central

Aegean could each accommodate a

300 MW wind farm while a location

off eastern Crete could host a 600 MW

complex.

Greece is targeting at least 2 GW of

offshore wind by the end of the decade,

most of it oating wind.

In the Baltic Sea European Energy

and Vårgrønn have announced a long-

term strategic partnership to pursue

opportunities off Lithuania, Estonia

and Latvia. The three states are consid-

ered to have 15.4 GW of possible ca-

pacity and tenders are expected in

Lithuania and Estonia this year.

Wind and wave energy projects can

reduce their levelised cost of energy

(LCOE) if they share infrastructure,

services and a supply chain, according

to a new report produced for Wave

Energy Scotland.

‘Wave and Floating Wind Energy

– Opportunities for Sharing Infra-

structure, Services and Supply Chain’,

investigated a range of sharing oppor-

tunities. It found LCOE savings of up

to 7 per cent for wind power and up

to 40 per cent for wave energy, while

the combined LCOE of a shared

project can be up to 12 per cent lower

than in separate developments.

Cost reductions are shown to be

available to both wind and wave tech-

nologies without needing to consider

fully hybrid wind/wave platforms – an

option considered to be too high-risk

at this stage.

Wave energy can be integrated by

placing individual megawatt-scale

devices in clusters between oating

wind turbines or by mounting numer-

ous wave devices on oating wind

substructures, sharing their supply

chain and manufacturing processes.

WES Managing Director Tim Hurst

said: “The conclusions from this report

provide a promising starting point for

cross-sector discussions, supporting

the launch of a more detailed optimisa-

tion and feasibility study, and WES

looks forward to progressing this de-

velopment for the sector.”

Scotland is already creating a huge

supply chain and services network to

satisfy the massive offshore wind ca-

pacity leased through the ScotWind

programme.

Nearly every EU state reduced energy

demand last winter and renewables

generated more than fossil fuels for the

rst time ever, according to energy

think-tank Ember – despite extended

outages in France’s nuclear power

plants.

Overall energy demand fell by seven

per cent. But fossil fuel generation

dropped by 12 per cent compared to

2021 – coal power was down 11 per

cent and gas was down 13 per cent.

Fifteen of the 18 coal-using EU coun-

tries reduced coal use, with the biggest

users – Poland and Germany – making

up 70 per cent of the reduction.

Ember’s analysis found that between

October 2022 and March 2023 renew-

ables provided 40 per cent of the EU’s

electricity compared to 37 per cent

from fossil fuels.

Although most EU states reduced

electricity demand over the winter,

only Romania, Slovakia and Greece

achieved a voluntary target of 10 per

cent. On average, demand fell by 6.2

per cent between November and

March.

“Europe faced a crisis winter, with

spiralling energy costs and supply con-

cerns triggered by Russia’s invasion of

Ukraine,” said Ember analyst, Dr Chris

Rosslowe. “The EU got through those

difcult months, but it can’t rely on

emergency demand cuts and mild

weather for future years.”

Janet Wood

Germany is about to accelerate the de-

ployment of solar energy across the

country.

It recently proposed a new strategy

after consultations in March and April.

It promised: faster approval proce-

dures for ground-mounted solar farms;

a boost for rooftop commercial and

industrial solar installations; measures

to speed up and simplify grid connec-

tion; actions to build industrial produc-

tion capacity; skills investment; and

removal of tax hurdles.

Economy Minister Robert Habeck

said that Germany is well on track to

meet its 2023 target of 9 GW of new

solar capacity. The country’s Federal

Network Agency also recently opened

a new rooftop solar tender looking for

190 MW of capacity. It hopes to reach

650 MW in three calls this year.

European countries have redoubled

their efforts to install solar PV on roof-

tops and co-locate it with other ac-

tivities as the solar industry encoun-

ters push-back over large-scale use of

agricultural lands.

A recent report from McKinsey &

Company highlighted land availability

as a major constraint in expanding both

wind and solar capacity. The report,

‘Land: A crucial resource for the en-

ergy transition’ said new renewable

installations in France, Germany and

Italy alone would affect an area the size

of Belgium (up to 35 000 km

) by 2040.

McKinsey notes that technical and en-

vironmental constraints place limita-

tions on the land available.

Raffael Winter, Partner at McKinsey

said: “Land availability is crucial to

other societal and environmental ob-

jectives, such as agriculture and biodi-

versity conservation. This creates in-

creased competition for what are all

extremely important issues. It’s vital

for businesses and regulators across

Europe to act hand-in-hand to ensure

that RES development is land-efcient

and biodiversity-enhancing by har-

nessing deployment strategies that can

ensure sustainability and promote a

comprehensive approach.”

The pressure on land has prompted

research into solutions like Agri-PV, a

multi-functional agricultural system

that combines crop production with

solar energy production. The Danish

government-funded project will be

developed in collaboration with Euro-

pean Energy, Aarhus University, Co-

penhagen University, and Slagelse

Municipality.

The project will explore intensive use

of eld robots, increased biodiversity,

the technical and economic viability of

the system, and the acceptance of farm-

ers and the surrounding community.

“We are excited to participate in this

project to develop and mature the po-

tential of agricultural and energy pro-

duction, thus establishing a solid

foundation for future larger projects,”

said Mads Lykke Andersen, Head of

Solar Energy Innovation at European

Energy.

Other options are also under investi-

gation. The Netherlands recently an-

nounced a €28 billion ($30 billion)

package to achieve its climate goals in

2030 that included building 3 GW of

offshore solar by 2030.

Lithuanian grid operator Litgrid says

successful test operations in which it

cut connections with the Russian

power grid have paved the way for

plans to synchronise Lithuania’s grid

with Western Europe.

Lithuania halted energy imports

from Russia last year but it is still part

of a common synchronised electricity

grid with Russia and Belarus dating

back to the Soviet era.

Lithuania’s electricity needs were

fully secured by its own generation

and imports from Poland and Sweden.

“Another and extremely signicant

step closer to the day when we will be

where we belong – in the European

grid!” wrote head of government In-

grid Simonyte on Facebook after the

successful test, while Energy Minister

Dainius Kreivys spoke of a “big step

towards energy independence”. Lith-

uania is also set to be further con-

nected to Estonia and Latvia via off-

shore wind connections.

Estonia and Latvia have also halted

imports from Russia, but are not tech-

nically ready to synchronise with the

Western European grid. Meanwhile,

Ukraine has increased exports to

Western Europe after a six-month gap.

The country’s electricity network was

synchronised with Western Europe

immediately after Russia invaded,

after plans to switch it away from the

Russian grid were brought forward. It

is currently able to export power via

a 400 MW link.

Sharing ‘cuts costs for wind and wave’

EU cuts both demand and fossil fuel use last winter

Solar expansion seeks new options

Offshore wind tenders continue to

roll out across Europe

n Multiple areas of Adriatic and Aegean seas set aside n Baltic Sea tenders expected this year

Major push on rooftop PV in Germany

n Offshore solar and co-location with agriculture under investigation

Lithuania follows Ukraine

to synchronise with Western

Europe grid

Nadia Weekes

Global nuclear capacity is projected to

increase by 280 GW by 2050 as coun-

tries look to boost decarbonised sourc-

es of electricity, according to a report

by consultants Wood Mackenzie, pro-

vided costs are reduced.

David Brown, Director of the Energy

Transition Practice at Wood Macken-

zie and lead author of the report, said

the nuclear industry must address the

cost challenge urgently if it wants to

capitalise on the signicant growth

potential offered by low-carbon power.

The high cost of new nuclear and

small modular reactors (SMRs) is

likely to remain a major obstacle to

their adoption, despite policy support

and market growth. Currently, the cost

gap between nuclear and other forms

of low-carbon power generation is too

substantial for nuclear to experience

rapid growth.

SMRs are designed to be modular,

assembled in factories and scalable.

They are expected to reach the market

faster, with a target construction time

of three to ve years compared with

the ten years needed for a large pres-

surised water reactor (PWR).

Wood Mackenzie’s modelling indi-

cates that if costs can drop to $120/

MWh by 2030, SMRs will be com-

petitive with nuclear PWRs, gas and

coal (both abated and unabated) in

certain regions around the world. Fur-

ther price reductions are anticipated

between 2040 and 2050 as SMRs ben-

et from economies of scale and im-

proved market economics.

The rate of expansion for SMRs will

depend on how quickly costs can be

reduced. Wood Mackenzie estimates

that conventional nuclear power cur-

rently has an electricity cost that is at

least four times higher than wind and

solar power when considering the lev-

elised cost of electricity (LCOE).

Up until 2030, SMRs are projected

to have a limited presence in the pow-

er market due to high costs impeding

their rapid deployment. With the de-

cade already progressing and the time

required for construction, it is now

evident that only a few plants can be

built at best.

According to industry estimates, the

cost of a rst-of-a-kind (FOAK) SMR

could range from $6000/kW to $8000/

kW, with Wood Mackenzie analysts

expecting FOAK costs to be on the

higher end or even above, as develop-

ers undertake early-stage projects.

Wood Mackenzie’s tracking of the

SMR sector indicates that there are

only six potential FOAK SMR projects

in the pipeline between 2023 and 2030,

with the capacity of each facility rang-

ing from 80 MW to about 450 MW.

The amount of investment in FOAK

SMRs remains uncertain and will be

inuenced by factors such as nancing

terms, commodity costs, uranium

availability and political support.

Wood Mackenzie estimates that, be-

tween 2030 and 2040, it will be neces-

sary to have 10-15 projects with a

combined capacity of 3000- 4500 MW

to support reduced SMR costs.

Nuclear must compete with a number

of electricity decarbonising technolo-

gies including hydrogen-red power,

gas or coal with carbon capture and

storage, geothermal and long-duration

energy storage. All of them are expen-

sive and require technological ad-

vancements to establish a strong foot-

hold in the market, the report nds.

n Korea Hydro & Nuclear Power,

Samsung Heavy Industries and Sea-

borg Technologies have formed a con-

sortium to develop oating nuclear

plants with Seaborg’s innovative mol-

ten salt reactor technology.

Israel has launched a comprehensive

national plan to integrate hydrogen into

the country’s energy landscape as part

of the Ministry of Energy’s efforts to

decarbonise the economy.

The ministry estimates that hydro-

gen demand for electricity, heavy

transport, industry, aviation and ship-

ping could reach 5.2 million tonnes in

Israel in 2050.

The multi-year plan includes the pro-

motion of research and development

(R&D), regional hydrogen valleys

and other infrastructure. It also pro-

poses the introduction of exible regu-

lation for integrating hydrogen into the

energy sector.

R&D and demonstration projects

are intended to provide solutions to

major challenges such as high costs,

logistical and safety issues, and the

efciency of hydrogen production,

storage and use.

The hydrogen valleys will cover the

entire value chain, from production

technologies, through storage and

transport to nal use in industry, trans-

port and energy.

The promotion of the necessary in-

frastructure will include the setup of

dedicated fuelling stations, under-

ground hydrogen storage, and testing

the feasibility of transporting hydro-

gen in natural gas pipelines.

The ministry also intends to promote

international collaboration to help de-

velop technologies, reduce costs, cre-

ate new trade relations and diversify

available energy sources.

Kazakhstan’s Prime Minister, Alikhan

Smailov and the European Commis-

sion’s Executive Vice-President, Val-

dis Dombrovskis, approved a roadmap

for the secure and sustainable supply

of raw and rened materials and the

development of renewable hydrogen

and battery value chains, with the aim

of promoting the green and digital

transformation of both economies.

The document addresses crucial top-

ics such as the modernisation and de-

carbonisation of the Kazakh mining

industry, while foreseeing closer coop-

eration on geological exploration, re-

search and innovation.

In a separate development, Kazakh

government ofcials and representa-

tives from Chinese companies State

Energy Investment Corporation of

China (CPIH) and SANY Renewable

Energy signed a memorandum of un-

derstanding on the building of a 1 GW

wind farm complex in the Jambul re-

gion of Kazakhstan.

An energy storage facility will be

built next to the wind farm to smooth

out uctuations in wind generation.

CPIH intends to build factories in

Kazakhstan for the production of

wind turbine towers, blades and other

components.

Nadia Weekes

Finnish AW-Energy, a player in near-

shore wave energy technology, has

signed a memorandum of understand-

ing with Namibian company Kaoko

Green Energy Solutions for the devel-

opment of renewable energy and the

production of green hydrogen from

renewable sources including wave

energy.

AW-Energy is behind WaveRoller, a

commercial-scale wave energy con-

verter unit that is submerged near-

shore and generates electricity from

the movement of the waves through

the surge phenomenon.

Christopher Ridgewell, CEO of AW-

Energy, said: “With an energetic and

consistent wave resource Namibia is

very well positioned to utilise the ben-

ets of wave energy to enable sustain-

able industries and jobs.”

Sacky Nalusha, a director for Kaoko

Green Energy Solutions, said that cre-

ating opportunities for innovative solu-

tions and partnerships could grow the

energy sector, which is currently un-

derdeveloped in southern Africa.

“Ocean waves have the potential to

provide a sustainable solution to our

energy needs and demands,” he added.

Phase 1 of the collaboration will in-

clude a detailed site design and the

fabrication and deployment of a Wa-

veRoller wave farm on the coast of

Swakopmund to deliver renewable

power to the area. Phase 2 will assess

the capacity for wave farms in other

Namibian locations. Finally, Phase 3

will expand wave energy plants to de-

liver power to the grid and explore

options to support desalination and

green hydrogen projects.

Namibia’s Green Hydrogen Council

launched its green hydrogen strategy

at COP27 in Sharm El-Sheikh, Egypt.

The strategy sees Namibia become a

net exporter of hydrogen.

“Combined with other renewable

energy sources such as solar, Wa-

veRoller enables signicant cost re-

ductions in green hydrogen produc-

tion and represents a viable solution

in the drive to execute the world’s

clean energy hydrogen roadmap,” ac-

cording to Ridgewell.

Israel launches national hydrogen

integration plan

Kazakhstan forges international

hydrogen and renewables partnerships

Wave energy technology

could support Namibia’s

decarbonisation

High cost ‘main hurdle’ for nuclear

in growth trajectory to 2050

n Cost of new nuclear and SMRs principal obstacle to adoption

n Next decade will be critical to long-term success

THE ENERGY INDUSTRY TIMES - JUNE 2023

International News

National Host Organised by:

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Solutions to European

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OF CYPRUS

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CONFERENCE &

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n Strong wave resource makes of Namibia an ideal location

n Ambition to become a leading green hydrogen exporter

the RecyclableBlade at this project,

further signicant CO

reduction will

be achieved using the recycled blade

materials in new products.

The blades are the result of a devel-

opment process that has lasted about

ve years. Explaining the thinking

behind it, Mænnchen said: “Because

wind turbine blades are very strong

composite materials, they are hard to

breakdown; it requires a lot of energy

or costly applications to dispose of

them afterwards. That’s why they are

disposed to landll. Some ask why

there hasn’t been a solution until now

but you must remember that we are

still quite a young industry.”

He added: “But because Siemens

Gamesa is a company that wants to

create green, sustainable solutions, it

was very important for us to look into

this. So we decided to develop this

new composite blade with a more

circular approach.”

Siemens Gamesa developed a

multi-generation plan that contained

its ideas for materials to be used in the

blade. This laid down a path to begin

discussion on what the technical

properties and sustainability require-

ments were for its development in the

short-, mid- and long-term. While the

company shared its proposal with all

its resin suppliers, it was Indian-based

“Of course targets have shifted a bit

over the last few years, so I imagine

it could be more. But regardless, the

sheer size of the number is abso-

lutely huge. There are some energy

intensive and costly ways of getting

rid of the blades; and other things

have been tried, such as mixing them

in cement kilns. But normally, blades

are sent to landll at the end of their

life. But because the materials they

are made from are quite stable, they

just remain there. This doesn’t send

the right message.”

Not to mention that the disposal of

such quantities of blade material

would likely call for the creation of

new landll sites.

To address the problem, Siemens

Gamesa launched its Recyclable-

Blade product in September 2021.

Just ten months later, the world’s rst

commercial recyclable blades entered

operation at the Kaskasi offshore

wind farm in German waters.

The wind farm will operate at a

nominal output of 327 MW and, in

boost mode, at a maximum capacity

of 342 MW – generating enough

clean energy for up to 400 000 homes

across Germany. Kaskasi features 38

SG 8.0-167 DD offshore wind tur-

bines, with each blade measuring

81 m in length. Thanks to the use of

Siemens Gamesa RecyclableBlades leaving the blade factory in Hull (UK) for the Kaskasi

offshore development (Germany)

Mænnchen was part of a multi-disciplined team that developed

the RecyclableBlade

Special Technology Supplement

n January this year, the EU agreed

on new, ambitious long-term goals

for the deployment of offshore

renewable energy up to 2050, with

intermediate objectives to be achieved

by 2030 and 2040.

According to the European Com-

mission’s calculations, the region will

need to install about 111 GW of off-

shore renewable generation capacity

by the end of this decade – nearly

twice as much as the objective of at

least 60 GW set out in the EU Off-

shore Renewable Energy Strategy in

November 2020. And beyond 2030,

the sector must add 215-248 GW by

2040, and 281-354 GW by 2050.

Starting from an installed base of

16.4 GW in 2021, it is a huge task.

Connecting thousands of turbines

each year to meet climate change

targets will be a monumental chal-

lenge but looking further ahead, there

is also the question of tackling the

impact of these turbines on the envi-

ronment at the end of their life. What

to do with wind turbine blades from

decommissioned wind farms is now

increasingly being recognised as a

looming environmental problem.

According to Siemens Gamesa esti-

mates made in 2021, there could be as

much as 200 000 offshore wind tur-

bine blades in Europe that will be in-

stalled for offshore use by 2050. This

means there could be more than 10

million tonnes of recyclable material

that could be reclaimed.

Commenting on the scale of the

problem, Jakob Mænnchen, Head of

Casting at leading offshore wind tur-

bine supplier, Siemens Gamesa, said:

THE ENERGY INDUSTRY TIMES - JUNE 2023

Offshore wind is central to the EU meeting its renewables and decarbonisation targets. Meeting those targets is a

huge task in terms of building and connecting wind farms at the necessary pace. And when those targets are met,

there is the question of what to do with the masses of old, end-of-life turbine blades that are currently destined for

landll or other processes that emit CO

and jeopardise the circular economy. Junior Isles speaks to experts from

Siemens Energy and Siemens Gamesa about these pressing issues.

Closing the circle on

offshore wind

total composite waste, European

project developers were quick to em-

brace and drive the technology.

“Talks and initial development be-

gan about ve years ago. As soon as

we actually started producing the

blades and doing the initial testing of

the recycling, things moved very

quickly. Taking just a few years for

development is a very short time in

our industry. We were the rst to go

out with a solution like this”, noted

Mænnchen.

“When we announced the blades

and went to project developers, they

were very eager to learn about this

solution. It’s really about having the

same mindset across the board – from

OEM to developer – to foster an in-

novation like this.”

With the Kaskasi project already up

and running, it was not long before

RWE again opted for Siemens

Gamesa’s RecyclableBlades for 44 of

100 SG 14-222 DD offshore wind

turbines to be installed at the Soa

offshore wind power project off the

east coast of the UK. This project will

utilise RecyclableBlades measuring

108 m long, representing the rst de-

ployment of this variant.

When these blades do eventually

reach the end of their life, Siemens

Gamesa says it will advise on the re-

cycling process.

“Although we produce and service

the products, after they are in place,

we do not own them and are not

Special Technology Supplement

THE ENERGY INDUSTRY TIMES - JUNE 2023

The RecyclableBlades

being transported from Hull

to the Kaskasi offshore

development

Aditya Birla Advanced Materials, an

expert in epoxy resins, that was able

to come up with an idea that met the

requirements.

The research and development

team at Aditya Birla worked in close

co-ordination with Siemens Game-

sa’s technology team to develop a

novel recyclable epoxy resin system,

leveraging the company’s proprie-

tary Recyclamine technology.

Essentially, the blades use a recy-

clable resin system that enables re-

covered blade materials – the resin,

berglass, and wood, among others

– to be reused and repurposed, bring-

ing them back into the system and

closing the loop. The resin has been

designed for extra slow reactivity to

enable improved processability and

to cure faster than conventional ma-

terials, thereby contributing towards

lowering cycle time in wind turbine

blade manufacturing.

Importantly, the blade is also pro-

duced the same way as a standard

blade and is based on Siemens

Gamesa’s existing IntegralBlade

manufacturing process. This means

there is no increased implementation

risk associated with the new resin

system.

Mænnchen was part of a multi-dis-

ciplined team that worked on the

technology in the early stages. Ex-

plaining how it works, he said:

“Composite blades consist of a 3D

matrix chemical structure, where ev-

erything is bound together to make it

incredibly strong. The technology we

use introduces a new linkage in the

chemistry of this backbone that can

only be separated under certain spe-

cic conditions. But they are condi-

tions that are quite easy to achieve.”

By using a common acetic acid and

raising the temperature to 80°C, this

link can be activated in order to

separate the composite’s base mate-

rials. “It is an innovation in adapting

common products and well-known

chemistry to break this small link-

age,” said Mænnchen. “Basically,

you take down the blade, cut it into

pieces, place it in a tub of acid and

boil it for 3-4 hours.

“It’s one of those things that sounds

really simple once you’ve done it,

but getting to that point takes a lot of

research and development..”

Although the wind industry repre-

sents only about 10 per cent of the

responsible for decommissioning

them and doing the recycling; that’s

down to the project owner and which-

ever recycling companies that will be

handling it,” said Mænnchen. “But of

course we have a vested interest in

ensuring it’s done right. It can of

course be done in different ways, de-

pending on what you want out of it,

but we will advise on how to do it

when we deliver products.”

Mænnchen conrmed the process

and RecyclableBlades have been

tested to ensure they are not affected

over their lifetime by environmental

conditions such as acid rain, and that

when the blades are decommissioned,

the reinforcements, core materials,

plastics and metal parts can be easily

recovered in good quality and value.

He noted, however, that the “process

design” of the recycling facility,

needs to be rened. “After the recy-

cling process is complete, you will

have a mix of your bres, core mate-

rial, and thermoplastic material. The

core material and bres can be re-

moved, cleaned and used for other

purposes. The thermoplastic material

then has to be ltered out from the

acidic solution. This can be done by

centrifuge or neutralisation of the

solvent; it can be done in different

ways. It just depends on what is the

most efcient path, and the expertise

of the recycling facility.”

One notable point, he adds, is that

there will be a big industry using

materials from the RecyclableBlade

for other things such as printed cir-

cuit boards, and consumer electronic

devices.

Mænnchen noted: “This means

there will be recycling techniques and

facilities that are accustomed to using

materials like this. We can draw on

existing experience.”

Although there is a slight premium

on the price of the RecyclableBlade

compared to conventional blades,

Siemens Gamesa notes that this is

mitigated by the fact that project own-

ers can use and sell recycled materials

and also avoid paying for landll.

Arguably, these considerations

should be rewarded in the auction

process if the industry is to continue

developing innovations that protect

the environment. The circular econo-

my is vital to a sustainable future and,

argues Siemens Gamesa, when mak-

ing the decision on a project-winning

developer, it should not come down

Converter platform of the BorWin3 grid connection in the German North Sea. The grid

connection system BorWin3, which can bring 900 MW of wind energy onshore, began

operation in August 2019

THE ENERGY INDUSTRY TIMES - JUNE 2023

Special Technology Supplement

Inside a high-voltage direct

current converter hall

level Converter (MMC) for, voltage

source converter (VSC) applications.

Outside of Germany the same tech-

nology is used to provide higher

power capacity, depending on the

voltage. In the UK, where the voltage

is 420 kV, the power capacity is just

over 1.3 GW.

For the EU to reach its ambitious

targets for offshore wind, a new stan-

dard for connecting wind farms to

shore is being adopted. Going for-

ward, there will be more and more

bipole systems that also operate at a

higher voltage.

The new standard, which has al-

ready been adopted by transmission

system operators (TSOs), TenneT

and Amprion, will see HVDC off-

shore platforms operate at 525 kV for

a capacity of 2 GW.

Andreas Barth, Vice President

Tender and Projects Grid Solutions at

Siemens Energy, noted: “We will be

able to supply more power via a single

HVDC connection. The big advan-

tage of a bipole system is that you

can even operate the system with half

the power in case there is a failure in

one of the poles. This gives a much

higher availability of the system,

since the operator does not run the

risk of fully dropping the wind farm

from the grid.”

One challenge with the higher volt-

age is the requirement of a larger

platform but rather than only optimis-

ing the design to reduce platform size,

the focus is also shifting to building

identical platforms in an effort to

speed up the build-out programme.

In April the TSO, in a move that will

go a signicant way to helping the EU

realise its ambition for offshore wind,

signed contracts worth €30 billion

with four cooperation partners to de-

velop the North Sea as a hub for sus-

tainable and independent European

energy production.

With the signing, TenneT has now

completed the process of awarding

contracts for the sea- and land-based

converter stations for a total of 14

offshore grid connection systems,

which was launched in August 2022.

TenneT had already awarded 11 of

these systems at the end of March,

eight of them in the Netherlands and

three in Germany. Three more sys-

tems in Germany were added with the

April deal. These 14 systems, each of

2 GW, are to be connected by 2031.

One of the deals will see Siemens

Energy in a consortium with Draga-

dos Offshore execute the German

projects BalWin3, LanWin4 (both

with a connection to the onshore grid

in Wilhelmshaven) and LanWin2

(with a connection near Heide). In

December 2022, the same consor-

tium was awarded acontract by Am-

prion to build the converter stations

for the German projects BalWin1

and BalWin2 offshore grid connec-

tion systems.

Commenting on the German TSO’s

approach to allow consortiums to

employ repeat designs for their plat-

forms, Barth said: “The question of

faster implementation and the secur-

ing of production capacities has

gained in signicance in the award

decisions. The focus is on being able

to connect to the grid on schedule

with the expansion targets.

He says that standardisation is key

to building and connecting the plat-

forms within what is a relatively

short timeframe. “The fact that we

have identical designs for all our

platforms is a big step forward. We

are using identical equipment for all

our platforms and therefore only

have to design the platforms only

once for all 2 GW standard projects.

Additionally, we will use the same

platform partner, Dragados Offshore,

for all our ve 2 GW projects in the

German North Sea and will build

them one after another. This well es-

tablished partnership allows for faster

implementation of the projects.”

Work is already well underway on

the new platform standard. Based on

TenneT’s standard design for the

platform, Siemens Energy started the

detailed design at the beginning of the

year and is also optimising it to meet

Amprion’s requirements.

Platform design work started with

system design – the basic design of

the electrical grid connection. This

involves a study of the offshore grid

and which turbines will be used; and

onshore network studies to identify

where the grid will be connected to

the different onshore locations. These

network studies provide the basis to

the design of high-voltage equipment.

Barth added: “Once the design of

transformers, converters, reactors,

switchgear, etc., is complete, this is

then incorporated into a platform and

civil design – a platform design for

the offshore and a civil design for the

onshore side. This is the moment

when we really partner, working

with Dragados Offshore on the nal

design for the offshore platform. The

rst platform will take more time

since the platform design has to be

well-thought-out. Subsequent plat-

forms are considerably faster to

build since they are based on the

same design. We have more time to

begin the civil design since this is not

on the critical path; and will only

take about two years to build.”

Siemens Energy is very condent it

will meet the necessary schedule.

“We have substantial experience.

We’ve already built ve HVDC plat-

forms and another 11 are in progress,

with DolWin6 soon to be nished,”

said Barth. “Once that rst 2 GW

project is complete, the next question

is how much more speed can we gain

by working with the TSOs. We are

now designing the platform, which

will take 18-24 months to nalise.

However, as implementation contin-

ues, there will certainly be more opti-

misations in the new standard, and as

our partner gains experience with

manufacturing, logistics, supply

chain, manufacturing methodology,

etc., these can also be optimised.”

The type of framework agreement

that TenneT has signed with the con-

sortiums not only helps accelerate the

offshore build programme but also

provides certainty for equipment sup-

pliers in what has been a volatile

market.

“If we need to build four or ve

platforms, each time we have to book

resources in terms of materials as well

as people and probably partner with

yards to increase our capacity. We

also have to think about partnering

with civil contractors, installers and

staff that can do the commissioning,”

said Barth. “More certainty through

this type of framework agreement al-

lows us to book what we need for the

next ve platforms. For example, it

makes it much easier to go to market

to book a jack-up barge and make

sure we have the necessary resources

when needed.”

He stressed that eventually, building

HVDC networks will have to be

handled similar to how AC grids have

been built for decades. “For AC grids,

it is straightforward because grid

codes are available and control and

protection mechanisms are all already

dened, etc. For DC, this is not the

case because at the moment we just

transmit from one point to another.

But this will have to change as we are

just starting a new type of grid.”

The goal is to build DC grids – both

onshore and offshore. Although the

2 GW standard is for point-to-point

connections, they will also be ‘hub-

ready’ so that at a later stage they can

be connected to a meshed grid. This

will call for multi-terminal operation.

Barth said: “In the next step the

offshore platforms, and even the on-

shore side, will be connected to each

other. This will give the operators

even more exibility, as it will allow

them to route energy not only from

point-to-point, but also to different

locations in the grid.”

The cooperation seen for the 2 GW

standard will be important in realising

the ultimate DC meshed grid.

“It will need alignment between

different transmission system opera-

tors as well as between the different

HVDC suppliers; if they each have

their own standard, the DC meshed

grid will never work. Aligning on the

2 GW standard was a good rst step

towards the DC meshed grid. It gives

all involved parties more planning

certainty so everyone can be aligned

for the next step. The alignment must

be approached internationally, i.e. it

must not only take place within Ger-

many, but also, for example, Germany

with UK, France Norway and Swe-

den. This will allow energy to be ex-

changed between locations and be

used more efciently.”

The ability to shift wind energy to

any country at any time is crucial for

the proper utilisation of the region’s

wind resources.

Barth explained: “For example,

there is a one hour time difference

between Germany and the UK. You

may need the energy at 6 pm in Ger-

many but one hour later, it might be

better used in the UK. So you would

need to exibly transport the energy

from one point to another.”

He concluded: “Building this DC

grid will be the big challenge for the

next ten years and it will require

standardisation, certainty, the right

regulatory schemes and innovation.”

just to price. Additional qualitative

criteria can include but are not limited

to recyclability.

The company stated: “Today, most

auction processes in Europe and

across the world are only focused on

price. This makes it difcult for new

products – which are more expensive

because they are new – to penetrate

the market as fast as we’d like to see

them. If we want the world to have

sustainable products, the system has

to appreciate the effort needed to

develop and manufacture them.”

As the number of offshore wind

farms grows in European waters,

policies that reward such innovation

and encourage technology that makes

turbines sustainable, is not the only

challenge.

With the need for around 90 proj-

ects to meet 2030 targets, Siemens

Energy stresses that developments in

technology to connect offshore

projects like Kaskasi to the onshore

grid will be key.

The three-phase current generated

by the Kaskasi wind farm is trans-

ported to the HelWin Beta high-volt-

age direct current (HVDC) platform,

which is at the heart of the HelWin2

HVDC offshore grid connection in

the German North Sea.

HelWin2 uses symmetrical mono-

pole technology, operating at 320 kV

direct current for a capacity of 690

MW. It uses Siemens Energy’s

HVDC PLUS technology to convert

power from AC to DC for transport

to shore. An onshore HVDC station

converts the power back into AC to

feed it into the grid. The technology

is based around the Modular Multi-

Barth says in the next step the offshore platforms will be connected to each other

EU taking steps to building hydrogen

infrastructure

New gas infrastructure shapes energy

security for southeast Europe

Gary Lakes

Ministers from EU members Ger-

many, Italy and Austria and their trans-

mission system operators (TSOs) last

month petitioned the European Com-

mission to provide special status to

hydrogen transport projects designed

to deliver hydrogen produced by re-

newable sources (green hydrogen) in

North Africa among those countries.

The countries are calling for the

SoutH2Corridor to be placed on the

list of Projects of Common Interest

(PCI), which provides special funding

and enables faster permitting. The

group is backing other hydrogen in-

frastructure projects such as Austria’s

proposed link between it and Ger-

many and Slovenia. Another proposal

calls for a gas pipeline owned by Ita-

ly’s Snam to be converted to carry

hydrogen to Austria and Slovenia.

The infrastructure links are designed

to transport hydrogen to industrial

regions that will be the focus of tran-

sitioning away from heavy fossil fuel

usage.

SoutH2Corridor would have a capac-

ity to transport 4 million tons/year, the

equivalent of 133.2 TWh/year and en-

sure access to green hydrogen at a time

when the market is expected to be

tightening as demand expands.

According to a forecast for 2030

made by ICIS, Germany, Italy and

Austria could see a combined domes-

tic demand for hydrogen amount by

that time to the equivalent of 124

TWh/year. Those states could pro-

duce 80 TWh domestically, while the

SoutH2Corridor would be able to ll

the gap.

ICIS data suggests that by 2050, the

North African states of Morocco, Al-

geria and Tunisia will be producing

hydrogen for export to the equivalent

of 363 TWh/year that will go by pipe-

line to Italy and Spain, of which 213

TWh would be transported to Italy.

In their letter to the EC, the ministers

said “the development of the project

candidates will contribute to security

of supply and greater diversication of

import sources, while at the same time

reducing fossil dependencies.”

Earlier this year, the TSOs of Spain,

Portugal and France launched an initia-

tive called Green2TSO that will guide

the conversion of their gas infrastruc-

ture network into a hydrogen system.

Through ‘open innovation’ the plan

calls for the incorporation of new tech-

nologies that will allow for hydrogen

development in the transport grids.

Priority will go to technologies for

the development of hydrogen detection

and measurement systems, compres-

sion and above-ground storage and

alternatives for coating and cleaning

pipelines. The EC has already agreed

to provide funding for a technology

called Green2TSO OPHTYCs, which

detects and measures hydrogen.

The Green2TSO partnership is

aligned with programmes backed by

the EC including the Green Deal, Fit

for 55 and REPowerEU, which set safe,

efcient and clean guidelines for the

future carriers of hydrogen.

All measures undertaken by EU

members for the hydrogen conversion

are guided by the Hydrogen Backbone

Initiative, which was launched a year

ago with the aim to accelerate Europe’s

decarbonisation by dening the critical

role of hydrogen infrastructure based

on existing and new pipelines. The

initiative seeks to enable the develop-

ment of a competitive, liquid, pan-

European renewable and low-carbon

hydrogen.

The TSOs of Spain (Enegas), Portu-

gal (REN) and France (GRTgaz and

Terega) are partnered in Green2TSO

and are behind the H2Med subsea hy-

drogen pipeline that will connect Bar-

celona with Marseille (known as the

Bar-Mar Pipeline), which was rst

proposed in October last year. It too is

part of the Hydrogen Backbone Initia-

tive. Earlier this year, Germany an-

nounced that it would join H2Med.

Also during April, TSOs in the Nor-

dic and Baltic countries launched a

feasibility study for the Nordic-Baltic

Hydrogen Corridor. Six EU member

states are involved in the study for a

pipeline system that will connect the

green energy production regions in

northern Europe with the major hydro-

gen consumption regions of the EU.

Finland, Estonia, Latvia, Lithuania,

Poland and Germany are participating

in the study, which is led by Latvia’s

Amber Grid TSO. The initial results

are due to be complete by the end of

this year and the project could be com-

pleted and in operation by 2030.

Meanwhile in May, Australia’s Pr-

ovaris and Norway’s Hydrogen AS

completed a pre-feasibility study on

exporting hydrogen from Norway to

Europe by 2027. The study is reported

to demonstrate the potential for low-

cost delivery of green hydrogen.

Provaris said the scope of the study

includes the selection of a preferred

coastal site in Norway, renewable

power supply, production of hydrogen,

compression facilities, and infrastruc-

ture requirements for jetty loading. The

project would employ Provaris’ H2Leo

storage technology and two H2Neo

carriers.

Gary Lakes

Energy security in Southeast Europe

has been an issue for decades. One

question in the late 1990s was how to

get the oil and gas resources in the

newly independent republics of the

Caspian region to the European mar-

ket. Another issue was linking the

existing gas grids throughout the en-

tire region.

In 2006 and again in 2009, the point

of European energy security was

driven home when disputes between

Russia and Ukraine led to temporary

stoppages in Russian gas deliveries to

Europe.

Years of legislation within the Eu-

ropean Union and its members, infra-

structure construction, and big invest-

ment has now placed eastern and

southeastern European countries in a

vastly improved situation as new in-

frastructure is completed and gas sup-

plies are moving at a time when the

EU is clearly cutting its energy con-

nections with Russia.

The Caspian oil question was settled

in 2006, when the BP-led Baku-

Tbilisi-Ceyhan (BTC) opened and

delivered Azeri crude to the Mediter-

ranean Sea, but Caspian gas took lon-

ger to arrive. The Southern Gas Cor-

ridor (SGC), stretching from Baku to

southern Italy, came into operation in

2020 with its rst delivery of Azeri

natural gas to southern Europe.

Azerbaijan supplies gas to the EU

members from its Shah Deniz gas eld

in the Caspian Sea. The gas is trans-

ported through Azerbaijan and Geor-

gia via the South Caucasus Pipeline

(SCP) to Turkey where it links to the

Trans-Anatolian Natural Gas Pipeline

(TANAP) that stretches to northern

Greece and connects to the Trans-

Adriatic Pipeline (TAP), which runs

across Greece to Albania and to Italy.

The Interconnector-Greece-Bulgar-

ia (IGB), which became operational

in October 2022, intersects TAP in

northeastern Greece and delivers gas

from the DESFA system to Bulgaria,

from where it is transported to other

countries.

“Do you remember the state Bul-

garia and the Bulgarian energy indus-

try was in until August of last year?”

Bulgarian President Rumen Radev

asked delegates at the Delphin

Economic Forum in Greece in April.

“No supplies, no gas, no contracts, no

auctions, no slots, no terminals, no

interconnector and with fuel and

prices in the sky?”

Greece’s LNG terminal at Re-

vithoussa in southern Greece is con-

nected to the DESFA system as will

be the Alexandroupolis terminal. Both

terminals will send gas into Bulgaria

and beyond through the IGB. Pipeline

connections are now being estab-

lished throughout the region. Mol-

dova has been receiving gas through

the vertical corridor since December.

Interconnecting pipelines are being

built between Bulgaria and Serbia and

Greece and Macedonia. Albania will

serve as a hub that will send Azeri gas

north along the Adriatic coast to Cro-

atia, where there exists the Krk LNG

terminal, which has recently signed

an agreement to increase its capacity.

Meanwhile, TAP is moving ahead

with plans to expand its capacity from

10 bcm/year to 20 bcm/year.

The developments will lead to not

only Bulgaria and Greece being gas

hubs, but other hubs will form in the

years ahead as new interconnections

throughout the region are made.

“Bulgaria is no longer passive,”

Radev said, emphasising the role he

wants his country to play, “but a part-

ner that realises its own interests and

that of its partners in the best possible

way,” pointing to transparent gas ten-

ders, the use of LNG terminals in

Greece and Turkey, and the ‘Solidar-

ity Ring’ initiative, known also as the

EastRing, through which Azeri gas

will be transported throughout south-

eastern Europe.

In late April, four EU members in

southeast Europe strengthened their

energy security futures with the sign-

ing in Soa of a memorandum of un-

derstanding (MOU) that included

Azerbaijan.

The MOU focused on future coop-

eration regarding the distribution of

Azeri gas throughout the countries

participating in the EastRing bi-direc-

tional pipeline project. Bulgaria’s

Bulgartransgaz, Romania’s Transgaz,

Hungary’s FGSZ, and Slovakia’s

EURSTREAM signed the document

along with Azerbaijan’s state-owned

oil and gas company Socar.

The latest agreement follows a

similar gathering in December last

year in which Greece’s transmission

operator DESFA and those of Bul-

garia, Romania and Hungary signed

an MOU concerning cooperation on

the so-called ‘Vertical Corridor’,

which will see the development of a

bi-directional gas pipeline stretching

from Greece to Hungary and further.

Gastrade, the Greek company behind

the development of the LNG regasi-

cation terminal at Alexandroupolis,

also signed the MOU. That LNG ter-

minal will be operational by the end

of this year.

Turkey also sends natural gas into

Bulgaria through a connector pipeline

with its own network. It recently de-

livered gas to Bulgaria from an LNG

terminal near Izmir on the Aegean

coast.

The EU is supporting the expansion

of gas exports from Azerbaijan to Eu-

rope. Azerbaijan made its rst deliver-

ies via TAP in 2020 with a capacity of

8 bcm/year. That is soon to rise to 12

bcm annually and could reach 20 bcm

by 2030. The IGB is planning to ex-

pand its capacity from 3 bcm/year to

5 bcm/year in the near future.

Hydrogen

Gas

Oil and gas continue to hog the energy headlines and will certainly do so for the next decade, but

as in many developed economies, European countries are pushing forward with plans to shift to

hydrogen and other renewables fuels before 2030. Key components of the energy transition will involve

infrastructure and transport, tangible matters the European states are beginning to focus on.

EU members in the group’s southeastern corner are no longer at the mercy of gas supplies from Moscow. Gas is

arriving in the region by pipeline and from LNG terminals, putting the Balkans on a path to energy inter-independence

with neighbouring countries and in business partnerships with numerous gas suppliers.

THE ENERGY INDUSTRY TIMES - JUNE 2023

Fuel Watch

t would be fair to say that the fo-

cus on net zero seems to have

faltered somewhat, as progress

towards decarbonisation has butted

up against the urgency of immediate

energy security needs. Indeed, it

was evident at the 2023 FT Com-

modity Global Summit in Lausanne,

Switzerland, that the drive to net

zero was a more muted objective in

the short-term amongst a galaxy of

competing challenges.

The geopolitical pressures are well

illustrated by Germany’s dilemma:

at the recent Petersberg Climate Di-

alogue, the German Foreign Minis-

ter called for the introduction of a

global renewable energy target to

reduce emissions and limit global

warming. But faced with the recent

energy crisis caused by the war in

Ukraine, the German government

voted to prolong the operation of

hard coal red power generation

plants to March 2024 and to bring

back brown coal capacity until June

this year.

It remains the case that there are

not currently sufcient commercial-

ly viable clean or renewable fuels

available to meet global energy de-

mands. To bridge that gap, countries

continue to use fossil fuels. The

widespread use of LNG as a “transi-

tional” fossil fuel is perhaps the ulti-

mate symbol of compromise in the

stand-off between decarbonisation

and energy security.

Geopolitics plays a role here too:

the war in Ukraine led to price

spikes and a huge increase in Euro-

pean demand for LNG, causing oth-

er regions to lose out, particularly in

the global south. Pakistan is a good

example: last year, Pakistan LNG

issued a tender and received not a

single bid. To maintain security of

supply, Pakistan is now shifting

away from gas, which once ac-

counted for more than a third of its

power output, towards coal and oil.

The legal sector often acts as a ba-

rometer and that has never been tru-

er than in the LNG market in recent

months. We saw a signicant uptick

in the number and scale of contracts

agreed, price renegotiations, dis-

putes and declarations of force ma-

jeure as the scramble to secure sup-

ply created volatility. The LNG

infrastructure sector also saw in-

creased activity, including in the

construction of new receiving termi-

nals and oating storage regasica-

tion units (FSRUs). This investment

in expensive and complex LNG in-

frastructure in both Europe and Asia

indicates that LNG is expected to be

a major global source of energy for

at least the medium term.

Legislation has also reected the

LNG compromise – in July 2022,

the EU passed a law designating gas

and nuclear as sustainable energy

sources in the EU taxonomy. They

were originally omitted and their in-

clusion has proved controversial.

The European Commission is now

facing legal challenges to the desig-

nation, including from various envi-

ronmental groups. In October 2022,

Austria submitted a complaint to the

Court of the European Union, argu-

ing that gas and nuclear do not full

the requirements of the taxonomy

not to cause signicant environmen-

tal or climate-related harm and that

the last-minute nature of their inclu-

sion was unlawful. The law came

into force on 1 January 2023 and the

legal challenges are likely to take

several years.

There is also concern surrounding

the supply of critical minerals. In

May 2021, a report by the Interna-

tional Energy Agency on the role of

critical minerals in the clean energy

transition referred to a “looming

mismatch” between the world’s cli-

mate ambitions and the supply of

the minerals critical to achieving

those ambitions.

This has prompted a global race to

secure sufcient supply. Geopolitics

is a major factor here too. China is

currently the biggest producer of 12

out of the 18 minerals identied by

the UK as critical and it is estimated

that 75 per cent of the world’s cur-

rent supply of the most important

minerals is concentrated in three

countries, two of which are China

and the DRC. ESG-related issues

pose another difcult challenge in

this sector.

Governments are responding to

these challenges in a number of

ways. Partnerships between coun-

tries are emerging as a key feature.

These represent a compromise be-

tween energy independence and en-

ergy security.

A high-prole example is the Min-

erals Security Partnership between

10 countries, including the US, Aus-

tralia, the UK, Japan, Canada,

France and Germany but smaller

partnerships are springing up regu-

larly. Conversely, nations rich in

critical minerals, including Indone-

sia and Chile, are starting to use le-

gal tools such as export controls to

ensure security of supply and maxi-

mum return on their natural resourc-

es. There is also an increase in fund-

ing for domestic exploration

projects for critical minerals.

The response is not just apparent

at government level. We are seeing

companies, particularly car manu-

facturers, invest in mineral produc-

ers and then enter offtake arrange-

ments with them directly, in order to

ensure security of supply for their

EV battery production needs. A re-

cent example is Ford’s investment

in the Indonesian $4.5 billion Poma-

laa nickel facility.

Applying the legal barometer, the

rise in legal activism reects the fal-

tering progress towards net zero. In

the UK, the environmental law

charity Client Earth has launched a

variety of claims. These include a

successful action against the UK

government over gaps in its net zero

strategy, which Client Earth argued

breached the Climate Change Act

2008.

As companies grapple with the

tension created by the need for both

energy security and decarbonisation,

we are seeing an increase in enqui-

ries and activity relating to both the

trading of voluntary carbon credits

and carbon capture and storage as

alternative ways to move towards

net zero emissions, whilst the devel-

opment of sufcient clean fuel re-

sources continues.

There is recognition from the -

nancial sector of the role carbon

trading has to play here. In May

2023, the International Swaps and

Derivatives Association (ISDA) is-

sued a report from its ‘Future Lead-

ers in Derivatives Group’.

This acknowledged the conict

between on the one hand, the need

to generate both public and private

funding in order to achieve long-

term energy security and on the oth-

er, the damaging impact of the re-

cent volatility and geopolitical

pressures on sustainability invest-

ment. It advocated the scaling up of

the voluntary carbon credits market

to help generate funds for invest-

ment in projects aimed at carbon re-

duction or neutralisation. It also

called for both quality and legal

standardisation to help investors

better assess risks and to avoid gre-

enwashing.

Ultimately, sufcient supply of

clean renewable fuels should allay

energy security concerns and long-

term indications are positive. The

massive, $370 billion package of in-

vestments and tax credits offered by

the Ination Reduction Act in the

US and the announcement of the

strategically signicant policy ini-

tiatives in the EU Green Deal are

clear indicators of the longer-term

direction of travel for governments.

Investment in and support for the

scaling up of new fuels are also

growing: for example, the Austra-

lian government recently announced

a A$2 billion ($1.3 billion) Hydro-

gen Headstart programme to

“bridge the commercial gap” in the

development of some major hydro-

gen projects.

At the end of 2023, the COP 28

climate conference will see the con-

clusion of the rst global stocktake

since the Paris Agreement was

reached. This is a process evaluating

the degree to which nations are suc-

ceeding in meeting their objectives

to reduce greenhouse gas emissions.

Current signs suggest that the ur-

gency of the need for energy securi-

ty, particularly in the wake of Covid

and the Ukraine war, has prevailed

over the importance of decarbonisa-

tion in the short-term. Supply re-

mains a key challenge to be ad-

dressed. But there are causes for

optimism looking forward.

Brian Perrott and Amanda Rath-

bone, are Partner and Knowledge

Counsel, respectively, at HFW.

The energy industry is on the vital journey from reliance on fossil fuel to the development of a sufcient global supply

of clean energy. At the same time, it faces signicant geopolitical pressures caused by, among other things, the Covid

pandemic and the Ukraine war. Those pressures have increased governments’ focus on achieving energy security

(and preferably, energy independence). The result of these converging and conicting challenges seems to be

compromise in the short-term – but it is encouraging to see signs of medium and longer term solutions emerging.

HFW’s Brian Perrott and Amanda Rathbone explain.

Energy security vs decarbonisation:

challenge and compromise

THE ENERGY INDUSTRY TIMES - JUNE 2023

Industry Perspective

Perrott: the rise in legal

activism reects the faltering

progress towards net zero

Rathbone: signicant policy initiatives are clear indicators of

the longer-term direction of travel for governments

some funding and/or funding support.

One example is the UK government is

committed to supporting investments

in clean energy. In March, it published

a Green Finance Strategy and is pro-

viding funding for a variety of proj-

ects, including a £160 million ($198

million) investment scheme for oat-

ing offshore wind manufacturing.

Commercial banks and multilateral

nancial institutions are also increas-

ingly willing to lend. Three of the

many examples are the US Depart-

ment of Energy loan guarantees for

offshore wind projects, the European

Investment Bank €210 million ($225

million)nancing of three oating

offshore wind farms, and Mizuho,

MUFG and DBJ’s joint nancing of

the ¥175 billion ($1.3 billion) Kitaky-

ushu-Hibikinada Offshore Wind

Farm in Japan.

Insurance companies, pension

funds, private equity rms, and cor-

porate investors and other hopeful

investors are aggressively looking for

opportunities too. For example, on

the Asia private equity side, Bain &

Company evaluated that while deal

value fell 44 per cent year-on-year in

2022, utilities and renewables deals

rose 47 per cent year-on-year, includ-

ing a Macquarie Group offshore wind

investment of over $1 billion.

US offshore wind development has

been slower than Europe and Asia.

This is despite an offshore wind en-

ergy development resource of as

much as 4250 GW according to The

National Renewable Energy Labora-

tory. Policy inconsistency, partisan

politics, and interest groups have

slowed the development of clean en-

ergy in the country. At the executive

level, the federal government’s imple-

mentation of climate laws and poli-

cies is strongly affected by the party

in power. This dynamic continues in

the legislature at both the national and

state level, with inclination towards

climate action divided along party

lines. The fossil fuel industry is a

major interest group with signicant

inuence over politicians. It spends

huge amounts of money lobbying

against clean energy policies and pro-

climate politicians. President Biden’s

Ination Reduction Act, which in

signicant part aims to promote clean

energy, could be diluted in the coming

years due to these three hurdles. It

could ease in the future, but change

may be slow.

Europe’s consistent and robust rate

of increase should remain consistent.

In fact, Europe has more than doubled

down when it comes to its commit-

ment to reduce emissions despite the

massive political, economic, and cul-

tural variances.

The latest major climate action from

the bloc was the European Green

Deal. It aims at ensuring “no net emis-

sions of greenhouse gases by 2050”

and “economic growth decoupled

he global wind power prole is

impressive. Generation capac-

ity has been growing at a fast

pace globally. It jumped to 832 GW in

2021 from 181 GW in 2010, a share

of about 10 per cent of the world’s

total, according to the International

Energy Agency (IEA), generating

over 1870 TWh. About 93 per cent was

onshore wind capacity and 7 per cent

was at offshore wind farms. Asia was

48 per cent of the total, Europe 28 per

cent and North America 19 per cent;

China alone had a 40 per cent share,

according to BP’s ‘Statistical Review’.

Global offshore wind is increasingly

becoming prominent. Capacity was

63.2 GW in 2022 vs. 12.2 GW in

2017, according to the Global Wind

Energy Council (GWEC), or a ve-

year compound annual growth rate of

almost 40 per cent. The bulk of the

installed capacity was in the UK (33

GW) and other northern European

countries, including Germany (9

GW), Denmark (7 GW) and the

Netherlands (5 GW).

The outlook through 2050 for global

offshore wind ranges from 1500 GW

to 2400 GW. The low end of the range

would mean an annual addition of at

least 50 GW or 12 per cent per year.

The consensus forecast view is that

over half will be built in the Asia Pa-

cic region. China has the leading

role in the region. The nation has the

potential for technological develop-

ment of offshore and deep offshore

wind power resources of about 2250

GW, a number quoted in 2022 by

many domestic news sources such as

the China Electrical Equipment In-

dustry Association. Western Europe

should become the second largest

market for offshore wind power, with

a forecast by WindEurope of 300

GW, including 100 GW in the UK.

North America would be a distant

third with expectations ranging be-

tween 40 GW to 50 GW, although

this should have signicant upside

given the region’s offshore and deep

offshore wind resources.

The challenges to more additional

capacity are well publicised and un-

derstood. Chief among these are na-

tional policy frameworks, infrastruc-

ture bottlenecks, and high generation

costs. In some jurisdictions public

and environmental concerns also

feature. Policy, infrastructure, and

cost issues are interdependent factors

and impact each other. The absence of

government policy, or a lack in clarity

in the policy, prevents or discourages

investment in the sector and raises the

risk premium. This also negatively

impacts investments in electric power

distribution infrastructure which in

turn also increases the cost of capital.

These two factors in turn impact ad-

ditional capacity, translating in higher

generation costs. Fortunately, the cost

per unit generated by offshore wind

farms has been falling and is expected

to continue to decline. The IEA and

the International Renewable Energy

Agency (IRENA) expect that between

2021 and 2050, it will drop at least 50

per cent in the US and in India to $60/

MWh, 33 per cent in the EU to $60/

MWh, and 65 per cent in China to

$35/MWh.

Ample funding availability is an-

other bullish factor for offshore wind

globally. There seems to be no short-

age of capital. Recent news ow on

the sector shows that key nance

providers and investors are keen.

Governments are willing to provide

from resource use”. The European

Commission has stated that offshore

renewable energy plays a key role in

reaching its ambitious energy and

climate targets. It set out a clear

roadmap for how to achieve this goal

including increase its offshore renew-

able energy capacity from 12 GW to

60 GW by 2030 and 300 GW by

2050.

Asia’s offshore wind construction

has outstripped the rest of the world.

The region’s efforts may not be as

coordinated as those in Europe but

growth in the region should continue

to be faster than the rest of the world.

Just ve years ago offshore wind was

a topic in only a few Asian power

markets – mainland China, Taiwan

and Japan. Today, there are plans of

active projects in a myriad of other

markets, including Australia, India,

the Philippines, South Korea, and

Vietnam.

IRENA and other institutions expect

Asia to account for 50 to 60 per cent

of global offshore wind installed ca-

pacity in the coming one or two de-

cades. Experts are generally bullish.

The offshore wind resource and -

nancing availability in the region is

plentiful and, crucially, more govern-

ments are setting facilitating policy

frameworks. One expert, GWEC’s

Mark Hutchison, an Asia energy in-

dustry veteran, believes that the re-

gion is seeing positive change (listen

to ‘The Asia Climate Finance Podcast’

Ep.29 for details).

Improving policy frameworks by

some electricity market regulators in

Asia have cut the risk premium.

Coupled with the massive growth

potential, better policies have made

some of these markets highly attrac-

tive to foreign investors, especially

from Europe. They include investors

and equipment suppliers such as

Copenhagen Infrastructure Partners,

EDP, ENGIE, ENI, Equinor, Iber-

drola, Mainstream Renewable Pow-

er, MHI Vestas, Ørsted, RWE, Sie-

mens Gamesa, TotalEnergies, and

Vattenfall.

The current or planned investment

by European companies also means

knowledge transfer, and building

long-term links between the two re-

gions in offshore wind projects. Long

term, this linkage could include China.

The nation has much to offer espe-

cially in its expertise at reducing off-

shore wind cost given the sheer size

of its investments domestically. At the

moment though, unfavourable geo-

politics prevent offshore wind invest-

ments in both directions.

Joseph Jacobelli is Managing Partner

at single-family ofce Bougie Impact

Capital. He is an Asia-Pacic energy

markets expert with over 30 years’

experience. He is author of ‘Asia’s

Energy Revolution’ and is the host of

‘The Asia Climate Finance Podcast’.

THE ENERGY INDUSTRY TIMES - JUNE 2023

Energy Outlook

Offshore wind is one of the fastest-growing forms of clean energy globally but different regions are on different paths.

While the US capacity is expected to grow, the outlook is uncertain due to politics. Europe, on the other hand, should

see consistent development. Asia’s additions will outstrip that of the other two markets substantially. Furthermore,

linkages between Europe and Asia should rise exponentially, says Joseph Jacobelli.

Offshore wind: different

strokes for different folks

Global offshore wind capacity

in operation (cumulative)

Source: Global Offshore Wind

Report 2022, World Forum Offshore

Wind, 20 February 2023

or the past 25 years, propo-

nents of geothermal have ar-

gued that geothermal energy

offers a vast, largely undeveloped

resource for transitioning the global

power sector away from fossil fuels

and toward a renewable energy fu-

ture based on reliable, 24/7 base

load power supply. In practice,

however, the results have been un-

derwhelming at best.

The installed base of geothermal

power plants was estimated, as of

December 31, 2021, to be 15.85

GWe or 0.5 per cent of total renew-

able energy installations worldwide.

While this small total can be partly

attributed to the huge decline in

costs of solar PV and wind power

plants over the past decade, a lack

of commercially available technolo-

gy for bringing geothermal resourc-

es into production everywhere, is

also a major factor.

Yet a new enthusiasm is starting to

emerge. IRENA, for example, be-

lieves that “geothermal energy

holds a unique place in the renew-

able energy ecosystem” offering

sources of heat for generating elec-

tricity and meeting space and water

heating needs at high efciency

with low-to-no GHG emissions. It

is also credited as “a long-lasting

sustainable source when properly

managed” that can meet power de-

mands as a base load plant with

load following capabilities.

The main reason for the latest

surge in interest in geothermal power

is the development of new geother-

mal technologies that have either re-

cently entered into commercial oper-

ation or are on the cusp of doing so.

One of the most exciting develop-

ments over the past ve years has

been the demonstration of a deep

well, closed loop geothermal energy

transfer system developed by Eavor

Technologies (Eavor), a small Ca-

nadian start-up company based in

Calgary, Alberta.

With support from the Canadian

government and the provincial gov-

ernment of Alberta, Eavor demon-

strated the technical feasibility of

Eavor-Lite, a pre-commercial, proof-

of-concept closed-loop plant, which

was installed and commissioned be-

tween September and December

2019 and then operated for a

16-month period to conrm that key

technologies worked as expected.

Eavor-Lite consists of two bore-

holes located 2.5 km apart and

drilled to a depth of 2.4 km. Each

borehole is connected to two hori-

zontal legs, known as multilaterals.

The Eavor-Lite project has notably

successfully demonstrated several

key technologies:

n Magnetic ranging technology,

which allowed the precise intersec-

tion of each borehole with the two

multilateral legs;

n Rock-Pipe sealant system used

to seal the multilateral legs to the

boreholes and then seal the inside

walls of each multilateral, minimis-

ing the intrusion of the Eavor-Loop

working uid into the rock forma-

tion and debris from the rock for-

mation into the working uid. Eav-

or claims Rock-Pipe will provide a

secure and robust seal for a 30-year

operating life;

n Using a natural thermosiphon

process to continuously circulate a

proprietary working uid through

the closed loop system without the

need for any mechanical pumping

while achieving close to 100 per

cent of the expected heat transfer by

conduction alone.

According to Eavor, the Eavor-Li-

te project was “executed successful-

ly, on-time and on-budget, demon-

strating that a commercial-scale

Eavor-Loop can be drilled, sealed,

and operated purely by a thermosi-

phon effect with thermodynamic re-

sults in agreement with the predict-

ed output from simulations.”

Although the Eavor-Loop system

is capable of also meeting the hot

water requirements of district heat-

ing centres and large commercial/

industrial end users, Eavor’s priori-

ty is to produce medium to high

temperature steam for generating

base load power from dispatchable

geothermal power plants “almost

everywhere”.

A number of other start-up compa-

nies claim to be developing ad-

vanced geothermal systems. Some

of them are also applying closed-

loop systems. However, none have

progressed toward commercialisa-

tion at the pace that Eavor has. Nor

have these other companies solved

the many technical issues such as

operating under natural thermosi-

phon and developing a sealant sys-

tem that avoids the necessity of cas-

ing the multilaterals, as Eavor has.

The generic commercial version

of the Eavor-Loop system is similar

to Eavor-Lite in a number of impor-

tant ways. However, the boreholes

of the commercial Eavor-Loop sys-

tems will be drilled to much deeper

depths, ranging from 4 to 8 km and

will be positioned only 50-100 m

apart, not 2.5 km as adopted for

Eavor-Lite. Also, the radiator-like

multilaterals will have up to 12 legs

versus two multilateral legs for

Eavor-Lite.

The complete Eavor-Loop system

resembles two vertical pipes con-

nected to two or more sealed radia-

tors. Eavor uses a proprietary work-

ing uid, which it injects at the

surface into the inlet borehole. The

working uid circulates continuous-

ly through the Eavor-Loop system

where it absorbs heat via conduc-

tion from the rock formation that

the radiator-like multilaterals have

been drilled into. Then, through a

natural thermosiphon mechanism,

the heated working uid rises to the

surface without the need for any

mechanical pumping.

The working uid is then passed

through a heat exchanger at the sur-

face where the absorbed heat is re-

leased and used to convert a second

working uid in a separate closed

loop system to generate steam for

driving a steam turbine-generator

set and producing electricity. De-

pending on the temperature of the

steam coming from the surface heat

exchanger, the project owner will

decide among three options for gen-

erating electricity (a) ash cycle

steam plant, (b) a dry steam cycle

power plant, or (c) a binary cycle

plant. These three power plant op-

tions are commercially available

and not considered as part of the

Eavor-Loop system.

The Eavor-Loop system also has

other benets. Notably, according to

Eavor there is no induced seismicity

that fracking or reinjection of brines

back into the inlet borehole might

cause. Environmental impact is also

limited – there are zero emissions of

subsurface CO

or other GHGs into

the atmosphere, and no environ-

mental impact on subsurface water

resources. The system has a very

small surface footprint.

Eavor plans to install its Eavor-

Loop system in both sedimentary

(sandstone or limestone formations)

and igneous (basalt or granite for-

mations) rock. The specic layout

of the system will vary somewhat

by project according to geological

conditions and whether the project

will be for direct heat utilisation or

the supply of base-load electricity.

With the successful completion of

its Eavor-Lite demonstration proj-

ect, Eavor has signicantly de-

risked its Eavor-Loop system. New

projects (and funding) appear to be

owing and that will de-risk Eavor-

Loop 2.0, the most advanced of two

commercial versions and the pre-

ferred option for power generation.

Eavor’s rst commercial project is

under construction at a site near Ge-

retsried, a small town in Bavaria,

Germany. After another company

failed to tap into the low tempera-

ture geothermal heat at the Ger-

etsried site, Eavor was solicited to

complete the project using its Eav-

or-Loop system. For this project,

Eavor will drill its multilaterals into

a sandstone sedimentary formation

at a depth of around 2.5 km. Con-

struction started in October 2022

and drilling of the new wells will

start in July 2023 with rst energy

production expected in Q4 2024.

As part of the commercial terms

of its Geretsried project, Eavor has

been awarded a feed-in-tariff of

€22.4 cents/kWh (~US21 cents/

kWh). It has also been awarded a

grant of €91.6 million from the Eu-

ropean Innovation Fund. The proj-

ect will produce 8.2 MWe, with a

direct heat utilisation component

waiting in the wings.

It is reported that Eavor is assess-

ing other projects in northwest Eu-

rope, perhaps up to 50 projects ac-

cording to one article. Success

appears to breed more success for

Eavor.

In the US, Eavor has successfully

demonstrated its Eavor-Lite proof

of concept system at a high geother-

mal gradient site near Animas, New

Mexico (NM), which Eavor refers

to as Eavor-Deep. For this proof of

concept project, Eavor drilled a sin-

gle borehole to a true vertical depth

(TVD) of 5480 m. The temperature

of the basement rock at 5480 m

TVD was 250°C, a much greater

depth than experienced during the

Rocky Mountain House demo.

Eavor used the project to demon-

strate its advanced drilling technol-

ogies and at a much greater depth

and basement rock temperature than

its Eavor-Lite project in Alberta.

The company says it successfully

demonstrated its drilling methods

and technologies at 5480 m TVD.

The successful demonstration of

Eavor-Lite at Rocky Mountain

House in Alberta, the start of con-

struction on Geretsried project, and

the completion of Eavor-Deep in

January, have “put the wind at Eav-

or’s back”. To the extent that its -

nancial backers – Chevron, BP,

Vickers, Temasek, and others – are

willing to provide nancing to sup-

port the implementation of new

Eavor-Loop projects on commercial

terms, Eavor can now claim that its

Eavor-Loop system is commercially

available.

It may take a bit more time before

the Eavor-Loop system can be de-

clared as commercially proven, as

additional operating experience is

required in some key areas.

However, based on evidence to

date, the smell of success is in the

air and with it the prospect that geo-

thermal energy may nally play its

long promised role as supplier of

base load, dispatchable power that

will lead to a signicant decarboni-

sation of the power systems of the

World – anywhere and everywhere.

Bart Lucarelli, PhD, is Managing

Director, Roleva Energy.

Although geothermal

energy has long

held the promise of

baseload carbon-

free energy, it has

failed to make any

real inroads in the

global power mix.

New geothermal

technologies,

however, are driving

renewed interest.

Roleva Energy’s

Bart Lucarelli, PhD,

highlights one that

looks particularly

promising – a deep-

well, closed-loop

geothermal energy

transfer system

developed by Eavor

Technologies.

Saving geothermal from remaining a

renewable energy afterthought

THE ENERGY INDUSTRY TIMES - JUNE 2023

Technology Focus

Evolution from Eavor-Lite to

Eavor-Loop 1.0 and

Eavor-Loop 2.0.

Source: Matthew Toews and Michael

Holmes, Eavor-Lite performance

update and extrapolation to

commercial projects (Eavor

Technologies Inc.), 2021

THE ENERGY INDUSTRY TIMES - JUNE 2023

Final Word

have not yet had the opportunity

to peruse the International Energy

Agency’s recently launched

‘World Energy Investment 2023’ re-

port but the180-page tome is on my

‘must read’ list. Congratulating his

staff on the report, IEA Executive Di-

rector Fatih Birol said: “It reads so

well, it doesn’t seem like a report on

energy; it reads like a poem.”

The headline takeaway from the

report is that there has been a “dra-

matic shift” in the ratio of fossil in-

vestment versus clean energy. Ac-

cording to the IEA, just ve years ago,

which Birol says “is like yesterday in

the energy world”, total energy in-

vestments equalled about $2 trillion

with an even split between fossil fuels

and clean energy. Today, that ratio is

1:1.7, i.e., while investment in fossil

fuels has remained at about $1 trillion,

investment in clean energy has surged

to $1.7 trillion.

This, says the IEA, can be attributed

to three key drivers: the falling costs

of wind and solar, which the IEA says

are now competitive almost every-

where; government policies in reac-

tion to the energy crisis, exacerbated

by Russia’s war on Ukraine; and

thirdly, global industrial strategies

such as the US Ination Reduction

Act, the EU Green Deal Industrial Plan

and Japan’s Green Transformation

strategy, aimed at fostering domestic

clean energy technology manufactur-

ing capacity.

Clearly the new clean energy econ-

omy is emerging, and much faster than

many realise. Birol noted that at last

month’s G7 Summit in Hiroshima,

Japan, leaders from the world’s seven

wealthy nations plus leaders from

several other countries including

Brazil, India and Indonesia, all agreed

that clean energy is the way forward.

But with the direction of travel

widely agreed, in the face of an im-

minent existential climate crisis, speed

is now the order of the day. While the

IEA’s investment report may read like

a poem, there was nothing poetic about

the remarks from the opening session

at the recent Innovation Zero confer-

ence in London, UK.

Prof. Johan Rockstrom, Director, at

Potsdam Institute for Climate Impact

Research (PIK) and Prof. Sir David

King, Founder and Chair of the Centre

for Climate Repair at the University

of Cambridge, described a chilling

picture of a world that has failed to

keep global warming below the 1.5°C

limit stipulated in the 2015 Paris

Agreement.

Rockstrom stressed that 1.5degC

was a limit that the world will “begin

touching” next year. He also warned

that it was not a target but a tipping

point, beyond which the effects of

climate change would be irreversible.

Commenting on the UN assessment

that there was no credible pathway to

1.5°C in place, and that even if current

pledges for action are delivered in full

by 2030, there could still be a rise in

global temperatures of 2.5°C by the

end of the century, Rockstrom said:

“Once we go beyond 1.5°C, we go

from moderate risk to high risk that

the impacts on humans and the

economy will be permanent and ir-

reversible, causing self-reinforced

warming. We are at 1.2°C today and

are on a pathway that will take us way

beyond 1.5°C.

“Science advances with a lot of

uncertainty and the climate system is

very complex, but there is one conclu-

sion that is without any uncertainty

and it’s that a 2.5°C surface tempera-

ture rise is a disaster. It would exceed

the warmest temperature on Earth

over the last four million years. It

would lead to a complete melting of

the big ice sheets and at least a 10 m

sea level rise, a collapse of the rain

forests and marine biology… and

over one third of the equatorial re-

gions would be uninhabitable.”

Prof. King added: “We know the

Arctic Circle is heating up at 4-5 times

the rate of the average for the planet.

Today it’s over 3°C above the pre-in-

dustrial level. This means the ice on

Greenland is now melting – it could

be irreversible without human inter-

vention. That alone is a 7-8 m sea

level rise.”

Later in the conference, Dr Nina

Seega, Director, Centre for Sustain-

able Finance at Cambridge Institute

for Sustainability Leadership (CISL),

spelled out what this means at the

local level. She said: “1.5 degrees in

the UK means a 0.5 m rise in sea

level. That means my home in Cam-

bridge becomes a seaside destination;

I don’t have to move, the sea will

come to me.”

According to Prof. Rockstrom it is

still just about possible to hold 1.5°C,

although the window is rapidly clos-

ing. Scientists say there is a global

carbon budget of around 300 billion

t of CO

. With the world emitting over

40 billion t of CO

every year, the

world is expected to permanently

pass the 1.5°C limit somewhere

around 2030-2035. The next decade

is therefore critical.

Prof King said: “Greenhouse gas

levels in the atmosphere are close to

double what they were in the pre-in-

dustrial period. For you and I, that’s

like putting a second duvet on your

bed. You will get too hot. We have just

put a second duvet on our planet.”

Clearly deep and rapid emissions

reduction is absolutely vital. “We are

doing good things but we must do it

5-10 times faster,” said Prof. King.

For this to happen everyone needs to

play their part. Innovations in carbon

removal technologies will be neces-

sary and such technologies will have

to go from lab to commercial roll-out

faster. One speaker at Innovation Zero

said: “You need to get innovations out

of the lab as soon as you can… spend

less time planning and more time do-

ing. Do six months of experiments and

then iterate.”

Governments will also need innova-

tive policies to accelerate the shift to

clean technologies across all sectors.

Norway is an example of where

policy has resulted in nine out of ten

cars now sold in the country being

either electric or hybrid.

The continued reduction of fossil

fuels in the energy mix will also need

to go faster. And here is where many

of the oil and gas majors can arguably

do more. They can certainly be leaders

in technologies such as carbon capture

utilisation and storage, low emissions

hydrogen and biofuels.

The IEA notes that by 2030, for a

1.5°C scenario, for every $1 invested

in fossil fuels, there will be $9 going

into different aspects of clean energy.

It notes, however, that many oil and

gas majors are typically investing less

than 5 per cent of prots in clean

energy.

This is particularly worrying when

considered in the context of recent

comments from BP’s Chief Executive

Bernard Looney. In February BP

scaled back its climate ambitions and

last month Looney told the Economic

Club of Washington, DC, that halting

oil production now would be “simply

impractical”. He noted, however, that

“with that said, there is an issue called

carbon . . . It’s a real issue. It needs to

be tackled, and that’s why we want to

transition.”

Although there is variation in invest-

ment in clean technology across dif-

ferent oil and gas companies, the IEA

believes there is scope for clean invest-

ment to be higher than the 5 per cent.

Birol said that more than half of the

$4 trillion generated by oil and gas

companies last year – which is more

than twice their average – went to

dividends, share buybacks and debt

repayment.

“Less than half went to investments,

and this is something we all need to

highlight. If we hear companies are

not investing because of a lack of

money, this is not true… many have

announced they would like to be part

of the solution to the climate change

problem, which is very welcome. We

would like to see all energy stakehold-

ers be part of the coalition to address

the common challenge of climate

change.

“But when we look at the numbers,

we see that the amount of money going

to clean energy investments in the

total investment of the oil and gas in-

dustry is less than 5 per cent today. So

there is a need [for them] to elevate

either the numbers or calibrate the

statements.”

Unfortunately, as is often the case,

when all is said and done, there is

usually a lot more said than done. And

in the current climate crisis, beautiful

words are not enough.

Poetry not in motion

Junior Isles

Cartoon: jemsoar.com