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Oil to wind technology transfer in motion

01st May 2012

Oil firms look to expertise of offshore wind energy developers for inspiration on subsea installation projects

The UK is increasing its renewables investments after its oil and gas production shrunk more than half since peaking in 1999 at about 4.5m barrels of gas and oil equivalent a day

Oil service companies led by Technip SA and Subsea 7 SA for the first time are working with wind energy developers in the North Sea’s USD 18.5 billion a year market.

The offshore engineers plan to exploit the similarities between building undersea oil installations and constructing offshore wind farms and have both established renewable energy units, Bloomberg reported.

Petrofac Ltd. (PFC) also offers expertise to wind developers in the North Sea, where fossil fuels first discovered in 1966 are being depleted as clean energy demand rises.

“The synergies available between offshore wind and oil and gas are most apparent in the North Sea,” said Jayesh Parmar, a London-based consultant at Baringa Partners LLP. “It makes sense here to be operating in both areas.”

The move into renewable energy comes after Britain’s oil and gas production shrunk more than half since peaking in 1999 at about 4.5 million barrels of gas and oil equivalent a day to about 2.2m barrels now, according to the Oil & Gas UK industry group. Production from Britain’s continental shelf has fallen about 6.2 per cent annually the past 23 years.

Drawing on offshore energy expertise and government mandates to raise the amount of power derived from clean energy, countries around the North Sea led by Britain plan to have 35.5 gigawatts of offshore wind projects by 2020 from 2.9 gigawatts today, according to Bloomberg New Energy Finance.

The total cost of the increase will be EUR 127bn and the facilities would provide 3.2 per cent of the EU's electricity demand.

“The offshore wind developers are now seeing the value of having the oil and gas companies getting involved,” Subsea7 Renewables Vice President Bob Dunsmore said in a London interview. “They’re moving into the environment we work in.”
 
For a 50-turbine offshore wind installation, as much as 25 per cent of the capital expenditures are services work that can easily be done by oil and gas companies, Parmar said.

The European Wind Energy Association (EWEA) predicts at least 446,000 will work in industries related to North Sea offshore wind by the end of the decade, more than double today’s 192,000.

Conversely, countries like the US and Brazil with major oil and gas basins have yet to develop offshore wind projects of significance due to permitting delays and local opposition.

Brazil, set to become the fourth-biggest wind turbine market this year, is pursuing onshore farms, which are cheaper to build for power than coal-fired plants.

So the focus remains on the North Sea for offshore wind and related grid connections as Britain targets renewable energy for a 7-fold increase in offshore wind to 13,000 megawatts by 2020.

At least 114 billion euros, and up to EUR 152 billion, of investments are needed in the next eight years to build as much as 35,500 megawatts of offshore wind in the North Sea, including the UK and Germany, according to New Energy Finance.

Germany, ending nuclear power production following last year’s Japan disaster, wants to boost sea wind production to 10,000 mw, with turbines contributing as much as 5.7 per cent of gross energy production. France wants to go from no offshore wind production to 6,000 mw in eight years.

 

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