Oil major BP will help UK achieve emissions targets
2023.01.24 03:18
Oil major BP will help UK achieve emissions targets
By Tiffany Smith
Budrigannews.com – BP, a major oil company plans to construct a massive carbon capture project beneath the North Sea, which would be essential to the achievement of Britain’s emission reduction targets. Orsted, a powerhouse (OTC:) aims to construct a massive offshore windfarm to assist the nation in achieving its renewable energy goals.
The issue is that the seabed is full twice, so something has to give.
According to planning documents reviewed by Reuters, the companies involved, and UK authorities, Britain granted preliminary licenses for both proposed projects more than a decade ago when an overlap of approximately 110 square kilometers on the sea floor was not considered to be an insurmountable obstacle to either technology.
However, BP and Orsted are currently engaged in a dispute over primacy in this “Overlap Zone,” which is shared by the Endurance carbon capture and storage (CCS) sites and the Hornsea Four windfarm off the coast of the English county of Yorkshire.
Studies that highlighted the risk of boats used to monitor carbon leaks colliding with seafloor-mounted wind turbines have fueled the standoff. The North Sea Transition Authority (NSTA), which oversees offshore energy activities, came to the conclusion last year that large crossovers between such endeavors were impractical with the technology at hand.
England’s Crown Estate licensing agency told Reuters that “at the time these rights were granted, it was unclear how the emergent technologies would develop,” referring to the windfarm and CCS licenses that the government granted in 2010 and 2011, respectively.
Both BP and Orsted are unwilling to give up territory in exchange for a more expensive boat-free monitoring system because they believe that doing so would hurt their business prospects.
According to the companies involved and a North Sea green transition expert, this largely unreported conflict poses a threat to the determination of Britain to achieve its climate goals. By itself, endurance’s capacity could account for at least half of the country’s goal of capturing 20-30 million tonnes of CO2 annually by 2030.
According to John Underhill, geoscientist and director of Aberdeen University’s Centre of Energy Transition, “resolving the conflict between the renewable technologies, and having a due process that determines whether a windfarm, carbon store, or other source of energy has primacy in an area of overlap is crucial if the UK is going to achieve its net-zero targets”
The experts told Reuters that the conflict between BP and Orsted could also signal other conflicts in an increasingly crowded North Sea.
They stated that Britain’s eastern seaboard, with its favorable geological formations for carbon storage and shallow waters for fixed-bottom offshore windfarms, will be a key battleground for competing green technologies in the coming years.
Chris Gent, policy manager at the European carbon capture trade association CCSA, said, “Offshore wind has obviously come forward quite quickly since 2015, this has resulted in an increased pressure for sea floor space.” He added that this presented a real challenge for licensing authorities.
Orsted, a Danish renewable energy company, and BP, a British company, say they will work together to resolve their dispute, which will come to a head in the coming months; BP and its partners intend to make a final investment decision on Endurance this year, while British authorities are scheduled to decide on Feb. 22 whether to give Hornsea Four the final go-ahead.
Not only are climate goals at risk, but also a significant amount of money is dependent on the projects, which together would cover approximately 500 square kilometers of the seabed. Orsted estimated the cost of its windfarm at up to 8 billion pounds ($9.9 billion), while BP did not provide a cost estimate for Endurance.
The issue was acknowledged by the British government.
The Department for Business, Energy, and Industry told Reuters that the government had set ambitious goals for the deployment of offshore CCS and windfarms, which were both crucial to its efforts to reach net-zero emissions by 2050, when asked how two such projects could end up in the same area.
It added, “We are aware that there may be technical challenges to the coexistence in some cases.”
UK authorities established an offshore wind and CCS forum in 2021 with regulators and industry figures in an effort to improve coordination and resolve conflicts.
BP, Orsted, and Crown Estate told Reuters that they had been talking about coexistence solutions for a while. However, they didn’t say how their views had changed over the past decade regarding the risks of overlap between the technologies.
A group representing BP and its Northern Endurance Partnership (NEP) project partners provided a report that was included in an Orsted planning document that was published by UK authorities on January 17. The report stated that the CCS scheme forbade sharing the territory.
According to the July 2022 report from Net Zero Teesside, “It was originally anticipated that it could be possible for Hornsea Project Four and the NEP Project to co-exist in the Overlap Zone.” However, after conducting extensive research, BP and its NEP partners have come to the conclusion that coexistence is not possible throughout the entire Overlap Zone.”
In order for CO2 injection to begin at the project in 2026 as planned, BP has expressed doubt that a compromise can be reached in time, stating that it requires certainty regarding the fate of the zone.
In a March 2022 submission to UK authorities, it stated, “It is not realistic for any new robust and reliable solution to come forward within this or a comparable timescale.” “If the risks associated with the project’s financial viability are high,” it added in a subsequent March 2022 submission. “NEP will be unable to attract debt financing.”
In its planning documents, which were released the same month, Orsted stated that Hornsea Four’s annual energy production would be cut by 2.5% with a sparser turbine layout that could address issues with boat access.
It added, “This would have the effect of making the project significantly less competitive in the marketplace.”
The windfarm’s planned capacity of 2.6 gigawatts (GW) would assist Britain in achieving its objective of increasing offshore wind capacity from 11 GW in 2021 to 50 GW by 2030. This endeavor necessitates a significant investment in brand-new North Sea offshore infrastructure.
Discussions continue despite the difficulties.
During ongoing commercial discussions, BP stated that it was committed to a solution that was agreeable to both parties, and Orsted stated that it was certain that an agreement could be reached to allow both projects to proceed.
Regulators and industry professionals assert that projects that share ground with wind and CCS hold out hope.
The NSTA regulator emphasized that technological advancements could alter the calculation, even when it poured cold water on large shared areas. In addition, it stated that alternative CO2 monitoring methods were still in the development stage or were more expensive, which would raise costs in a CCS industry where profits are already scarce.
Ocean bottom nodes (OBN), which are attached to the seabed and compete with seismic data boats, may be able to perform most of the work. However, senior geophysicist Ronnie Parr of the NSTA stated that although OBN costs were anticipated to decrease, they would probably still cost three to four times as much as boats.
The authority was clear.
It stated in its report for August 2022, “Based on current technologies, large physical overlaps between carbon storage sites and windfarms are currently considered not to be feasible.”
The government’s planners are going to make an important decision next month about whether or not to give Hornsea Four the final go-ahead.
The government designated the East Coast Cluster in 2021 for a speedier development process, despite the fact that Endurance and its umbrella project also face regulatory obstacles.
According to Underhill at Aberdeen University, who emphasized the need for additional CCS sites if Britain is to meet its carbon-capture targets, there is no sign of a breakthrough between the companies, so the same issue may arise elsewhere.
According to the NSTA and Underhill, other similar co-location sites include the planned Acorn carbon project off of Scotland, which overlaps with the MarramWind offshore windfarm.
(LON:) Shell ScottishPowerRenewables, which got the first rights to build MarramWind a year ago, said it was still talking to Acorn. Shell, who is also working on Acorn, said that the two projects were still in their infancy and that there was not much overlap.
Underhill also mentioned Pickerill, a defunct gas field, as a possible CCS site in the future. However, he said that the plans to build the Outer Dowsing windfarm could cause problems.
According to David Few, the project director for Outer Dowsing, the windfarm is on track to power 1.6 million homes by the end of the decade.
