Offshore energy integration can deliver 30% of UK’s net zero target

Aug 20 2020


The integration of offshore energy systems, including oil and gas, renewables, hydrogen and carbon capture and storage, could contribute to deliver approximately 30% of the UK’s total carbon reduction requirements needed to meet the 2050 net zero target.

The Oil and Gas Authority’s (OGA) Energy Integration Project report in collaboration with Ofgem, The Crown Estate and the Department for Business, Energy and Industrial Strategy (BEIS), also highlights the additional potential for offshore renewables (wind, wave and tidal) to contribute approximately a further 30% towards the UK’s net zero target. This means the UK Continental Shelf (UKCS) could support, in combination with complementary investments in onshore energy infrastructure, around 60% of the UK’s decarbonisation requirements.

There are over 30 energy integration projects already underway across the UKCS, with more than 10 actively being engaged by the OGA alongside this study.

Importantly, the report also concludes that not only is the close co-ordination of these technologies valuable in terms of energy production and cutting greenhouse gases, but that their integration would help technologies become economically more attractive.

The findings of the report include:

  • Oil and gas platform electrification is essential to cutting sector production emissions in the near term, and critical to the industry’s social licence to operate. Electrification can abate operational emissions by 2-3MtCO2 p.a. by 2030. This is the equivalent of reducing 20% of today’s production emissions, rising to 40% by 2030.
  • Oil and gas capabilities, infrastructure and supply chain are crucial to energy integration, and can potentially support further offshore renewables expansion, including floating windpower.
  • Re-using oil and gas reservoirs and infrastructure can accelerate Carbon Capture and Storage (CCS), connecting to onshore net zero hubs and saving 20-30% Capex on specific projects.
  • To reach the CCS scale in support of net zero, the UK needs to develop around 20 individual CO2 stores for a total capacity of over 3GtCO2 by 2050 (with large CCS projects featuring multiple stores)
  • Blue hydrogen (produced from natural gas) has the potential to decarbonise around30% of the UK natural gas supply by 2050, potentially supporting circa half of CCS expansions in the same timeframe.
  • Green hydrogen (from renewables) can support and enable the significant expansion of offshore renewables in the 2030s and beyond, providing an efficient storage and energy transportation solution. Reducing the costs of the technology involved (electrolysis) would be needed to support the faster uptake of this technology.

The report includes an Annex specifically covering Carbon Capture and Storage which found that:

CCS can be critical to achieve UK net zero, and UKCS role is key

  • 75-175 MtCO2 / yr captured and stored by 2050, or up to one third of the current UK’s emission baseline
  • 78 GtCO2 potential storage capacity on the UKCS, could be sufficient for 100s of years of UK’s demand

Accelerating projects would be needed to achieve expected CCS volumes

  • >2 pilots followed by >2 commercial-scale projects developed by 2030 necessary to provide critical learnings for the subsequent expansion
  • 130 MtCO2 /yr by 2050 flow rate (central case) would then require ~4 Gt CO2 storage capacity developed across >20 individual stores 

CCS could be economically competitive as emission abatement technology

  • Levelised transport and storage costs of £12-30/tCO2 could be attained
  • Adding onshore capture costs, CCS is cost-competitive against long-term carbon price forecasts
  • Combination with blue hydrogen can enhance economics and create scalable business models
  • Levers to reduce CCS costs include economies of scale (e.g. CCS clusters and hubs) and reuse of O&G infrastructure

The report included the following recommendations:

1. Ensure the timely ramp up of CCS

  • The Government has emphasised the importance of CCS to support its Clean Growth Strategy and net zero target, with an aim to deploy the technology at scale during the 2030’s 7
  • The Government has been providing funding towards CCS technology deployment and the establishment of net zero industrial clusters 
  • BEIS has been consulting industry and other regulators on critical enablers, including business models, market frameworks and O&G infrastructure reuse policy 
  • It is key that this good progress and industry engagement are maintained, to ensure CCS pilots and first commercial-scale projects are deployed in the 2020’s 
  • Accelerating initial CCS projects is critical to mature the technology for the subsequent ramp-up in the 2030’s 
  • In addition, this would allow to fully leverage the UK’s O&G industry expertise, supply chain and existing infrastructure

 

2. Enhance regulatory coordination on CCS and hydrogen

  • Regulators coordination to expedite industry projects
  • Align planning and consenting regimes to support crossindustry opportunities (e.g. O&G, CCS and blue H2 )

 

3. Improve data availability 

  • Improved access to data (including on subsurface, existing facilities and infrastructure developments) is critical for both government and industry to develop optimal CCS build-out plans 

Download the report


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