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Supporting the energy transition

Westminster Energy Forum November 2019

Kristina Dahlström

Head of Policy and Strategy

Debate more polarised than ever – quality dialogue and evidence based action required

0

150

Oil demand Oil production

Oil demand (BEIS 2018

UEP Reference Scenario

Oil production (OGA

Mar 2019 projection

UK Oil demand and production UK Gas demand and production

19

70

19

70

20

35

20

35

150

0

Gas demand Gas production

Gas demand (BEIS 2018

UEP Reference Scenario

Gas production (OGA

Mar 2019 projection

MER UK

Energy

security

Strong

supply chain,

exporting

globally

Anchor

skills in UK

Diversification,

transition to

net zero 2050

Debate more polarised than ever – quality dialogue and evidence based action required

Energy transition | Case for change

Huge opportunity ahead

Energy transition | UKCS is a critical energy asset

Maximising

domestic

gas

production

Licensing of

carbon

storage

Offshore

flaring and

venting

Offshore energy

integration

study

Supporting

supply

chain

Enhanced

Oil

Recovery

Increasing

operating

efficiency:

emissions

benefits

OGA fully supports energy transition as set out in our policy position

Digital

platform

Energy transition | OGA current work

Working collaboratively with

government and industry

Licensing and permitting

authority for carbon storage –

OGA issued first licence Dec 18

Consider re-use as part of

the OGA Cessation of

Production process

Promoting role of CO2 EOR

2019 important year for CCUS with action plan underway

Recent steps in BEIS policy developmentOGA CCS role

large scale

(12 MtCO2 per

year) CCS

projects

in 2050

78GtCO2

6 to15 75-175MtCO2

CCC

estimate

of annual

require-

ment in

2050

total UKCS

CO2 storage

resource

estimate

Energy transition | Carbon Capture and Storage

• Funded by £1m grant from the Better Regulation Executive’s Regulators’

Pioneer Fund

• Led by the OGA, in collaboration with BEIS, The Crown Estate and Ofgem

• Aims to unlock UKCS energy integration opportunities

• Leverage oil and gas infrastructure for CCS, wind and hydrogen as an

essential enabler

• Oil and gas companies and supply chain partnering with renewables to play

a critical role

• Project has two phases:

1. Technical options (completed)

2. Economic and regulatory assessment (ongoing)

• In phase 2, team engaging across the energy industry to validate findings

and understand near-term opportunities

UKCS infrastructure (oil and gas,

renewables, and power transmission)

Energy transition | UKCS Energy Integration project

6

• UKCS is a critical energy resource, which can be transformed to support the net zero target

• Significant further wind power potential, untapped carbon

storage capacity, and extensive oil and gas infrastructure in

place

• Phase 1 reviewed five technology concepts which integrate

multiple energy sources on technical ground

• Opportunities for UKCS deployment are plentiful, diverse

and location-specific

• All technology concepts offer carbon reduction benefits but

differ in terms of scalability and timelines

− O&G technologies (platform electrification, gas-to-wire) mature, but there are cost challenges

− Transition concepts (CCS, hydrogen) proven as pilots, with very large technology upside

− Cross-sector synergies can reduce costs

• Larger hubs – on or offshore – can help capture full potential

from renewables

7

Concept Technical Feasibility UKCS Applicability

Proven

(e.g. Johann Sverdrup,

Norway)

EIS, CNS, WoS

opportunities via

windfarms, inter-

connectors or shore

Individual elements

proven (e.g. OCGT,

offshore power

transmission)

Niche solution

SNS, EIS opportunities via

windfarms or to shore

Piloted (e.g. Sleipner,

Norway)

Oil & gas repurposing to

be tested

Large storage capacity,

with O&G synergies in

SNS, EIS, CNS

Onshore – proven but

still upside

Offshore to be piloted,

Q13a (NL)

Onshore: cost advantage?

Offshore: O&G asset re-

purposing in SNS, EIS,

and NNS

Individual elements

proven, integration yet

to be tested

Shetland, Orkney,

SNS, and NNS asset

re-purposing

Technical Screening

Energy transition | Energy integration interim findings

Platform

Electrification

Gas-to-Wire

CCUS

Hydrogen

Energy Hubs

1Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020

Energy transition | UKCS Energy Integration project

Phase 1 Technical Assessment

Economic Assessment

Regulatory Assessment

• Modelling economic and commercial opportunities

• Comprehensive stakeholder engagement to provide inputs to

economic and regulatory workstreams, and validate Phase 1

findings

• Electrification

• Gas-to-Wire

• CCS

• Power-to-Gas (H2)

• Energy hubs

− Project mapping - real world

energy integration

opportunities

Industry Engagement

Phase 2

• Mapping regulatory landscape to

identify gaps, barriers, opportunities

and enablers

8

COMPLETION

SUMMER 2020

UKCS ‘size of

the prize’

Actions to

address priority

barriers and

enablers

Facilitate ‘quick

win’ projects to

accelerate cross-

sector synergies

Flotta & Sullom Voe terminals – H2 Offshore Project + renewable power

H21

HyNet

FLEXIS demo area

Tracking 61 projects (selection shown)

Electrification

Norway: Electrification,

Floating Wind, H2, CCS

Netherlands: H2, electrification, CCS

Caledonia

Clean EnergyProject Acorn

Clean Gas Project

SNS GTW and CCS

Zero Carbon Humber

OGTC NZSC and ONE ET Park

Energy transition | Growing number of potential developments

Thank you