Posted by Selim Stahl April 26, 2012

FRACK OFF

Will shale gas move offshore?

Baker Hughes Hydraulic Fracturing Stimulation Vessel

 

 

 

 

 

 

 

 

This April, the U.S. Geological Survey released its estimation of about 5600 tcf undiscovered natural gas resources lying outside the US. In the same time the British Geological Survey was quoted for estimations of UK offshore reserves of shale gas that could exceed 1000 tcf. Indeed, shale gas formations do not know borders nor shores (see map). If the distribution of offshore/onshore shale gas is 50/50 there may be more than 6000 tcf of additional offshore shale gas resources worldwide. These numbers are subject to speculations but the debate has been launched: will shale gas move offshore like conventional Oil&Gas did in the past?

Escape from New York

There are indeed many advantages for shale gas for moving offshore:

  1. Offshore allow to escape from the “Not In My Back Yard issue”. As seen recently in the state of New York or France – which shale gas reserves by the way are estimated to be the second largest in Europe and with maybe the best shale gas geology in the world - if local opposition is strong, it may be impossible to even explore for shale gas. This is not a French exception or typical to shale gas and the same thing happened for gold in Switzerland.
  2. Gas leak, which has been identified as a major concern in the onshore shale gas value chain does not present the same risk level offshore.
  3. Seismic data acquisition offshore may be easier than some onshore areas with complex topography.
  4. Induced seismicity is not a showstopper offshore (see picture below)

Earthquakes of magnitude 3 or above in the Norwegian North Sea area in the last 30 years (Source: WolframAlpha)

 

 

 

 

 

 

 

 

 

 

 

Now when it comes to available technology for offshore shale gas Exploration & Production, we may have to wait some years before we can see the lean manufacturing oriented “gas fabric” shale gas machine working offshore. “Historically, it has taken at least 25 years for any new energy type to conquer 1% of the global market” says Peter Vosel Shell’s CEO so it could take years before we see a “drill, frac, produce” designed shale gas vessel operating. Moreover the problem of storing the gas and transporting it to the market may turn out to be tricky, though small scale LNG, small GTL and new natural gas conversion technologies (see video below) are emerging….or by the time offshore shale gas vessels are sailing there may be offshore gas pipelines already in the area.

Gas To Ethylene process

For a Few Dollars More

At the end, money may have the last word. The cost of production (COP) of shale gas offshore may be multiple times higher than what it is today onshore. Assuming an onshore shale gas COP of $2/MBTU and being 5 times more expensive to move offshore, this would lead to an offshore shale gas COP of $10/MBTU. This is in the range of some Arctic or Deepwater natural gas COP.

Will shale gas stay onshore when everybody is moving offshore (oil, gas, wind, etc) ? We should have the answer soon enough.

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Posted by Christopher Greiner November 10, 2011

Clustering and Interconnection of offshore wind could save Northern Europe €27 billion

This is the conclusion in the final report from the OffshoreGrid project, a scientifically based techno-economic study of an offshore grid in Northern Europe within the Intelligent Energy Europe program. The report states that more than 1/3 of all offshore wind power projects (321 in total) should be clustered in hubs, with only a single transmission line to shore (being in most cases a High Voltage Direct Current (HVDC) link). The clustering would lower investment costs from €83 billion to €69 billion up to 2030, compared to connecting each of the wind farms individually to shore. In addition, by interconnecting several hubs to form a multi-terminal HVDC grid, system benefits of €21 billion over a 25 year period could be generated for an additional investment of app €8 billion. In total this adds up to savings of €27 billion (see figure below).

Figure: OffshoreGrid project - infrastructure cost comparison

HVDC transmission for wind power could soon reach 1 GW

The clustering of wind parks into larger hubs is well underway in the German North Sea. ABB recently won an order worth around $1 billion from the Dutch-German transmission system operator TenneT to supply the Dolwin2 HVDC transmission link connecting offshore North Sea wind farms to the German mainland grid. The 900 MW HVDC converter and cable system, operated at ±320 kV, is to be installed by 2015. This project follows the 800 MW Dolwin1 link scheduled for 2013 and the 400 MW Borwin1 which was installed in 2009. Siemens is also installing multiple transmission links off the German coast, notably the 864 MW SylWin link scheduled for 2014, the 800 MW BorWin2 and the 576 MW HelWin1 links both scheduled for 2013. The offshore platforms SylWin alpha and DolWin alpha are both being certified by Det Norske Veritas (DNV).

Breaking the current in a HVDC grid is no longer a showstopper!

The lack of a HVDC circuit breaker is by many seen as the most pressing technical showstopper to a multi-terminal HVDC grid. However, in a paper published at a Cigré conference in September this year, ABB claims to have successfully tested a hybrid HVDC breaker concept that provides ultrafast breaking capability – within 2 milliseconds – and maximum breaking current up to 16 kA (16 000 Ampere). ABB states that such a breaker could soon be commercially available for HVDC grids rated at ±320 kV.

HVDC VSC reaches voltage level of 500 kV

All the HVDC links mentioned earlier are based on Voltage Source Converter (VSC) technology. The Skagerak 4 interconnector between Norway and Denmark – scheduled for 2014 – will break a new record for VSC voltage. At 500 kV, the link will provide 700 MW of transmission capacity in a single cable (a ±500 kV link would be able to support twice the power capacity, or 1400 MW). In fact, it is not the VSC converter that is limiting the maximum voltage, but rather the HVDC cables. The Skagerak 4 project will use Mass Impregnated (MI) cables, but in the future it is expected that polymeric extruded HVDC cables will take over also on the highest VSC voltage levels.

All in all, the outlook for an offshore grid is much more positive than it was just a year ago. Now coordination challenges are in the hands of EU – and national decisions makers – to sort out the many regulatory issues that stand in the way, such as the incompatibility of national support schemes for offshore wind power!

Figure: An outlook on offshore grids in Northern Europe in 2030. Source: OffshoreGrid project

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Posted by Selim Stahl October 6, 2011

Angry Bird – Green PIGS

Germany could pounce on green PIGS power for import …

Can the PIGS (Portugal, Greece, Italy and Spain) revive their economies through renewable energy projects? The Greek Prime Minister George Papandréou thinks so and predicts a shiny future for renewable energies. He is currently promoting investments from international companies into wind and solar power projects.

 

Greece has just announced a new €1.3 billion budget for the building of a PV solar plant capable of producing 450 MW. These billion-euro renewable projects occur more and more often with an “Oil & Gas” business model of exporting energy to the relevant markets.

This announcement was made only a few days after the Greek prime minister confirmed the intention of Germany to buy Greek sun power by importing electricity produced in Greece. The PIGS countries could indeed provide 1750 TWh/y of renewable electricity to Germany and Europe. This is 50 % of Europe electricity demand.

50 % of Europe electricity from green PIGS power

Germany is particularly interested into importing climate friendly electricity after its decision to progressively phase out nuclear power, which emits no or few climate gases. To import green electricity, Germany has already bet on eventually building an HVDC transmission grid to export solar power from the Sahara with the Desertec concept (see featured video on YouTube). However the Arab spring and the sovereign debt crisis could lead Germany to pounce on the PIGS’s green energy potential.

 

 

 

 

 

 

 

To answer to this challenge and revive its economy, Greece is already thinking about installing 20 000 hectares of solar power for a total budget of €20 billion. If this kind of initiative is pursued in the PIGS countries with all other renewable energy sources (wind, wave & tidal, biomass, geothermal, etc) it could economically provide 50 % of Europe electricity. This could generate 1.2 million jobs.

An Oil & Gas approach to Renewables

The PIGS countries could become central to the renewable energy strategy in Europe. Having an “Oil & Gas” business model of extracting renewable energy where it is cheap and abundant to export it to relevant markets where energy price is much higher may be counter-intuitive for the renewable power sector. However the Oil & Gas sector has a proven track record of managing multi-billion euros energy projects in countries where corruption, bureaucracy and sovereign debt are much more acute than in the PIGS countries.

PIGS Green Champions

One may wonder what will happen to the PIGS countries’ electricity mix and the development of local renewable technology champions? Well, when Standard Oil of California (now Chevron) went overseas to Saudi Arabia in the 1930s to secure and extract cheap oil, it did not imagine that half a century later it would have to compete with local Saudi Aramco, now the largest oil producer. Without having to go through the experience of nationalization of renewables, the PIGS countries could still follow an “Oil & Gas” scenario with the emergence of local renewable champions in the next decades. These local champions could then provide affordable renewable power to their economies and expand worldwide. Spain and Italy may already have theirs with companies like Iberdrola and Enel.

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Posted by Christopher Greiner June 10, 2011

The US could be leading the race in installing the first offshore HVDC transmission grid

Figure: Atlantic Wind Connection

The Atlantic Wind Connection (AWC) project off the US east coast could be the first ever offshore Multi-Terminal HVDC (MTDC) network. When completed, AWC could transmit 6,000-7,000 MW of offshore wind power to shore, enough to supply more than 2 million US homes. According to plans all permits are expected to be in place by 2013, the first of five construction phases would be completed as early as 2016 and the complete network could be in place by 2021. There seems to be consensus that a MTDC network in Europe will not materialize before after 2020.
The AWC project will include the following facilities:

  • Two independent HVDC circuits totalling more than 1,200 km of circuit length, mostly located between 16 and 29 km offshore. Each circuit contains two power cables operated at 320 kV DC voltage, and a fibre optic communication cable. The transmission backbone is split in two to avoid faults in one circuit affecting the other.

AWC is a cheaper and more flexible Solution

The Brattle Group calculates the project cost to approximately $5 billion and says it would be far cheaper than connecting each wind farm to shore with independent cables. The flexibility in routing wind power to different market areas and relieving onshore transmission congestion are both strong arguments in favour of the project; A 2009 US DOE Congestion study deemed the Mid-Atlantic region a “Critical Congestion Area”.

Partly funded by Google

The project is led by independent transmission company Trans-Elect with Atlantic Grid Development as the project developer. Financial backing is provided by Google (37.5%), Good Energies (37.5%) and Marubeni Corporation (15%). The US Mid-Atlantic Bight holds potential for up to 60,000 MW of offshore wind power in relatively shallow waters, and the U.S. government this year announced four zones for offshore wind energy development in the area. The 450 MW NRG Bluewater Wind project off the coast of Delaware and scheduled for 2016 could be the first to connect to the AWC transmission backbone.

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Posted by Selim Stahl May 4, 2011

No shale for Shell… In Sweden at least

Shell recently announced it is not going to renew its exploration licenses in Scania (Southern Sweden) after the analysis of the 3 wells drilled showed that no gas could be produced from the Alum shale there. In addition to the exploration analysis results, other factors are not helping the unconventional gas case in Sweden. I will highlight 3 of them:

  1. Natural gas demand: with 43 Bcf of natural gas imported, Sweden is a limited natural gas consumer (Europe imports about 9400 Bcf/y).
  2. The electricity mix: it is “relatively” cleaner than the rest of the world: about half of the power generated in Sweden is from hydropower, the other half being nuclear power.
  3. Sustainable power potential: it is huge. Whereas the power consumption in Sweden is about 135 TWh/y the economical renewable power potential is 170 TWh/y mostly from potential hydropower and biomass (see Table 2-2)

Therefore the need for unconventional gas development is somehow limited in a country with this type of energy mix.

 

In Germany and Poland (which technically recoverable reserves are estimated to be about 187 tcf) however, where supermajors are also drilling for unconventional gas (see video) , the situation is different:

  1. Natural gas demand: it is high. With 2008 Bcf of natural gas imported annually Germany is the third largest natural gas importer in the world. Poland with its 400 Bcf of natural gas imported annually is the 16th.
  2. Electricity mix: it is not clean. With 50% of power generated from coal and 27% from Nuclear power Germany has a large improvement potential. Poland, with 92% of power generated from coal is at the very beginning of a greener electricity mix strategy.
  3. Sustainable Power potential: it is important. In Germany, power consumption is about 547 TWh/y and the economical renewable power potential is about 433 TWh/y, mostly from potential wind power and biomass (see Table 2-2). In Poland, sustainable energy could power the country at 100%. Indeed, the power consumption in Poland is about 129 TWh/y and the economical renewable power potential is about 130 TWh/y, mostly from potential wind power and biomass.

 

 

 

 

 

 

 

 

This means that even if exploratory results for unconventional gas are conclusive, Germany and Poland will still have the opportunity to invest in renewable energy production or unconventional gas…or both. Any of these strategies would eventually improve their coal based electricity mix and create economic growth.

Investing in unconventional gas development is a risky process and each project, each country and each unconventional gas formation is different and should be assessed thoroughly with a holistic risk based approach to increase the chance of success.

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Posted by Eirik Ovrum April 29, 2011

Opportunity knocks

Norway has a golden opportunity to become world leaders in hybrid and battery technology on ships.

In Norway, plans are being made to introduce battery ferries on up to 100 routes, which would drastically cut NOx emissions. In the U.S. a hybrid tug has been made that uses a battery in conjunction with a Diesel engine to reduce all emissions dramatically: CO2  -27%, NOx -51%, particulate matter (PM) -73%.

Proposed Fjellstrand battery ferry

Hybrid and battery ships are coming. Due to an abundance of ferries and offshore supply vessels, Norway is in a very good position to take the global lead in developing this technology.

There are two main ways of using batteries for power:

1. Batteries provide all energy at normal conditions

Battery ferries where the battery will provide all power at normal conditions, will have no operating emissions as long as everything is working properly. In Norway, there will also be low emissions from charging the batteries, because of hydropower in the Nordic electricity mix, while in other countries the local electricity grid can be powered by gas or coal and in that case battery ferries will only help against local NOx, SOx and PM emissions. This is, if you ask anyone living near a harbor or one of the thousands dying each year from emissions from shipping, a big deal!

2. Hybrid systems with a diesel or gas engine providing the base load

The other way to use batteries are in a hybrid arrangement with a Diesel or gas engine that provides the base load, while the batteries takes care of peaks and troughs in power demand. This hybrid arrangement leads to less idling as the engine will almost always be running at an optimal load, which again reduces NOx and PM emissions.

Battery and engine in a hybrid arrangement can result in lower emissions because the engine can run at an optimal load
Battery and engine in a hybrid arrangement can result in lower emissions because the engine can run at an optimal load.

The hybrid tug, which is perhaps the most suitable ship type for a hybrid engine, emitted an amazing 27% less CO2, 51% less NOx and 73% less PM in the first version!

In summary hybrid and battery ships are coming. Due to an abundance of ferries and offshore supply vessels, Norway is in a very good position to take the global lead in developing this technology.

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Posted by per April 7, 2011

Technology Outlook 2020 goes on world tour

What are the key technologies that will be in play towards the end of this decade? That is what we try to answer in Technology Outlook 2020.

DNV’s Research and Innovation unit has a long tradition of publishing Technology Outlook, where we try to look into the crystal ball for selected industry sectors. Last time was in 2008, and then we looked towards 2015. Now the report is being presented at events all over the world: London two weeks ago, Rio on Monday, Houston today, and Dubai and Abu Dhabi end of May, and key hubs in Asia in June.

It has also generated some media attention already, including:
http://www.businessgreen.com/bg/news/2037391/report-decade-low-carbon-transition-moving-fast
http://www.environmental-finance.com/news/view/1625
and for those of you able to read Portuguese:
http://www.monitormercantil.com.br/mostranoticia.php?id=93201

Future technologies for shipping, energy and power systems
Technology Outlook 2020 looks at future technologies in four main areas: shipping, fossil energy, renewable and nuclear energy, and power systems.

In addition to reviewing over 100 technologies, Technology Outlook 2020 also summarises the most important global trends impacting on these technologies, and a visualisation of how a sustainable coastal community of the future might look.

The report is available on www.dnv.com/foresight, where it is also possible to order a free copy. If you order the report, you get to see a cool new feature called “augmented reality”. The application only requires a web camera and internet connection.

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Posted by Selim Stahl March 15, 2011

What is shale gas and what are the advantages and challenges of exploiting it?

Since some supermajors predict unconventional gas like shale gas is expected to meet more than 50 percent of gas demand by 2030, understanding the pros and cons related to shale gas exploitation will be crucial for decision makers and stakeholders. Here’s 3 simple questions and answers:

What is shale gas?

It’s mainly methane gas like the one we use for cooking or heating. However, this gas is tightly trapped in rock formations hundreds of meters down the earth.

There are plenty of shale gas formations in Europe, mostly in France, Poland and Denmark (see map below). The recent Montelimar exploration permit in southern France is covering Initial Gas In Place reserves of up to 85 TCF equivalent to about 650 billion dollars at today’s European gas prices. Snøhvit gas field offshore Norway holds about 4 TCF as a comparison. Shale formations existence and location in Europe were known for decades but only recently, following the increase of energy prices, has exploration started again. Moreover the technology and equipment to extract them are now commercially available and new well stimulation technology could improve gas production by 50%.

 

What are the advantages of exploiting shale gas?

When burned, methane emits less pollutants than coal or oil. CO2 emissions are lower than today’s global electricity mix based principally on coal. So exploiting shale gas seems to improve the energy status-quo and transition us towards a more environmentally friendly energy mix. Natural gas reserves are mostly in Iran, Qatar and Russia. Being less dependent on imports from this triumvirate could also be an argument for exploiting shale gas at its full potential.

What are the challenges related to shale gas production?

  • If the local energy mix is not dominated by coal or oil, the advantage of exploiting shale gas are less obvious. Hydropower, biomass, geothermal, wind, solar and sometimes nuclear are considered much cleaner.
  • A lot of water is needed for shale gas production: The 18 million liters of water needed to drill and fracture a typical deep shale gas well is equivalent to the amount of water consumed by New York City in approximately seven minutes . In addition, when the water is used to fracture the rock several hundred meters below the surface, it is blended with sand and chemicals. Therefore the monitoring of any potential leakages is crucial. After it is used, the water has to be treated and disposed off properly adding pollution issues to the surroundings
  • The emissions of gas during operations could add an additional environmental burden to the shale gas sector since the emissions of methane for the moment are not well monitored.
  • The operations to extract shale gas are very intensive and thousands of drillings and fracturing of the rock have to be performed. The regulations covering these operations are unfortunately not very clear (cf. video below) in some parts of the world new to unconventional gas. This could create unregulated and undesired disturbances, including induced seismicity, in the concerned neighborhoods.

Read more about the viewpoints from DNV’s Research and Innovation unit on this subject in the soon-to-be launched Technology Outlook 2020

 

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Posted by Christopher Greiner March 8, 2011

Going from radial to meshed direct current power transmission offshore

Picture source: Friends of the Supergrid

Picture source: Friends of the Supergrid

Reliability will be crucial in a multinational / multiregional grids, and a high voltage, direct current circuit breaker is the key enabling technology.

Within this decade, wind power plants in the GW-scale will be installed hundreds of km from shore where large areas with excellent wind conditions are available. The distance in question will require high voltage direct current (HVDC) transmission. Ultimately, grid connection to shore will be done using meshed Multi-Terminal DC (MTDC) grids. Building MTDC grids instead of radial connections to shore will lower investment costs, increase energy efficiency and lower environmental concerns due to less components being installed, less conversions between AC (alternating current) and DC and more flexibility in routing electricity to where it is most needed (i.e. market price is highest). To date, most DC schemes have been built as two-terminal (point-to-point) connections. Examples of these include the vast number of submarine cable connections, the longest being the NorNed cable (580 km) connecting Norway and the Netherlands. An offshore MTDC grid has on the other hand never been realized anywhere in the world.

All offshore wind power plants currently in operation have been installed fairly close to shore (up to a few tens of km), at distances where power transmission using radial AC is the preferred option, both technically and economically. However, exploiting the vast wind resources in the North Sea (Europe), or on the US east coast means moving much further out at sea. The Bard 1 offshore wind power plant in the German North Sea, scheduled for 2012, is the first project using HVDC transmission due to the long distance (125 km) to shore. In order to interconnect wind farms and oil&gas installations, Voltage Source Converter (VSC) technology is the preferred option. Reliability will be crucial in a multinational/multiregional MTDC grid, and a high voltage DC circuit breaker (no commercial version exists today) is the key enabling technology. Without it, MTDC will at best be limited to smaller networks on a national or regional level.

Read more about the viewpoints from DNV’s Research and Innovation unit on this subject in the soon-to-be launched Technology Outlook 2020

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Posted by Evangelos Boutistanis February 28, 2011

What should a 2020 Low Energy Ship look like?

The truth of the matter is that we cannot be sure! The 2020 ships might have radical, unconventional, hull shapes. However it is more likely that the low energy ships of the future will be larger, be made of lighter materials, carry little or no ballast water and be equipped with a host of different measures attempting to minimize fuel consumption and greenhouse gas emissions.

Drag reduction technologies, hybrid lightweight materials, multi-propulsor configurations and hull design features are expected to become integral parts of new, low energy, ship concepts. Here are two examples.

Air Bubble Systems

Illustration of an air-bubble lubrication system

The powered injection of air bubbles under the hull may reduce friction. However will such systems be efficient at off-design conditions?

Trapezoidal Hulls

“Triality” DNV’s ballast water free VLCC concept

Trapezoidal hulls, like Triality, can maintain sufficient stability and draft when sailing unloaded. What design options do naval architects have to ensure the structural strength of this vessel without hauling ballast water?

(Read more about the viewpoints from DNV’s Research and Innovation unit on these challenges in the soon-to-be launched Technology Outlook 2020)

The success of such concepts is uncertain because the rules of the game are changing continuously. Major ship design changes are triggered by the unprecedented market turmoil, our waning and costly oil resources, climate change and the societal pressure to do something about this now. Technologies that were considered too expensive just a few years ago are now becoming cost efficient. We are much better funded and equipped by science, technology and experience to venture ahead with an unprecedented amount of support by our society.

We might only have compasses, sextants and log books but the technological stars, maps and magnetic poles are shifting ever faster… Let’s start surprising each other by exchanging our ideas!!!

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