Chinese offshore operator CNOOC Ltd is set to increase its renewable energy footprint as part of its energy transition strategy, with a focus on offshore wind projects.
The company has earmarked more than 5% of its annual budget for clean energy projects, equating to between 4.5 billion yuan ($692 million) and 5 billion yuan from this year's capital expenditure budget of between 90 billion yuan and 100 billion yuan.
The planned investment in new energy is higher than the 3% to 5% planned early last year.
Chief executive Xu Keqiang said the company will push forward with offshore wind projects "in a steady and cautious manner", adding that it will only raise investment in offshore wind projects if they show potential for returns.
The state-controlled player has, Xu added, won governmental approval to develop a wind project offshore Shantou city in southern China’s Guangdong province, the second of its kind for CNOOC Ltd.
The company is currently carrying out initial preparation for the 1 million kilowatt project.
Shantou will host a number of offshore wind projects by 2030 totaling 35.35 million kilowatts, including 33.50 in deep-water areas and 1.85 million kilowatts in shallow waters, which will account for more than 50% of total installed offshore wind power capacity in Guangdong, according to Guangdong Reform and Development Committee, the province’s economic decision making body.
CNOOC Ltd decided to return to the offshore wind sector early last year by incorporating a renewable energy outfit, CNOOC Renewable Energy, in Shanghai.
Last September, the company started operations at its first offshore wind power project in Jiangsu province.
The H2 project has total power generation capacity of 300 megawatts, with 50 4MW units and 17 6MW units. Out of the total, 47 units are installed in shallow waters and the remainder in deep water.
CNOOC Ltd first started its clean energy business in 2006 with CNOOC New Energy Investment, a business unit to oversee wind, solar and biomass projects.
The unit was shut down five years ago due to lacklustre demand. However, as demand grew, in late 2019 the company decided to revisit the sector as part of its corporate strategy.
The company started operating China’s first offshore wind farm in 2007, in Bohai Bay. With installed capacity of 1.5MW, the facilities are meant for power generation to support the offshore oil and gas production in the area.
The Bohai Bay wind farm is built on one of the jacket structures from CNOOC Ltd’s Suizhong 36-1 oilfield, about 70 kilometres off Tianjin, and the wind project supplies power to some of the oilfields under operation in Bohai.
CNOOC Ltd could tap its offshore engineering, procurement and construction expertise to develop offshore wind projects, according to its sister company, China's Offshore Oil Engineering Corporation (COOEC).
CNOOC Ltd can also make use of its abandoned offshore facilities such as jackets and re-modify their vessels for installing offshore wind farms, COOEC has said.