The world’s first auction focused on the development of floating wind power projects that would be purpose-built to decarbonise operational offshore oil and gas fields has been unveiled by the Scottish arm of UK seabed landlord the Crown Estate.
The “two pot” Innovation and Targeted Oil & Gas (INTOG) leasing round is open to developers aiming to build “small-scale” sub-100 megawatt deep-water wind arrays linked to North Sea hydrocarbon production platforms, as well as for projects that will provide green power to existing oil and gas infrastructure to cut emissions.
Awards for the round, to be announced next March, are expected to play a crucial part in the wider development of offshore wind in Europe’s northern seas by drawing in oil and gas developers and supply chain companies with “little or no renewable energy experience, using INTOG as an opportunity to establish themselves in the renewables market”, a recent Crown Estate Scotland study said.
Crown Estate Scotland director of marine Colin Palmer said: “INTOG represents an exciting opportunity to help decarbonise oil and gas installations and enable innovative projects which are important in lowering costs for the commercial deployment of offshore wind, reducing risk, and developing Scotland as a destination for innovation and technical expertise.
“Platform electrification, which INTOG will help deliver, will reduce North Sea oil and gas emissions while also supporting new skills and jobs.
“Taken as a whole, INTOG will play a significant role in helping us reach net zero and meeting our energy requirements of the future.”
Scottish Cabinet Secretary for Net Zero, Energy & Transport Michael Matheson said: “We need bold action to tackle the climate emergency. Renewable energy, including offshore wind, will deliver good, green jobs, benefits for communities and strengthened energy security as we transition to becoming a net-zero nation.
“Oil and gas continue to play an important role in our economy and it is therefore vital that the energy industry decarbonises as rapidly as possible.
“The INTOG leasing round presents significant opportunities to cut emissions across these operations while, crucially, enabling the offshore wind sector to expand, innovate, and drive forward Scotland’s ambition to be a renewables powerhouse.”
Developers will need to submit a supply chain development statement as part of their applications for the INTOG round before they can sign an “option agreement” for a project site, to be awarded, according to the Crown Estate Scotland, based on “a mixture of price bid and quality”.
Crown Estate Scotland noted that final leasing documents have been “optimised to support early project development and reflect many of the comments and suggestions from potential applicants, who were asked for feedback earlier this year”, including extending option periods from five to seven years and doubling lease tenancies for electrification projects from 25 to 50 years.
The INTOG leasing round, distinct from Scotland’s ScotWind auction, which awarded a potential 25GW of development seabed earlier this year, closes on 18 November.
The UK could see a first floating wind-powered oil and gas field operating in its waters as early as 2025, following the signing of a potentially historic deal between Malaysia’s Ping Petroleum and UK green energy infrastructure developer Cerulean Wind, which is bidding on four sites in INTOG.
The leasing round is designed to help meet the emissions reduction targets agreed last year between the UK government and industry in the so-called North Sea Transition Deal, which is boosting investment in deep-water offshore wind technology.
Employing offshore wind arrays to decarbonise oil and gas operations is gaining traction with operators around the world, with the first commercial project, Equinor’s 88 MW Hywind Tampen, soon to be online in Norway and several others taking shape, including the recently announced gigascale Trollvind megaproject.
Though first strides in this space are being made in the North Sea, the concept is also garnering interest in other key international oil and gas markets, including the Caspian Sea and in the Canadian Atlantic.
Azerbaijan signed a memorandum of understanding with the International Finance Corporation in April to kick-start a local offshore wind sector, while state oil company Socar has signed a deal with contractor Technip Energies to install a floating wind turbine to reduce emissions at an offshore platform.
Canada’s government, meanwhile, is backing commercialisation of a “plug-and-play” floating wind-powered drilling concept developed by sector pioneer Saitec and consultancy Waterford Energy Services, which could be used to cut greenhouse gas emissions from oil and gas operations in the Grand Banks area “and abroad”.
(This article first appeared in Upstream’s renewable-energy sister publication, Recharge, on 10 August.)
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