ONE TO ONE with Dan Jackson | Will a giant triangular North Sea wind grid spark the UK’s ‘paralyzed’ energy transition to life?

June 16, 2023
10 min read
Featured Image

Before the end of the decade, oil & gas platforms off Scotland could be plugging in to a floating wind-charged 'ring-main' to cut emissions from gas-fired offshore operations. Beaufort speaks with developer Cerulean’s CEO, Dan Jackson, about how the pioneering $25bn project could transform thinking in the evolving energy basin

By Darius Snieckus

When former North Sea oilmen Dan Jackson and Mark Dixon in 2021 unveiled a multi-billion-dollar plan to decarbonize "the majority" of the UK's operating offshore oil & gas fields using a vast fleet of floating wind turbines, it raised eyebrows – and even a few wry smiles – in energy industry circles. Yet the pair, who set up Cerulean Winds aiming to help rescue a sector struggling with the transition from petro-province to renewables, appear to be quickly proving the doubters wrong.

Not only has the innovative project been expanded into a $25bn gigascale ‘ring main’ that in its first phase would already cut total emissions on the UK continental shelf (UKCS) by more than a quarter, but the developer’s “big, bold bid” in Scotland’s pioneering INTOG auction – the world’s first focused on electrification of offshore oil & gas using sea-based wind turbines – took home the lion’s share of the acreage awarded, clearing the way for the full-scope 3GW megaproject.

The notion of using wind power to decarbonize offshore oil fields is far from new – the flagship industrial-scale floating turbine design, Hywind 1, switched-on off Norway in 2009, was in fact originally dreamt-up at Statoil (now Equinor) for this purpose – though it was never put into service in this use.

The renewables industry consensus at the time that it would be a ‘dirtification’ of clean energy technology, among other issues, however, left the concept commercially stranded until the 95MW Hywind Tampen floating wind array – also Equinor’s – started flowing power to the Snorre-Gullfaks oil field in the Norwegian North Sea last year. Now, in the wake of this vanguard project, a range of similar schemes off northern Europe, Asia Pacific, the US Gulf and Atlantic Canada are taking shape, Cerulean’s – dubbed the North Sea Renewables Grid (NSGR) – being by far the largest at 3GW.

Jackson believes changes in global macro-economics precipitated by the Covid pandemic and Russia’s invasion of Ukraine in the last three years and climate action-fuelled acceleration of the energy transition are together transforming attitudes toward the idea.

“The oil & gas sector has, for macro reasons, been given a significant lease of life… to the end of the 2030s at least, and energy security is front-and-center for most governments, not least the UK’s,” he says. “And there is growing enthusiasm in oil & gas companies in terms of social license and responsibility. But probably the biggest thing is that regulators are getting more serious about cleaning up the oil & gas industry’s operations.”

Hard transition deal targets

In the UK, he underscores, the sector is “wrestling with the challenges of meeting the North Sea Transition Deal emissions reduction targets” [of lowering produced CO2 by 50% by 2030] while reliably feeding the national grid. “Achieving meaningful reductions at the pace required, [requires] a reliable basin-wide approach [where oil fields] can plug into affordable power when they need it”, states Jackson.

The NSRG, being developed by Cerulean with partner Frontier Power and a ‘delivery consortium’ made up of heavy-hitters NOV, Siemens Gamesa, Siemens Energy, DEME and Worley, will ultimately involve a giant triangle of underwater power trunklines linking three 333km2 sites, called Aspen, Beech and Cedar, each featuring 1GW armadas of floating turbines.

EASY AS 'ABC': the Aspen, Beech and Cedar floating wind plants will power a triangular 'ring main' that will decarbonize offshore oil production in the vicinity while exporting to UK, Scottish and German grids. Image: Cerulean Wind

“We had over 100 interviews and sessions with oil & gas companies in 2022… to really try to boil down what the drivers are for [their operations]. Operators want to be able to plug in for as long as they need to and they want to be able to take power for what they need. They really don't want to have dependency.”

Fundamental to the rapid progress on the megaproject, which in its first stage is expected to abate up to 4m tonnes a year of the emissions from UK North Sea oil & gas operations – which in 2021 stood at 11.3m tonnes for offshore power generation alone, Jackson says, has been its reframing as an “infrastructure rather than power production” development.

“Others in the past have tried to launch various types of joint venture schemes where they're ultimately dependent on the financial support of the oil & gas companies. “[NSRG] always had to be an independent piece of infrastructure that provided power at a competitive price and was flexible to the oil & gas company's needs”, says Jackson.

“That was the premise from the start: three deepwater generation sites connected together as a ‘ring main’ in the central North Sea that could provide power on demand… far more cost competitively than any other source – power-from-shore, for instance, or a ‘cluster’ approach, which so far have been the two real alternative schemes,” he adds.

North Sea 3.0’s first ‘ring-main’

The economics, Jackson feels, are rooted in “redundancy and scale”. “Many of the schemes discussed in the past where you have one wind farm, maybe relatively small, with three-to-six [oil & gas platforms] platforms,” he says. “That custom approach is limited because you don't have the scale and so you don't have the redundancy that translates into reliability.”

“Floating wind has tremendous value in terms of economies of scale, bringing down the levelized cost of energy [LCOE] to a market-competitive price, it needs not only to be lower than the cost of power generation on the platforms themselves, but it also needs to be converging towards the cost of fixed offshore wind’s LCOE, and you get that multi-gigawatt floating wind.

“That convergence is no longer a 2030s thing, it will be the late 2020s thing.”

“By having the prime contractors locked-in from the earliest stages we've been able to meet the supply chain, the yards, with ‘real’ designs"

Matching the sense of scale that is scaffolding the NSRG project, Cerulean has brought together a kind of offshore wind super-group to build it: Siemens Gamesa supplying turbines, its parent Siemens Energy the electrical systems, DEME tapped for installation work, Worley as lead engineering contractor, and marine industry giant NOV to deliver 200-plus floating foundations.

The partnership with transmission developer Frontier, Jackson adds, tied the project together by “putting generation and transmission together to provide the market with a sort of joint offering”.

“By having the prime contractors locked-in from the earliest stages we've been able to meet the supply chain, the yards, with ‘real’ designs – we know what we want, we know when we want it.

“We have gone about it the exact opposite way [to traditional fixed offshore wind project development models]. Rather than the developer going around saying ‘we’ll know about ‘x’ when we get to that stage after consenting, after the CfD [contract for difference] is awarded, after we've done the tendering’, we have our prime contractors in place ready to meet with suppliers, we organise the funding and financial constructs, and then we bid for the lease.”

“This approach will have huge benefit in developing the UK and Scottish supply chains and its great for the oil companies [because] they have greater certainty on our cost, schedule and, in fact, all aspects of delivery. And tit is not me sitting there saying how I'm going to build several 100-200 of these units, it will be our partner who’s business it is."

The big switch-over

The 900MW first stage of the megaproject is focusing on the “brownfield modifications” needed to switch power systems on operating oil & gas platforms in close vicinity to the NSRG from gas- to wind-generated electricity. This will be followed by two major construction phases, connecting first to the high voltage alternating current (HVAC) grid in north-eastern Scotland, and then to the national electricity network in southern UK as well to the HV direct current (HVDC) grid in western Europe.

The site selection work for the three floating wind production hubs, Jackson notes, has had to be carried “balancing environment cohabitation – shipping lanes, and fishing zones and the birds that migrate through the North Sea” – with speed-to-market economics, leading to the decision to locate one corner of the triangular ring main 100 km off Peterhead, where there is a ready landing point on the AC grid.

“Having an AC system connected to the beach is very cost effective and it's far quicker to have installed then the second phase lines to southern England and Europe requiring HVDC systems.

“The lead time for HVDC systems is significantly longer than AC – using HVDC would have pushed [NSRG] into the 2030s. It’s very important we meet target dates set by the UK government: we want electrons flowing in 2027 and [the project] fully powered up by 2029.

“To complete the first phase of the project in this decade was only going to be possible if we concentrated on an AC system.”

Green hydrogen-derived e-fuels and carbon capture, utilization and storage (CCUS), both of which are emerging as key planks in many North Sea governments’ net zero strategies, are among the new energy-hungry users that are foreseen raising industrial power demand in the North Sea and so “definitely key future applications for a ring main [charged up with offshore wind]”, he notes, flagging the landmark award last month in the UK of 20 carbon storage licenses at sites in its waters.

“Every operator that we're engaged with is undertaking studies to understand whether they can have full, partial or no electrification: it may be 20%, it may be 60%

“Tapping into a ring main for as much power as you need, on demand – suddenly you are in a situation very similar to that onshore, where if you are building a factory, say, you pay for eight years of power but don’t have to financially contribute to the power supply infrastructure, of course.”

Rising offshore power demand

The long dormant market for offshore wind-powered decarbonization of oil & gas production is suddenly hoving into view – and floating projects look set to play a leading role in the narrative not only in clean power production but also via economic development and jobs creation, with NSRG forecast to channel some £12bn GVA to the UK’s economy during its construction.

“Every operator that we're engaged with is undertaking studies to understand whether they can have full, partial or no electrification. It may be 20%, it may be 60%, but you have to be realistic,” says Jackson. “The goal of the 100%-electrified platform is there but it is only going to be for the operators with North Sea tenancies into the 2040s – West of Shetland [where some of the most recently developed offshore oil & gas fields are] for example.”

Add the part floating wind could play in development of projects launched out of the UK’s highly contentious 250-block exploration and production round, and the 5GW in INTOG awards – Floating Energy and Eni-backed Vagronn won the other 2GW – could indeed create the conditions for “an existential transformation” of the decarbonization concept.

"There continues to be a lot of miscommunication about the cost of floating wind. Its LCOE is going to come down very quickly as it scales up

“There continues to be a lot of miscommunication about the cost of floating wind. Its LCOE is going to come down very quickly as it scales up. And you can only really determine that if you've got the right people in your tent. There are many vantage points here, but in the end it is all about certainty. And floating wind power is increasingly going to provide that [certainty of supply], in part through a new role in greener offshore oil operations. It’s going to be a bow-wave of work for those companies involved in the North Sea basin energy transition.

“The solution, we feel, to decarbonizing offshore oil production and maintaining energy security in the UK is providing green power from a ring-main that creates backup on backup on backup.

“An [oil] operator will always have a second gas-powered turbine on a topside because they need 100% redundancy. With three connected [floating wind] generation sites we can provide the sort of reliability they require.

“In 10-15 years, we will see a very different definition of what an integrated energy company is: oil and gas yes, but there will also be CCUS, which I believe is finally going to accelerate [and become commercial], and the wider hydrogen economy will be at an exciting stage, where green energy-powered e-fuels are replacing hydrocarbons.

“And in this scenario, offshore oil operators will just be one of the heavy users of a big clean-energy powered industrial park in the North Sea.”

Every week in Beaufort, Aegir Insights' intelligence newsletter, we talk to industry leaders about hot-button topics and developments in the offshore energy transition.

Delivered straight to your inbox every Sunday, Beaufort will sharpen your market insight for the week ahead with exclusive commentary, analysis, and in-depth journalism delving into the talking points and technologies shaping offshore wind.

Sign up for free here.

Tagged: Beaufort · UK

Aegir Insights provides industry-leading intelligence powered by data science for offshore wind energy developers, governments and financial institutions.

Aegir Insights ApS

Aegir Insights
Havnegade 27 st,
1058 Copenhagen,

CVR no.: 39104792


Aegir Insights

Aegir Insights
Havnegade 27,
1058 Copenhagen,

CVR no.: 39104792

All rights reserved 2023 © Aegir Insights Aps