Oil, Gas and Wind: offshore harmony?

George Marsh

Part 4. The UK has extensive offshore expertise through its oil & gas heritage. But how the wind industry can take advantage of this remains the million dollar question…

This article was first published in Renewable Energy Focus magazine. Click here to subscribe.

See part 1 of the article here, part 2 of the article here and part 3 of the article here.

Some things remain separate

Of course, not all the expertise garnered by offshore O&G will be helpful to wind interests, not least because there are significant differences between the two sectors. For a start, much of the equipment used for O&G exploitation – jack-ups and heavy-lift vessels for instance – is not optimum for installing and running wind farms. Currently, offshore wind has little choice but to use this equipment, with some penalty in cost, but in time more suitable and cost-effective kit will become available.

A really fundamental difference, though, is that of installation scale and rate. In a typical O&G programme there is intense focus on one massive installation, after which everybody leaves. In contrast, a wind farm might involve several dozen identical installations, albeit smaller ones, so that site activity is more prolonged and continuous. This leads to very different ways of thinking about how to plan the work.

So declares Sir Ian Wood, Chairman of engineers John Wood Group, who adds that the health and safety concerns are substantially different because, with O&G, the emphasis has to be on the safe control of hydrocarbons. This is the more so because it is normal for O&G platforms to be manned, hence strict observance of HSE procedures is required of all personnel. On offshore wind turbines, the hydrocarbon risk is absent but instead there is a focus on safe access to the turbine and working at height.

Then again, although activities in both sectors involve heavy lift, the loads lifted differ greatly. While oil rigs can be built like buildings, by adding levels sequentially, erecting wind turbines involves lifting to the tops of high towers awkward damage-prone components like nacelles and wind rotors. This requires very special high-reach cranes, different from the more conventional heavy-lift cranes required for O&G platforms. Some types of lift will, nevertheless, be similar; for example placing transformer stations on foundations.

One problematic difference is economic. The O&G sector, with its roots in American technology and practice, has become used to ‘big bucks’, a situation that is justified by the high returns delivered by the end product. Consequently material and service costs are high, as are wage levels across the board. Commercial returns from wind farms are not, however, on the same ample scale, so cost levels and expenditures tend to be lower. Unless O&G enterprises take this into account in pitching for offshore wind business, wind interests might not be able to afford the services on offer. Even where this is not the case, the perception in the offshore wind camp that it might be is likely to inhibit contact.

Another difference is that, while standards and regulatory frameworks are well established in the O&G sector, offshore wind is still feeling its way in this respect. As Chris Towner, Energy Partner at commercial law specialist Bond Pearce, pointed out at last year's All-Energy, offshore wind is still a maturing technology and there are no standard turbine sizes, nor any standard offshore sub-stations, cable sizes or fall arrest systems. Nor is there consensus over which distribution system, AC or DC, should be used.

This all amounts to a big opportunity for O&G to lead the wind camp to appropriate solutions. Increasing standardisation within offshore wind is an essential part of driving down costs, and O&G expertise can hasten progress towards this goal. Towner suggested that standardised procurement processes, allocation of risk and forms of contract – O&G contracts adapted for offshore wind – would help give comfort to financiers. Joint industry working groups should, he said, be set up to make this happen.

Collaborating or competing?

Commonality of resources between two sectors brings, as well as collaboration for mutual benefit, the possibility of competition for those resources. As wind energy ramps up, there will be times when the same transfer vessels, jack-up rigs, survey equipment, heavy plant, port services and offshore skills will be wanted by both parties. There is a particular likelihood of this happening between now and 2025 because of decommissioning: Some 1.6 million tonnes of O&G facilities are due to be removed in this period, according to RenewableUK, requiring an estimated 8900 vessel-days of activity. Competition, further exacerbated by decommissioning, is likely to bring in its train price inflation, with wind more often the loser because of the economic power possessed by the O&G sector.

Furthermore, the two sectors might clash over sea bed rights. Extensive wind farm building in the North Sea could obstruct the on-going drive to find and develop remaining pockets of oil and gas. O&G interests point out that seismic research is made more complex by the presence of wind turbines, vertical drilling can be impeded and high turbines may obstruct helicopter approach routes to O&G platforms. Conversely, large exclusion zones imposed around O&G platforms could preclude use by wind developers of substantial areas of ocean. Space ashore might be an issue too, with parties competing for storage yards, factory areas and port facilities.

However, on balance and given appropriate management of the competitive aspect, offshore wind could benefit hugely from O&G's, four decades of hard-won experience and resources. Many experts agree that the two sectors have a vast amount in common, starting with the need to operate safely and economically in one of the world's harshest environments.

This article was first published in Renewable Energy Focus magazine. Click here to subscribe.

About George Marsh: Engineering roles in high-vacuum physics, electronics, flight testing and radar led George Marsh, via technology PR, to technology journalism. He is a regular contributor to Renewable Energy Focus.

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Policy, investment and markets  •  Wind power