The first-ever carbon capture and storage (CCS) licensing round in the UK is just a week away, proposed by the regulator to “kick-start the next phase of this great industry”.
That was the proclamation of North Sea Transition Authority (NSTA) boss Andy Samuel at the Offshore Energies UK conference in May.
A total of 41 nominations came in following a call from the regulator, which closed on May 13, showing a “genuine sign of investor appetite” and great news for the supply chain, it said. he declares.
On the UK itself, he said: “I don’t mean unique, I don’t mean world leader, but we are definitely up there. We have great strengths. »
June 14 is the date for the licensing round which is fast approaching and Samuel himself told the conference that the NSTA did not yet know which areas would be on offer as they are working in conjunction with Crown Estate and Crown Estate Scotland.
That’s part of the reason COO Scott Robertson and his team are so busy.
“It’s a huge strategic priority. As the licensing authority, we have a key role to play in helping the government achieve its net zero ambitions and CCUS has an important role to play in this regard.
With 54 people in the leadership, a quarter of them are involved in the CCUS in one form or another, he reports.
“It keeps a lot of my full-time people busy. It’s not a small business anymore, it’s a big job.
The need to put acreage in the hands of investors is clear; According to the Global CCUS Institute, some 2,000 large-scale sites are needed worldwide to meet the Paris climate goals, and the world is currently less than 10% away from that.
That’s why we’re “moving at the pace of an offer on the CCUS license acreage,” Robertson said.
As the nominations window recently closed with considerable interest, the new licensing round is “moving away from ad hoc and moving to scale”.
“The other benefit of the round is that you get these good assets, good hands. You get the most qualified, most competent, most financially strong offers.
“We are certainly doing what we can to put the UK in a place where they can compete.
“All we can do is provide the conditions for the UK industry to be competitive and I think we are absolutely achieving that by getting more licenses.”
The new licensing round will arrive nearly five months to the day since a whopping 25GW of projects were awarded to ScotWind.
Unlike wind farms, CCUS installations do not take up much floor space, but they do require space for monitoring and metering throughout the life of the store.
Between surface area for the waves of new turbines to be installed, space for CCS and oil and gas, the North Sea is therefore becoming very busy.
Signs have been shown, such as the conflict between Orsted’s Hornsea 4 wind farm and BP’s east coast CCUS cluster, over projects to compete for space.
Robertson said: “We are talking almost daily with Crown Estate and Crown Estate Scotland to make sure that we are using the North Sea, which is becoming a crowded place, and that we are doing this spatial planning.
“For each of these apps, we talk to them to make sure we’re not talking at odds about the same area.”
It’s a relatively new thing for regulators to have to integrate in this way, although Robertson reports the NSTA has been in close talks with counterparties like Crown Estate Scotland for about a year.
Regulators are going to have to get even more comfortable with new oil and gas projects, with Britain’s energy security strategy
Westminster said it would establish “Gas and Oil New Project Regulatory Accelerators (GONPRAs)” to provide “dedicated and named project support” and bring about “rapid development” of these schemes.
On that front, Robertson said, “We are already active. We are working with OPRED to review the FDP (Field Development Plan) EIA (Environmental Impact Assessment) process to see where we can remove regulatory stickiness and be more efficient between the two of us.
“It’s always something the NSTA has done, we talk to operators very early on about their concepts because it’s more efficient for us to get involved at the concept stage than just waiting for an FDP.
“What we have done now is we involve OPRED during the concept selection and there are meetings going on with NSTA, OPRED and the operators in relation to some early concept projects.
“I would say these things are a good summary of what we are already doing under the GONPRA banner to eliminate inefficiencies and improve communication.”
Until last week, there had been regulatory “rigidity” over Shell’s Jackdaw gas project, back and forth over the months with OPRED over its proposals.
Shell wants to tie Jackdaw to Shearwater, rather than Harbor Energy’s Judy facility, arguing for electrification in Shearwater as well as its link to the Acorn CCS project in St Fergus as key justifications.
The field was finally approved on Wednesday.
But how can CCS more broadly help new oil and gas projects overcome regulatory hurdles?
“There may be a connection in some cases, but that doesn’t always mean there is a connection.
“Obviously, CCS is there to serve a much wider set of customers than just an oil and gas field, they are primarily aimed at decarbonizing industrial clusters.
“I guess the link is, looking at the Bacton Energy Hub, it’s pretty much if you have a blue hydrogen element in your concept, then you need a gas supply to be able to generate your blue hydrogen .
“Obviously it’s part of the Acorn concept, it’s part of the Bacton concept, so there’s a connection, but you have other programs where gas isn’t part of the concept, it’s more about decarbonize industrial green hydrogen.”
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