6. Multi use opportunities
- We examined two potential non-decommissioning markets where an UDW port could attract additional revenues:
- Firstly, supporting future capital and operational expenditure within the O&G sector.
- Secondly, the renewable energy sector, specifically floating offshore wind as Scotland looks to expand from its position as a leading destination of fixed bottom wind farms.
- Discussions with O&G sector organisations highlighted that an UDW port could support the maintenance and capex of 6th and 7th generation semi-submersible drilling rigs. No other specific activities or projects that would require an UDW port.
- Floating offshore wind and other renewable energy industries do not necessitate the development of a distinct UDW facility in the UK as their needs are accommodated by existing ports.
The purpose of this section is to identify non-decommissioning projects that an UDW port could support. The review is based on desktop research and discussions with relevant organisations though the market consultation exercise. Our focus was on understanding the opportunities available within the O&G and offshore renewable energy sectors.
6.2 O&G sector opportunities
Using the Wood Mackenzie upstream data tool we extracted their estimate of the future operational and capital expenditure anticipated (excluding abandonment) until 2054.
Table 10: Wood Mackenzie forecast of capital and operational expenditure to 2054 (nominal)
Source: Wood Mackenzie
The Wood Mackenzie data illustrates that 93% and 56% of capital and operational expenditure respectively is forecast in the first 7 years to 2025. Therefore, should a UK UDW port be targeting any specific capital and operational expenditure it would need to be developed in a timely manner to ensure it is able to meet the needs of operators when required. The forecast is examined on a locational basis across five North Sea basins in the table over page.
Table 11: Wood Mackenzie forecast split by geographical sector (nominal)
|Central North Sea||48,361||12,905||61,266||38%|
|West of Shetland||29,405||21,149||50,554||31%|
|Northern North Sea||30,718||9,654||40,372||25%|
|Southern Gas Basin||6,529||2,055||8,584||5%|
Source: Wood Mackenzie
This shows that the highest levels of expenditure are forecast to incur within the CNS ($61.2bn), West of Shetland ($50.5bn) and the NNS ($40.3bn).
This level of expenditure could provide further opportunities for an UDW port, and we tested this prospect in the market consultation exercise.
6.2.1 Market feedback
During the market consultation exercise we sought the view of industry operators, particularly those looking to invest in new fields, on whether an UDW port would support any specific activities.
During the discussions with various industry stakeholders one interviewee highlighted that an UDW port would allow 6th and 7th generation semi-submersible drilling rigs to come to shore without the need to withdraw the thrusters.
No other specific projects or areas of expenditure were noted by the market. The collective view was that the existing ports and their respective capabilities would be able to provide the facilities required for currently anticipated expenditure.
6.3 Renewable energy, floating wind opportunities
Floating offshore wind is an emerging low carbon energy technology which has the potential to exploit stronger winds in deep water locations. This has been identified as one of the leading options to support the UK Government's ambition of decarbonising the energy system.
The UK is well positioned to become a world leader in floating wind as it already is one of the leading destinations for fixed bottom wind farm development. Further, the UK also benefits from a skilled supply chain that has the relevant experience and capabilities gained from operating in the shipbuilding and O&G sectors.
Scotland, in particular, is considered well suited for floating offshore wind due to its high wind speeds, abundant near-shore deep water sites and access to a skilled supply chain.
The floating offshore wind turbines in the Hywind Project were assembled in Norway as there was a need to use the S7000 vessel to connect the turbine generators to the floating support structures. As the S7000 vessel was used there was a need for a port with UDW and hence, Stord in Norway was used.
The remainder of this section reviews industry reports and feedback relating to the port requirements of the offshore renewable sector. Further detail on the floating wind market is provided in Appendix F.
6.3.1 Port requirements
Compared to fixed structures, floating wind can shift a number of operations port-side instead of performing those offshore. This could lead to a number of benefits such as reduced construction risk and weather related downtime and lower infrastructure costs. However, in order for ports to be able to accommodate floating wind platforms they will have to possess the relevant infrastructure. Based on our research of publicly available information we have identified the following as key requirements for ports to be able to accommodate floating wind platforms:
- Port Location - Close proximity to port is very important as long distance from site may lead to complex, lengthy and costly wet tow operations. Research by the Carbon Trust identified that the benefits of port proximity could be maximized for sites which are less than 80-100km from port.
- Port Draft - Ports will need to ensure they have enough draft to support floating wind platforms. In order to be able to accommodate all three of the most popular wind platform designs a draft of at least 11m will be required.
- Port Entrance - Floating wind platforms may often be very wide structures with beams of up to 100m. Consequently, the port entrance will have to be able to accommodate such width.
- Dry Docks - Dry docks are valuable assets as they allow the structures to be assembled and launched by flooding the dock instead of using expensive heavy lift cranes. However, as mentioned above due to the width of some platforms the docks should preferably be at least 100m.
- Construction Yard - Ports would benefit from having large yard facilities available close by, that are able to accommodate serial fabrication. This will reduce the time required to move the structure from factory to site. Research by the Carbon Trust identified that manufacturers forecast an average yard size requirement of 100,000m², but individual manufacturers noted yard sizes of up to 400,000m² or as small as 5,000-10,000m.
- Cranes - Onshore cranes will be required for load out and the rotor nacelle assembly. However, the requirement for heavy lift cranes would be limited if a dry dock is available. If a port does not have a dry dock it would have to import a heavy lift crane. These, however, are in very short supply and would therefore require investment.
Within the UK and Scotland in particular there are a number of facilities that could be used for the fabrication and/or installation of floating wind platforms. The National Renewable Infrastructure Plan published by the HIE and SE identified 11 locations in Scotland that offered the potential for attracting and facilitating floating wind projects.
A separate report by the Carbon Trust, analysed the ability of Scottish port facilities to accommodate all three dominant platform types. The analysis identified that two facilities, Nigg Energy Park and the Port of Peterhead, were already suitable to accommodate all three technologies. In addition, the report also found that conditional upon some minor to moderate infrastructure upgrades a further twelve facilities had the potential to accommodate all three platform types.
There are a number of requirements that a UK port will have to meet to accommodate floating wind projects, such as sufficient depth of draft and width of port entrance. Currently, Scotland has two ports which can accommodate floating wind projects using any of the three dominant platform types. A further twelve being suitable after undergoing minor or moderate infrastructure upgrades.
As such, there does not appear to be a specific demand for an UDW port to support the floating offshore wind industry.
6.3.2 Market feedback
As part of the market consultation we discussed opportunities for floating wind development with companies in the renewable energy sector. This supported the assessment that an UDW port capability was not viewed as a requirement for development of this market. We also enquired if an UDW port could support other renewable energy activities such as wave or tidal energy development.
Operators in this sector highlighted that this industry is in its infancy and it is making significant efforts to prove the commercial feasibility of projects. A primary focus in doing this is to reduce project development costs. Market participants highlighted that they considered UHLVs as expensive and therefore their utilisation would not support cost reduction efforts. As such, operators in these sectors did not view a requirement for an UDW port.
Email: Claire Stanley