Oil and Gas Supply Chain Should Look for Offshore Wind Opportunities
Maggie McGinlay, Director of Energy and Clean Technologies at Scottish Enterprise, has written an article on using oil and gas sector knowledge in the offshore wind industry and companies from the oil and gas sector that can use vast opportunities in the offshore wind market.
There are plenty of opportunities in offshore wind for oil and gas supply chain companies, and it’s time to take up the challenge and invest, says Maggie McGinley, Director of Energy and Low Carbon Technologies at Scottish Enterprise.
Since the first discoveries of oil and gas reserves off our shores four decades ago, Scotland has built up an enviable global reputation in the sector, forged in the harsh conditions of the North Sea.
It’s said that there’s a Scottish accent in every major oil and gas market in the world – and with our supply chain companies exporting £10billion of goods and services across the globe last year – it’s clear that this reputation is continuing to grow.
So it’s no surprise that Scotland has set its sights on using this expertise to develop an equally world leading role in the fast-growing renewables sector, particularly in offshore wind.
The development of the sector is strongly supported by the Scottish Government, which has set one of the most challenging renewable energy generation targets in Europe –Scotland aims to deliver the equivalent of 100per cent of its electricity demand from renewables by 2020 – which we are already well on the way to achieving.
We also know there is significant potential for the industry to have a transformational impact on Scotland’s economy well beyond that – and Scotland’s public and private sector are working closely together to capitalise on the significant opportunities of renewable energy.
Our existing oil and gas expertise has a key role to play in this, using the skills and knowledge we’ve built up in marine operations to shorten project development timescales, reduce operational downtime and add significant value through application of their expertise.
In fact, many of the elements of developing an offshore wind project have already been developed by the oil and gas sector – in particular installation, risk management, personnel transfer and operational and maintenance activity.
There are of course some challenges that our oil and gas companies have to consider to take full advantage of this. These include the cost considerations of diverting resources, and the need to adapt to new working practices given different health and safety considerations, procurement and contracting processes, and regulatory requirements.
But for those willing to look beyond this and invest in the industry, the potential is considerable. According to the Guide to UK Offshore Wind Operations and Maintenance, opportunities in the UK offshore supply chain will be worth a potential £2billion a year between now and 2025 in operations and maintenance alone.
Transferring expertise from oil and gas to renewables
There are number of key areas where we know our oil and gas sector has the right knowledge and expertise to capitalise on these types of opportunities. A recent assessment of market value of the opportunity identified a number of areas of significant overlap between oil and gas and offshore wind and the potential to reduce the cost of energy (both in CAPEX and OPEX).
For example, we have expertise and experience in managing offshore construction from concept to production, with skills in turnkey contractors and specialist niche consultancies.
One of the highest value opportunities is the existing capability we have in the manufacture of ancillary components and deep sea structures. Expertise includes detailed design, fabrication and project management in these areas and many of the challenges associated with designing and fabricating offshore production facilities are shared with offshore wind substations.
In addition, our large offshore construction contractors have bases in Scotland and have major construction assets at their disposal. We have applicable expertise in areas such as structural grouting and scour protection around the base of support structures.
The oil and gas sector has leading capabilities to lay and bury both cables and umbilicals, which is an area perceived as one of the greatest areas of risk in the installation phase.
There is also significant transfer of expertise between both industries in the field of replacement equipment and personnel transfer, areas where Scotland has significant experience built up through oil and gas.
Likewise, our skilled technicians are already heavily involved in inspection and repair activity, and a number of providers offer accredited training in this field. Areas for cross over include offshore survival and specialist equipment training.
Our sophisticated port infrastructure has also been playing an important role in the development and upkeep of North Sea oil and gas assets for decades. This means we have a range of location offering deep water facilities, extensive quay side and adjoining lay down areas which have been identified as being potential bases for offshore wind.
One company which is really capitalising on these opportunities is structural grouting specialists FoundOcean, which has nearly 50 years experience grouting for oil and gas installers. The company diversified into offshore wind when it was contracted to undertake work on the Ormonde Offshore Wind Farm in 2010 where they grouted 124 jackets, demonstrating the flexible, scalable nature of the its operations. Success in this project has led to FoundOcean being awarded many more contracts across Europe, including Bokrum West and Nordsee Ost – two major offshore wind farms being developed off the German coast.
Another example of success is ROVOP, a specialist provider of subsea remotely operated (ROV) services for both the oil and gas and offshore wind industries. The company now has a leading position in the market for subsea construction, intervention, repair, and maintenance throughout Europe – and has worked on half of all offshore wind farms built in the last three years.
It’s clear that the opportunities for companies willing to diversify and look to offshore wind both in Scotland and further afield, are huge. However, it’s not just about what individual companies can achieve. Research has shown that based on the most significant areas of cross over, the oil and gas supply chain has the potential to reduce the cost of offshore wind operation by around 20% – which is significant considering that cost reduction is one of the key barriers to growth in offshore wind.
Getting more oil and gas supply chain companies to look beyond oil and gas to the opportunities of offshore wind is going to be vital, as we work towards building a world class renewables industry in Scotland.