Orsted believe Scottish net zero targets are propelling a revolution

As part of the UK’s highly ambitious project to see 40GW of offshore wind generation installed by 2030, the Scottish government is committed to seeing at least 11GW of that 40GW installed off the Scottish coast. 

Benj Sykes, Vice President in the UK offshore wind business for the green energy giant, Ørsted, says that Ørsted firmly believes that the goals of both the UK and Scottish governments are achievable. However, he warns, it will need a tremendous, concerted effort on the part of the energy sector to get this done. 

“The industry can deliver on this. However, government and all the stakeholders will need to work closely together to make this happen,” he says.

Today, the UK has just over 10GW of offshore wind capacity installed. This is, of course, a huge step up from the position in 2002, when the first two offshore wind turbines were installed at Blyth in Northumberland.

The last three to four years, in particular, have seen offshore wind installations ramp up significantly. This has been in no small part, Sykes says, because both governments have provided very clear and reliable guidance on their policies towards offshore wind deployment, and the transition to clean power. 

The other major part of the picture has been provided by the huge technology advances the industry has made, which has been instrumental in dramatically driving down the cost of offshore wind. 

“This precipitous price drop, which makes offshore wind highly competitive with other sources of electricity generation, low carbon or otherwise, tells its own story,” he comments. 

“The first competitive Contracts for Difference (CfD) auction was held in 2015. The price of offshore electricity at that point was between £115 and £118 per megawatt-hour. In the second CfD auction, just two years later, we won with our Hornsea 2 project at a price point of £57,50. Last year, in the third CfD round, the winning price was around £40,” he notes.

With wholesale prices per megawatt-hour over £50, Sykes points out that Ørsted’s Hornsea 2 offshore wind farm, which is already in construction, will come in close to parity with the current market price of electricity. 

So how quickly can the industry build out the required offshore wind capacity? The rate of installation of offshore wind turbines has varied somewhat from year to year, but over the last four years, between 1.5GW and 2GW of generation capacity has typically been added each year. 

“There is no doubt that the industry needs to step up this rate of growth to hit the UK and Scottish Government targets. We need an additional 28GW or so, but with the constant increase in the size of offshore turbines and ever-improving installation techniques, this is very doable,” he says.

Sykes recalls that in his early years in the industry, in the years after 2010, everyone was excited by the arrival of 3.6MW turbines. “Today we are seeing turbines capable of generating over 10MW and that is a significant game-changer,” he comments.

To put this in context, a single rotation of the blades of an 8MW turbine can generate enough electricity to power the average family home for more than 28 hours, and these turbines generally achieve twelve rotations a minute. 

“We are currently installing offshore wind turbines with 80-metre-long blades. The next generation of wind turbine that we’ll install will have 100-metre-long blades. You have to remember too, that our Hornsea 1 Wind Farm is located 50 miles off the coast, so it is way beyond the visible horizon. These are truly, infrastructure-scale projects, generating power that is on the same scale as a very large fossil fuel plant or a nuclear reactor,” he says. 

Does this mean that we can eventually do without fossil fuel or nuclear plants altogether? Sykes points out that whilst Ørsted’s mission is to create a world that runs entirely on green energy, questions of what mix of power generation a country goes for over the coming decades belong in the political realm, noting that mainstream thinking is that this is wholly achievable. 

“Offshore wind will be the backbone of the energy system in the UK once we reach 2030 and beyond. On the larger stage, it is the connection with continental Europe and the linking of offshore wind energy with the emerging hydrogen economy, as well as demand side response, that makes a reliable, wholly renewables-based energy mix something that is absolutely achievable,” Sykes says. 

Ørsted is committed to delivering a zero-carbon energy system that makes bills affordable for consumers, and which gives the UK businesses a very affordable electricity and energy supply. 

“We are convinced this will give the UK an energy structure that will be competitive with any other country around the world,” he notes.

“If we step back a bit, the whole energy system will be going through a real transformation as transportation shifts away from fossil fuels. 

“When we reach the point where electric cars are commonplace, there will be the option to sell electricity in the car back to the grid. That alone will create a massive storage capacity since the overwhelming majority of cars are parked for the greater part of any 24-hour cycle,” Sykes points out. 

Right now it is difficult to predict how much storage Scotland and the UK will need to have attached to the grid to balance its renewable power generation capacity. However, Sykes points out that the National Grid and other players have already said that they can definitely accommodate the 40GW goal from offshore generation, as and when it becomes available.

“It is important to remember that this industry does not get any government help with building out the infrastructure. 

"That all has to be financed by us. We only receive payment for the electricity we generate. 

“Our market capitalisation is a demonstration of the future value that investors see in this technology. And, it is exciting to see the traditional oil majors now expressing interest in renewable generation and the extent to which they are moving into this space – we welcome newcomers to join us on the journey to a clean energy future,” he concludes.

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Emerging hydrogen economy may solve energy storage issue

IT is frequently argued that offshore wind, like other renewables, suffers from being intermittent and from generating power at times when not much power is needed, such as at night. 

The bigger the UK and Scotland’s offshore generating capabilities become, the sharper these issues will become, unless the industry finds some great solutions.

Benj Sykes, Vice President in the UK offshore wind business for Ørsted, argues that the solution to the problem lies in the emerging hydrogen economy. By using offshore wind to power the electrolysis required to split off hydrogen from water, the industry will be able to generate as much stored energy as is required by society, he points out. 

Ørsted already has a number of hydrogen-related projects running. It is part of the Gigastack consortium, along with ITM Power, Phillips 66 Ltd., and Element Energy. 

The Gigastack project aims to show how renewable hydrogen derived from offshore wind can support the UK’s 2050 net-zero greenhouse gas emissions target. 

Producing hydrogen from water, using offshore wind to drive the electrolysis process, enables the process to be completely decarbonised. 

Sykes notes that this means that energy-intensive industries and the transportation sector will have the opportunity to reduce the carbon intensity of their fuels by using renewable hydrogen.

The initial, feasibility phase of the Gigastack project was completed in 2019.

The consortium has just won additional funding of £7.5 million for the project, as part of the Hydrogen Supply Competition being run by the Department for Business, Energy and Industrial Strategy (BEIS). 

For the first part of the project ITM Power developed designs for a low-cost modular five-megawatt electrolyser. 

The second phase begins a Front-End Engineering Design (FEED) study on a 100MW electrolyser, which will specify the detailed workings of a system connected to a wind farm and industrial users. 

The offshore wind power will come from Ørsted’s Hornsea Two offshore wind farm. The project will help to validate the production of hundreds of megawatts of electrolysers a year. 

Anders Christian Nordstrøm, Vice President for Hydrogen, Ørsted, comments: “Creating renewable hydrogen with offshore wind really has the potential to decarbonise industrial processes, and what is needed now is to scale up the electrolyser technology and bring the cost down.

“At the right cost, this technology has the potential to play a huge role in meeting the UK’s decarbonisation targets. 

“We’re excited to be part of this project in the Humber region where we are already very active, including constructing the biggest offshore wind farms in the world, Hornsea One and Two, and with them setting the global standard for deployment of offshore wind at scale.”

In another project, Ørsted and BP have agreed to the joint development of a large-scale renewable hydrogen project at BP’s Lingen Refinery in North West Germany. 

The project, which is expected to be operational in 2024, will comprise a 50 Megawatt (MW) electrolyser system capable of generating one ton of renewable hydrogen per hour or almost 9,000 tonnes a year. 

This would be sufficient to replace approximately 20 percent of the refinery’s current fossil-based hydrogen consumption, avoiding around 80,000 tonnes CO2 equivalent emissions a year – equivalent to emissions from around 45,000 cars in Germany. 

The project is also intended to support a longer-term ambition to build more than 500MW of renewable hydrogen capacity at Lingen. This could provide renewable hydrogen to both meet all the refinery’s hydrogen demand and provide feedstock for future synthetic fuel production. The electrolyser is expected to be powered by an Ørsted North Sea offshore wind farm.

Martin Neubert, Executive Vice President for Ørsted comments: “Heavy industries such as refineries use large quantities of hydrogen in their manufacturing processes. They will continue to need hydrogen, but replacing the currently fossil-based hydrogen with hydrogen produced from renewable energy can help these industries dramatically lower their CO2 footprint. 

"But first, renewable hydrogen has to become cost competitive with fossil-based hydrogen, and for that we need projects such as this with bp’s Lingen refinery which will demonstrate the electrolyser technology at large scale and showcase real-life application of hydrogen based on offshore wind.”

The partners have jointly applied for funding for the project named Lingen Green Hydrogen from the EU Innovation Fund, which is currently one of the largest funding programmes for innovative low-carbon technologies focusing particularly among others on energy intensive industries.