Download Working together to create a sustainable and secure energy future

European
North Sea
Energy
Alliance
Working together
to create a sustainable
and secure energy
future
2014
Contents
Introduction
03
The EU climate targets and energy market conditions
04
Factors changing energy market conditions
05
The energy challenges
05
North Western Europe, the centre of the energy challenges
06
The ENSEA project
07
Results so far
08
Activities of common interest
09
Technological ‘lighthouse’ themes
Next steps
10
12
Introduction
The energy supply system of the future will be characterized by a number of features that will
make it fundamentally different from its current form. Firstly, an increasing share of energy is
generated from renewable resources which are difficult to control. Secondly, more energy will
be locally generated through cogeneration, biomass, green gas and local renewable sources of
energy (decentralized energy production). This poses additional challenges to matching supply
and demand of power. The current energy system is not capable of balancing fossil energy
resources with the rising share of renewables and decentralized energy production. Currently
it is not possible to store power in a cost-effective way. Therefore, it is necessary to focus on
energy systems integration rather than on specific renewable energy sources to enable the
efficient use of energy resources in the future. Concluding, the rising share of fluctuating and
decentralized power production has to be stabilized within the electricity grid by the use of quick
regulating power plants, especially gas power plants which use biogas in addition to natural gas
to serve as back up. Additional storage systems will be necessary to ensure a constant supply.
To manage the decentralized components an energy management system in a smart grid is
required. These innovations require a holistic view of the energy system.
Through interregional cooperation of Scottish, Norwegian, German and Dutch energy clusters
the ‘European North Sea Energy Alliance’ (ENSEA) focuses on integrated energy systems
within and around the North Sea. This holistic approach not only focuses on the technological
and policy related aspects but also takes into account enabling and interrelated aspects like
economic, regulatory and social acceptance issues. After several thorough analyses on energy
innovation of the ENSEA regions and the North Sea region as a whole, the consortium has
developed a joint action plan to enhance cooperation and contribute to integrated energy
systems. This brochure provides information on the most important aspects of these plans in
the form of thematic areas of focus. These vary from the above mentioned enabling programme
themes to technological lighthouse themes such as hydropower, green decommissioning,
power-to-gas and energy systems integration governance and planning. In order to achieve
progress and the implementation of the enabling and thematic areas of focus, the ENSEA
consortium is looking for your ideas and support. Join us to make it happen.
Dr. Koos Lok
ENSEA Project Coordinator
03
The EU
climate
targets
and
energy
market
conditions
In 2009, through the ‘climate and energy package’,
the European Union (EU) committed itself to ambitious
climate change and sustainable energy targets for
2020. The package ‘20-20-20 targets’ sets three key
objectives. Although the EU is making good progress
towards meeting these targets, a clear, continuing policy
framework for the period up to 2030 was needed. Such a
framework would be beneficial for increasing regulatory
certainty for investors, and for ensuring a coordinated
approach among Member States. As a result, in 2014,
the European Commission proposed a policy framework
to drive continued progress towards a low-carbon
economy; by reducing greenhouse gas emissions by up
to 40%, and increasing the share of renewables to 27%.
The proposal aims to build a competitive and secure
energy system that;
• ensures affordable energy for all consumers;
• increases the security of the EU’s energy supplies;
• reduces the dependence on energy imports; and
• creates new opportunities for growth and jobs.
In addition, the European Commission’s 2050 roadmap
for a low carbon economy proposes an 80% reduction
(compared to 1990 levels) in EU greenhouse gas
04
emissions through domestic reductions alone.
Factors changing
energy market
conditions
Energy and climate change policies, aimed at supporting energy
transition, are important drivers of changing energy market and
investment conditions. However, many other factors cause the energy
system to be in a continuous state of flux. Examples of the these factors
include rapidly developing energy technologies such as; the increase
in unconventional gas exploration (especially in North America); the
rapid increase in decentralised energy production; changing geopolitical
conditions; the efforts to create a truly integrated European energy
market, and various policy measures related to nuclear energy and nonclimate change environmental issues.
The energy challenges
Coupled with various changes that the European energy system is facing, climate change targets have inspired the
rapid energy transition. This has resulted in serious problems arising through attempts to reconcile the multiple goals of
delivering energy in sustainable, secure and affordable ways. These challenges will need to be addressed and tackled,
both separately and jointly, to secure a well-functioning energy system in Europe as this is one of the key conditions for
sustainable social and economic progress. The following provides examples of new problems that have emerged in the
European energy system during the last decade:
• the increasing difficulty of balancing the power grid and preventing extreme power price volatility;
• the organisation of sufficient back-up energy sources with a solid business-case is becoming a growing concern in
Europe;
• the considerably weakened financial position of traditional large energy producers in the EU has reduced their
energy investment and innovation potential;
• the increasing prominence of public or community opposition in relation to many new forms of energy investment;
• the subsidy schemes, which have been levelled-off on the retail energy users, can cause energy prices to rise to
sometimes unaffordable levels; and
• the increasing distances between energy supply and demand require formidable additional grid investment for which
it is not easy to find funding.
05
North Western Europe, the centre
of the energy challenges
Many of the challenges the EU energy system is facing are strongly felt in North Western Europe (United Kingdom,
Scandinavia (Finland excluded), Germany, Benelux and France) and the North Sea area in particular. Firstly, 70-75%
of all primary EU (plus Norway) energy production and production from other fossil and renewable sources, comes
from North Western Europe. This is the equivalent of some 760 million tons of oil p.a. (as of 20111). Just over 60% of
the energy demand of the EU and Norway, comes from the same region2. Thus, the energy system of North Western
Europe represents some two thirds of Europe’s and 6% of the world’s energy system.
Secondly, North Western Europe can be viewed as a hotspot of energy transition as few regions deal with such rapid
changes in energy policy-setting, energy technology development and the energy mix. For instance, North Western
Europe faces a rapid decline in nuclear capacity, on one hand, and a rapid build-up of renewable capacity on the
other. A striking energy transition development is taking place in the North Sea where, during the next few decades,
some 600 oil and gas platforms will have to be dismantled because exploration and production of fossils is ending.
In addition, during the same period, renewable offshore wind capacity, of the order of 50-100GW, is scheduled to
be installed in the same area. This constitutes a massive demonstration of energy transition and energy innovation.
Similarly, in the regions around the North Sea innovative renewable and traditional energy production capacity is
extending rapidly.
06
1
European Commission, EU energy in figures, Statistical Pocketbook 2013, p. 33. | 2 European Commission, EU energy in figures, p. 71.
The ENSEA project
Given the various challenges North Western Europe is facing in the energy
system, and the central role of the North Sea area in Europe’s energy
transition, a number of parties from this area decided to collaborate on
establishing a region of knowledge around the North Sea with a primary
focus on dealing with the energy transition challenges mentioned. To that
end, in October 2012, a three-year EU-funded collaborative initiative was
started to establish and develop the ‘European North Sea Energy Alliance’
(ENSEA). The participating parties represent the ‘triple-helix’: organisations
of the public, business and academic energy sectors from the Northern
Netherlands, North West Lower-Saxony, South West Norway, and Scotland.3
The network will be extended via associated partnerships of other interested
triple-helix parties from the North Sea region.
According to its mandate, the ENSEA project “aims to increase the competitiveness of research-driven energy clusters
through better coordination and exploitation of research to support innovation in Energy Systems Integration”.
So, to enable the use of resource-efficient energy sources ENSEA will focus on a holistic system integration approach
to exchange competences within different fields of expertise while combining technical, economic and societal
aspects on an international level. The figure below shows the cross cutting themes of system integration in which the
participating regions have significant experience in regards to research and industry.
RTD
Economic
feasibility
Legal issues
Social issues
Balancing
EV / Ems Achse /
Scotland
EV / Rogaland
Ems Achse / EV
Ems Achse / EV /
Rogaland
Back up
Ems Achse / EV /
Rogaland
EV / Rogaland
Ems Achse / EV
Ems Achse / EV /
Rogaland
Storage
Rogaland /
Scotland
Rogaland
Ems Achse
Rogaland /
Ems Achse
EV / Ems Achse /
Scotland
Ems Achse / EV
Ems Achse / EV
Ems Achse /
Rogaland
Infrastructure
3
For further information see www.ensea.biz
07
Results so far
As a result of ENSEA activities since October 2012, the ENSEA region’s energy innovation capabilities and potential
have been characterised (in terms of analysis of their strengths, weaknesses, opportunities and threats), as well
as the regional and inter-regional visions and policies for a more integrated energy future. Using this as a basis, a
portfolio of regional energy innovation plans has been collated and developed, including developing regional innovation
implementation strategies, and outline regional action plans. The combining and analysis of these four regional reviews
has produced an overall portfolio of some 160 areas of project ideas.
An overall impression, emerging from the inventory of activities and plans, clearly indicated that energy innovation
is not only booming in all the four regions but moreover, is growing rapidly. It also, however, has become clear that
coordination of such activities around the North Sea is still poor, and that energy transition challenges are becoming
big. It already affects Europe as a whole to such an extent, that substantially more collaboration between various
energy players will be required to resolve the current energy issues. These issues include: resolving power grid
balancing challenges due to the rapidly increasing role of intermittent power supply; energy price instability and
negative prices; increasing need for grid investment; substantial gas-fired power production capacity standing idle;
increasing role for coal and lignite contributing to larger emissions; energy prices undermining EU competitiveness
versus United States. In fact, recent evidence has made it abundantly clear that the time for partial and regional/
national energy solutions has passed. In its place, there is a need for energy systems solutions, based on international
collaboration with parties in the North Sea region.
The following figure serves to illustrate the complexity of an integrated energy system. It shows how renewable
energy sources are converted into power, and how such power can be stored for use in other forms of energy at the
appropriate moment of time. In fact the power system and gas system are integrated to allow for an optimal energy
system in terms of storage, balancing and allocation to further use.
08
Decentral Energy
Distribution
Central Energy
Social Acceptance
Wind Energy
Wave and
Tidal Energy
Solar Energy
Blue Energy
H2 Storage
Energy Systems Integration
CO2 Capturing
Biomass or
Biogas
Methanation CH4
Infrastructure Electricity Grid
E-Home
Sustainable
Communities
Consumption + Production
Infrastructure Gas Grid
Smart City
Gas GH4
Storage
Prosumer
Social Acceptance
Activities of common interest
enabling ‘lighthouse’ themes
In the ENSEA work also a beginning has been made of identifying cluster activities which are of common interest, provide
opportunities for exchange of best practice, learning and future cooperation. Such cluster activities will in the following be
indicated as the enabling ENSEA ‘lighthouse’ themes. With ‘enabling’ we mean that such joint activities typically relate to
triple-helix conditions for integrated joint investment activity in and around the North Sea area. Examples, to be worked out
later in greater detail, are:
• programs for educational collaboration and exchange between the various energy knowledge centres around the North
Sea (estimated number in the ENSEA regions about 50);
• accelerate innovation by facilitating increased interaction and cooperation within and between regional SME networks
around the North Sea;
• setting up networks of sustainable communities around the North Sea aiming at participation and consumer engagement;
• setting up a joint research pool via PhD and other research staff exchange programs and by executing e.g. joint
modelling work and jointly participating in North Sea pilot projects; and
• setting up frameworks for energy cluster development and associated coordination and collaboration of various energy
innovation related activities at the official level and/or under the auspices of the energy triple-helix cluster organisations in
the various North Sea regions.
Collectively such enabling ‘lighthouse’ themes, if implemented successfully, are expected to set a stage for true energy
systems integration joint investment programs (see the so-called technological ‘lighthouse’ themes) both public and private.
technological ‘lighthouse’ themes
The ENSEA analysis, however, also has learned that a number of energy innovation challenges are so complex that without
interregional and international collaboration, and without good collaboration not only within regional triple helix structures but
also between various regional triple-helix structures, they simply cannot effectively be dealt with. Clear examples are:
• how to optimally integrate hydro storage facilities and options into the overall North Sea energy system;
• how to reconcile the anticipated decommissioning of the about 600 oil and gas platforms and related grids with the
potential to use at least part of such infrastructure for modern renewable based energy and chemical activity in the
relatively safe offshore area;
• how to resolve the increasing power grid balancing challenge due to intermittent sources with the help of new storage
options based on power-to-gas and related technology development;
• how to optimally design - both in terms of spatial planning and of economics - the North Sea area power and gas grid,
as well as wind farms and other energy related installations, taking into account differentials in national energy policies,
public acceptance issues, legal boundaries, etc.
The structures that will need to be set up to face the above mentioned challenges are the subject of the four technological
‘lighthouse’ themes of the ENSEA program. Although the list may not be exhaustive, collectively these four themes, if
properly combined with the enabling themes mentioned earlier, are expected to make a serious contribution to better
safeguarding affordable, sustainable and secure energy supply for a considerable part of the future European energy
system. The choice of the four technological ‘lighthouse’ themes is related to the results of the ENSEA regional and
interregional analyses. These are illustrated on the subsequent pages.
09
Technological
‘lighthouse’ themes
Hydropower
Rogaland provides the bulk of the hydropower capacity in Norway both from run-off river plants or conventional hydro
electric plants. Moreover, Norway has almost fifty percent of total storage capacity in Europe (circa 80 TWh). Also
Norway already has DC interconnectors from its South Western part leading to Denmark and the Netherlands enabling
for power arbitrage with hydro energy thus contributing to grid balancing. There are plans for another interconnector to
Denmark partly reserved for balancing services; interconnectors with Germany and the United Kingdom are foreseen
to be constructed during the next five years. Like Norway, also Scotland has a mature and well-established hydropower
industry with high capabilities and potential for expansion. Given the important role of hydro energy in balancing the
power grid it is extremely important to utilize this potential in the best manner. Obviously power grid development across
the North Sea linking hydro capacity with other energy sources will therefore need to be carefully coordinated with the
various other energy and grid investments in the regions.
Green decommissioning
The financial reservations for decommissioning the various oil and gas platforms and related infrastructure in the North
Sea are currently estimated at some €30-50 billion, but experience has learned that such amounts could easily be
exceeded as time passes by. At the same time investments in offshore wind and related grid in the North Sea area
are estimated to be a multitude of that amount. In other words in the North Sea area during the next few decades
investments are likely to be in the order of a few hundreds of billions of Euros. At the same time public acceptance
issues of all kind of new energy activity seem to rapidly increase, which may support the request for offshore rather
than onshore new energy activity. This raises the issue if the decommissioning activity on the one hand and the green
energy investment on the other hand can be intelligently combined for innovative energy production, conversion (powerto-gas) and large-scale storage activity. This could involve existing infrastructure that otherwise would be dismantled
for new green energy activity like: combining available CO2 and H2 flows into synthetic/green methane, chemical
conversion (methanol), storage of gases and chemicals for optimal application at the suitable market conditions,
turning residual heat into biomass production (e.g. algae), using tidal and wave energy, combining large-scale chemical
storage with hydro storage options and optimal grid management, economic and societal assessment of large-scale
chemical storage. This way, traditional platforms for oil and gas exploration could be transformed into modern green
energy conversion and storage facilities giving the old platforms a new life. Given the potential savings of such smart
combinations it seems logical to investigate the potential of this green decommissioning option with one or a few North
Sea international pilots that can be used for not only public illustration, but also for all kinds of joint research and training
in which the ENSEA regions collectively have been demonstrated to excel.
10
4
Lund, Heinrick, Renewable Energy Systems: A Smart Energy Systems Approach to the Choice and Modelling of 100% Renewable
Solutions, 2014 Elsevier
North Sea power ring system
There is increasing recognition that intermittent energy sources can only play a leading role in the European energy
system if the grid balancing challenge they contribute to can be resolved. The development of storage technologies,
for renewable energy, are likely to play a crucial role in solving that challenge. Except from the hydro option already
mentioned, promising new storage options are power-to-gas, compressed air and batteries, which could be developed
to complement existing storage technologies, such as for heat. If power-to-gas technology is to play a substantial role
in storing renewable energy, the renewable-based electric system and (green) gas-based system will increasingly be
integrated, both technically and economically, and will need to be increasingly coordinated with the heat-based systems
and other storage options. This can be considered as a Smart Energy System4 (combination of Smart Electricity, Smart
Gas and Smart Heat Grids). A major challenge will then be to optimise the system in terms of production, storage and
transport, taking into account the costs and benefits of using electric, gas or heat related forms of energy. So far, pilots
on power-to-gas or other storage options, have only been based on small-scale and regional pilots (an estimated 15 in
the ENSEA region). However, if such storage options are to develop into a full blown component of our energy system,
at some stage there will be a need for an interconnected North Sea electricity/gas/heat grid, (essentially, a North Sea
Energy Ring/Smart Energy System), demonstrating grid connections and large-scale energy storage to balance power
supply and demand. Therefore, North Sea pilots will have to be designed through joint action. Again given the expertise
in the ENSEA region, the ENSEA programme is an appropriate framework to set the stage for such pilots.
Energy systems integration modelling and governance
All kinds of regional and national activities are currently initiated in the North Sea area. To illustrate, almost all North
Sea countries have ambitious plans for initiating or extending offshore wind capacities such that the current about 4GW
installed capacity is likely to grow at least tenfold within the next 15 years. The same applies for various initiatives for
interconnectors, harbour facilities, etc. Because much of regulation, subsidies, licenses and other public conditions
are still organized at the national level, there is at least a risk if not a threat that at the end of the day the resulting
design will turn out to be sub-optimal both business wise, from the public acceptance perspective and in terms of
spatial planning. In fact what seems to be lacking is not only a good public infrastructure for coordination, but also
collaboration between the relevant private actors including SMEs. What also seems to be lacking is a good modelling
base, that is to say a system of intelligent tools – either existing or newly developed ones – that models the actor
interdependencies, can be used for simulation and find optimal solutions from various perspectives. Key issues that
could then be addressed are, for instance, how particular energy technology mixes affect the energy system, the
economy and the environment; or what the impact could be of specific market or technology energy transition policies
and measures. Given the ENSEA specializations, it stands to reason that initiatives are designed
that will support conditions for organizing such optimal decision-making.
11
Next steps
The next phase of the ENSEA project is looking forward to realistic implementation based on business
cases. Therefore we need to identify relevant themes within the European programmes for synergy
purposes. This means: match the project theme challenges with current EU strategies; initiate further
dialogue with the private, public and academic sector; investigate whether other EU initiatives could provide
support and initiate a bottom-up process to develop a strategic roadmap on the implementation of the
ENSEA joint action plan. This will lead to:
• Establishment of a North Sea research association;
• Strategic partnerships in the North Sea area; and
• Establishment of a quadruple-helix structure5 at operational level in the North Sea area.
The ENSEA Consortium invites you to join and make this happen.
5
The ‘quadruple-helix’: organisations of the public, business and academic energy sectors and society.
This project is supported by the European Commission through the Seventh Framework Programme
Center for sustainable energy solutions
Website: www.ensea.biz | Twitter: @ENSEA2012 | LinkedIn: ENSEA – European North Sea Energy Alliance