The Oil & Gas Authority ("OGA") published its final UKCS Energy Integration Report on 6 August 2020. It highlights the additional potential for offshore renewables to contribute approximately a further 30% towards the UK’s net zero target. This means the UK Continental Shelf (UKCS) could support, in combination with complementary investments in onshore energy infrastructure, around 60% of the UK’s decarbonisation requirements.
Part of the OGA's review included a regulatory assessment. The Report notes that regulatory regimes already exist in respect of the different energy sectors operating on the UKCS and each has supported the safe and successful economic development of multiple UKCS energy sources.
Moving forward, the OGA considers that energy integration projects will require "close cross-regulatory co-ordination, to understand and manage requirements and timeline dependencies optimally". The industry has already seen progress via initiatives such as the DecomRegHub, but more needs to be done.
As well as promoting regulatory integration, the Report also encourages integration across wider offshore energy systems, including oil and gas, renewables, hydrogen and carbon capture and storage. One such example of a successfully progressing energy integration project is Pale Blue Dot Energy's flagship project, the Acorn Project.
As one of the UK's first carbon reduction programmes, the Acorn Project directly aligns with key proposals raised in the Report; aiming to deliver a carbon capture and storage (CCS) system in North East Scotland by 2024.
Strategically placed at the St. Fergus gas terminal in North East Scotland, Acorn CCS will reuse existing gas pipelines to transfer CO2 directly to the Acorn CO2 Storage Site. In line with the Report's objectives, re-using oil and gas reservoirs and existing infrastructure can accelerate the progress of CCS, connecting to onshore net zero hubs and saving 20-30% Capex on specific projects. With the critical CO2 transport and storage infrastructure already in place, the Project can be operational with minimal cost and risk. These elements, together with the relative ease of establishing the network of infrastructure to support CCS, are essential for meeting the Scottish and UK Government's Net Zero Targets by 2050.
The Acorn Hydrogen Project is also committed to introducing hydrogen as a major fuel in the UK; aiming to cut carbon emissions from industry processes and homes by 2025. Again by using existing infrastructure, North Sea natural gas will be reformed into clean 'Blue Hydrogen', with CO2 emissions safely mitigated through the Acorn CCS infrastructure. Blue Hydrogen will then be introduced into the UK's gas supplies, used both in transport applications and in the UK's gas grid to reduce carbon emissions.
In line with the Report's objectives, the Acorn Project can significantly contribute towards the UK's overall Net Zero target, with the potential to decarbonise approximately 30% of the UK natural gas supply by 2050. The Project also offers scope to support roughly half of CCS expansions in the same timeframe.
The project received the first UK CO2 appraisal and storage licence to be awarded by the OGA, and the Crown Estate Scotland’s first lease option. Not only does the project align with the energy integration promoted in the Report, but it will also help progress regulatory integration. Moving forward, the Project will almost certainly receive input from Ofgem, the HSE and SEPA.
With the combination of the OGA's Energy Integration Report, increasing renewable energy activity, the UK Government's recently announced 10-point plan and the upcoming COP26, there is no doubt that the various bodies who have a hand in regulating CCS and hydrogen infrastructure will be ready to support industry in its efforts to assist in achieving the UK’s net zero target.
