OTC 2019 ENERGY SYSTEM INTEGRATION NORTH SEA ENERGY SYSTEM - PowerPoint PPT Presentation

OTC 2019 ENERGY SYSTEM INTEGRATION

NORTH SEA ENERGY SYSTEM INTEGRATION IN THE NETHERLANDS

OVERVIEW SYSTEM INTEGRATION • Offshore oil & gas infrastructure • Offshore wind energy infrastructure • Integration options: legal aspects

Gas & Oil fields and pipelines Gas fields OFFSHORE Oil fields Gas pipeline Oil pipeline OIL & GAS SYSTEM • Approx. 160 oil & gas E&P platforms o (93% for gas extraction, 7% for oil) • Approx. 4500 km of pipelines • 3 main offshore trunk pipelines - WGT, NGT, NOGAT

OFFSHORE OIL & GAS INFRASTRUCTURE END OF ECONOMIC LIFETIME • oil & gas fields nearing end economic lifetime o timing depends on: costs & gas price development 10 YEARS TIME • Expectation: Acceleration of decommissioned gas fields o also in view of current negative investment climate • Risk of premature decommissioning Number installed Number removed / re-used

Gemini 600 MW SCALING UP OF OFFSHORE WIND Current wind farms in operation: Egmond aan Zee TOTAL CAPACITY: 957 MW 108 MW Princes Amalia 120 MW Luchterduinen 129 MW

Ten Noorden van de FUTURE OFFSHORE Waddeneilanden WIND FARMS IJmuiden Ver 4 operational OWFs 957 MW Hollandse Kust (west) Roadmap 2023: 5 tenders 3500 MW Roadmap 2030 7000 MW 2030 11.5 GW TenneT (TSO) Connects OWFs to new offshore grid

LEGAL FRAMEWORK OFFSHORE SYSTEM INTEGRATION Water Act / National Water Plan: applicable to water systems, applies in EEZ Dutch Mining Act: applicable to mining activities, applies in EEZ Offshore Wind Energy Act: legal framework for development wind energy projects within EEZ Electricity Act : applies in EEZ, only offshore wind farms, electricity generated by offshore wind farms and grid at sea

SYSTEM INTEGRATION LEGAL ASPECTS 1 Electrification existing gas platforms 2 Power to Gas (H 2 ): re-use of platforms 3 Power to Gas (H 2 ): re-use for storage 4 Power to Gas (H 2 ): re-use of pipelines

ELECTRIFICATION 1 GAS PLATFORMS Important condition: → to enable re-use of platform as H 2 production and/or CO 2 storage, platform requires fuel even when gas production has ceased. 3 power connection options: 1. onshore transformer (Q13a-A platform) 2. OWF 3. grid at sea

ELECTRIFICATION 1 LEGAL ISSUES Connection to OWF • Direct line o cable ⟶ no legal qualification, not regulated / permitting issues • Existing OWF PPAs o may ‘prohibit’ supply to platform • Post-2016 OWFs o connected to substation ⟶ part of grid at sea operated by TenneT

ELECTRIFICATION 1 LEGAL ISSUES Connection to grid at sea • TenneT’s statutory task to connect limited to OWFs o i.e. does not extend to platforms • TenneT prohibited carrying out activities other than statutory tasks • TenneT liable for transmission interruptions ! new connection = additional risk

POWER TO GAS 2 GREEN HYDROGEN

PRODUCTION OF GREEN HYDROGEN 2 RE-USE OF INFRASTRUCTURE Water Purification Electrolyses Compression Storage

POWER TO GAS: RE-USE OF PLATFORM 2 LEGAL ISSUES OWF generated power transported to electrolyser on offshore platform LEGAL ISSUES a. OWF must connect to grid at sea b. TenneT cannot connect platform to grid at sea c. Disused platform must be removed

POWER TO GAS: RE-USE OF PLATFORM 2a AN OWF MUST CURRENTLY CONNECT GRID AT SEA Proposed amendments to Offshore Wind Energy Act OWF not only electricity, but wind energy “ energy carrier that originates after conversion of wind ” wind energy (e.g. electricity, hydrogen, ammonia) connection point point where a connection is made to the grid at sea or to an installation CONSEQUENCES • Offshore Wind Energy Act conversion offshore power to H2 ⟶ important for site permit • Connection of OWF to installation ⟶ possible (onshore / offshore) • Connection of H2 production platform to grid at sea ⟶ not possible under amended Offshore Wind Energy Act , i.e. legal issue B still not resolved.

POWER TO GAS: RE-USE OF PLATFORM 2c REMOVAL OBLIGATION National law: Dutch Mining Act “ A mining installation that is no longer in use is removed .” no longer in use ⟶ no longer used for E&P or storage of substances. ⟶ gas platform considered no longer in use Hydrogen production not a mining activity International law: UNCLOS, IMO Guidelines, OSPAR treaty • All international treaties provide removal obligation • Possibilities coastal states to allow re-use

POWER TO GAS: RE-USE OF PLATFORM 2c REMOVAL OBLIGATION • Amendment to Mining Act has been announced to cater for re-use, including hydrogen • Recent first draft legislative proposal (consultation phase) • Re-use explicitly included in Mining Act o Minister may grant temporary exemption from removal obligation in case of re-use o Re-use may be another activity under the Mining Act (eg CO 2 storage) or another activity (eg hydrogen production) o Hydrogen production platform will have to apply for a permit under the Water Act o This permit may provide for a removal obligation if taken out of operation o The operator / permit holder of the gas platform will however not be released from its removal obligation under the Mining Act. If operator of H2 platform is a different party, this may lead to legal issues.

POWER TO GAS: RE-USE GAS FIELDS FOR 3 CCS / H2 STORAGE • CCS covered by Dutch Mining Act, mining activity: depleted gas reservoir still considered “in use”? • However: different permit under Mining Act • Timing issues: gap? Then removal obligation gas production permit holder • CO2 storage permit may however already be granted if a production license is still in effect. • H2 storage permit: Mining Act. No permit as long as gas production permit is in force.

POWER TO GAS: RE-USE PIPELINES 4 FOR TRANSPORT • Re-use of offshore gas pipelines for the transportation of H2? • Offshore gas pipelines owned and operated by private parties (operators and owners of gas production sites). Permits for pipelines granted under the Mining Act, in principle not restricted to the use of a substance • Removal obligation after the end of the use of the pipeline: rule that pipelines do not always have to be removed, but may be left behind in a clean and safe manner • If H2 transported to the Dutch coast: direct supply to industry? Or injected in onshore gas transport system? Operated by TSO, regulated by the Dutch Gas Act. Maximum H2 content permitted in gas fed-in to gas grid is very limited (0.5%). Other countries higher percentages, EU has not (yet) defined a safe level of hydrogen admixture to the gas grid • Separate H2 grid? Group company of TSO may construct/operate H2 grid. Competition with existing H2 networks in the Netherlands owned by private parties?

ANY QUESTIONS?

CONTACT KIRSTEN BERGER ADVOCAAT | PARTNER T +31 20 605 61 73 M +31 6 1296 7383 k.berger@houthoff.com

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