The North Sea, tapped for oil and natural gas in earnest since the 1960s by the UK, Norway, Germany, Denmark, the Netherlands and Belgium – is increasingly being utilised as a site for renewable energy projects, as well as carbon capture and storage (CCS). But with security of supply concerns intensifying as Europe cuts links with major oil and gas exporter Russia over its invasion of Ukraine, these coastal states have also launched new hydrocarbon exploration and development projects.

A key indicator of future energy sector travel was an agreement signed in April at a North Sea Summit II, staged in Ostend, a major Belgian North Sea port, where Germany, Belgium, Denmark, the Netherlands, France, Norway, the UK, Ireland and even landlocked Luxembourg, signed a declaration committing to major cooperation on developing offshore wind and renewable hydrogen projects.

Targets agreed included generating North Sea offshore wind power of at least 120 GW by 2030 and 300 GW by 2050. Germany, Denmark, the Netherlands and the UK also agreed combined targets of about 30 GW production capacity in large-scale onshore and offshore renewable hydrogen production by 2030.

Even the 2030 target is ambitious given industry association WindEurope estimates current North Sea offshore installations can generate less than 30 GW at present.

But the declaration stressed how the nine governments would act, encouraging the development of a ‘resilient, transparent and sustainable regional offshore renewable energy supply chain’, safeguarding the availability of critical raw materials through ‘import diversification, increased European output, and the enhanced circularity of offshore renewable energy and grid infrastructure’.

Crucially, the governments promised to address regulatory bottlenecks, while working with NATO to protect the physical security of these facilities and their subsea infrastructure.

A follow up offshore industry declaration said for these plans to happen, Europe’s wind power sector needed to grow significantly. This includes wind farm developers and investors; wind turbine, electrolyser, foundation and other component manufacturers; EPC (engineering, procurement and construction services) contractors; vessel operators, ports, transmission system operators and grid infrastructure equipment suppliers.

It added: ‘To translate government targets into clear market volumes via well timed and designed auctions and openness to other transparent developments. To kick start investments where supply chain bottlenecks are most acute, public support – including financial support – is needed.’

Oseberg A Condeep oil platform off Norway in a heavy North Sea
Photo: Richard Child

Denmark 
Growth in North Sea offshore wind’s supply chain is nonetheless happening, with Denmark, a major wind power generator and equipment supplier and utiliser, being a case in point. Its North Sea-facing Port Esbjerg has been expanding its capacity to ship wind turbine components – last autumn starting construction of a 25 metre-high, 6,200 m² building ‘to speed up the growth in offshore-related activities, including for components of ever greater dimensions’, said a port memorandum.

It is also deepening its fairway, using a €28.3mn (Danish Krone DKK211mn) European Union (EU) grant so it can accommodate new large offshore wind plant installation vessels. Denmark also continues to push ahead with wind farms. It has, for example, in June (2023) released procurement details for 3 GW’s worth of North Sea offshore generation – building on the country’s current 2.3 GW total capacity (including in the Baltic Sea and Kattegat Strait).

The Danish government has also been working up plans to build a 120,000 m² artificial island, 80 km from the Jutland peninsular that would be a private-public energy hub – not just a site for offshore power plants, but also a transmission centre for wind power. It would gather and distribute electricity from hundreds of surrounding offshore wind turbines, supplying 3 million consumers in North Sea coastal states with green energy.

The project was, however, pushed back in June 2023, while the government assesses how to ensure it will be profitable, as well as environmentally sound – but it still has full political support.

On the other hand, the Danish government has eased a 2020 pledge to stop all oil and natural gas exploration in its maritime exclusive zone. A key reason for this is Russia’s invasion of Ukraine, with Prime Minister Mette Frederiksen saying in April 2022: ‘We will increase production of natural gas in the North Sea for a limited time period,’ to reduce reliance on Russian supplies.

The Danish Energy Agency launched a North Sea oil and gas exploration and production tender in July, following an unsolicited application from Norwegian energy company BlueNord in the Elly and Luke fields, for example.

The UK 
Similar competing pressures of environmentalism and energy security are all too clear in the UK as well, where the government’s determination to continue facilitating oil and gas exploration and production prompted Greenpeace in August to cover one of Prime Minister Rishi Sunak’s private homes in black cloth.

Environmentalist ire has been sharpened by the UK government announcing in July it was committing to granting 115 bids for oil and gas extraction licences in its 33rd North Sea Oil and Gas Licensing Round, while claiming this would somehow help reduce carbon emissions.

The UK regulator, the North Sea Transition Authority (NSTA), has been assessing 115 bids across 258 blocks and part-blocks, from 76 energy companies. These are in the West of Shetland, Northern North Sea, Central North Sea, Southern North Sea and East Irish Sea areas licensing, and priority approval will be made for four clusters in the Southern North Sea.

These, said an Authority note released last October, ‘have known hydrocarbons, are close to infrastructure and have the potential to be developed quickly’. It added: ‘Applicants will be encouraged to bid for these areas so they can go into production as soon as possible.’

In its 31 July note, the Authority claimed that in the UK, domestically produced natural gas ‘is on average almost four times cleaner than importing gas in LNG form… because of both the way the gas is transferred and, in some cases, the methods of extraction’. This is for just the production of gas and ignores the rather larger emissions from its subsequent burning. It said Norway has the lowest carbon intensity of all LNG imports at 33 kgCO₂/boe, and Peru the highest at 90, the average being 79, while locally sourced UK gas has a carbon intensity of 21 kgCO₂/boe.

However, 16 of the prospect areas are for oil against the 39 that are for gas, reducing the green tinge of this announcement. As a result, Prime Minister Sunak stressed how the plan would help reduce potential British dependence on Russian oil, and that if Britain meets its net zero carbon targets in 2050, 25% of its energy needs will come from oil and gas. So, better that is home-made than imported from ‘hostile states’, said the Prime Minister.

That said, burnishing its environmental credentials, the UK government stressed how it was releasing offshore CCUS licences, off North East Scotland and the Humber (north-east England), offering 20 licences of around 12,000 km² in size, larger than Yorkshire. The NSTA said in May it was also approving offshore CCUS storage off Teesside, also off north-east England and Liverpool, north-west England.

‘Once the new storage sites are in operation – and in some cases first injection could come in as little as six years – they could make a significant contribution to the aim of storing up to 30mn tonnes of CO₂ per year by 2030, approximately 10% of total UK annual emissions, which were 342mn tonnes in 2021,’ said the NSTA.

These mixed messages about what was once unadulterated hydrocarbon bounty for the UK, is indicative of how the North Sea is also the site of innovative sustainability-focused technologies.

Environmentalist ire has been sharpened by the UK government announcing in July it was assessing 115 bids for oil and gas extraction licences in its 33rd North Sea Oil and Gas Licensing Round, while claiming this would somehow help reduce carbon emissions.

Hydrogen 
One potential way forward to boost environment-friendly security of supply is green hydrogen production, as per the North Sea Summit II agreement.

In March, Paris-listed Lhyfe agreed with UK-based Centrica to jointly develop offshore renewable green hydrogen in the UK Southern North Sea, which would then be safely stored and distributed in Britain. Colin Brown, UK and Ireland Country Manager of Lhyfe, said: ‘Offshore electrolysis coupled with hydrogen storage will maximise the huge potential of offshore wind around the UK.’

Meanwhile, Lhyfe is involved in the Hydrogen Offshore Production for Europe (HOPE) project consortium, with Alfa Laval (Denmark), Plug (the Netherlands), Strohm (the Netherlands), EDP NEW (Portugal), ERM (France), CEA (France), POM-West-Vlaanderen (Belgium) and DWR eco (Germany), also targeting North Sea hydrogen production. It has signed a €20mn grant agreement with the European Commission aimed at developing, building and operating 10 MW of hydrogen production off the Belgium coast by 2026.

‘The aim is to demonstrate the technical and financial viability of this offshore project, and of pipeline transport for supplying onshore customers,’ said a Lhyfe note. 

The future of the North Sea 
Should these hydrogen projects and offshore wind plans be successful, the transformation of the North Sea from being a major centre of oil and gas production to an international hub for renewable energy will start to take shape. The North Sea Summit II declaration shows there is emerging consensus, which integrates the UK as it claws back diplomatic relations with continental Europe damaged by Brexit.

‘Underlining that energy security and the fight against climate change are crucial to the future of Europe, we need to strengthen our cooperation to ensure affordable, secure and sustainable energy, while at the same time, continuing our efforts to protect the marine ecosystem,’ said the statement.

‘In response to Russia’s aggression against Ukraine and attempts of energy blackmail against Europe, we will accelerate our efforts to reduce fossil fuel consumption as well as dependence on fossil fuel imports, and promote the rapid upscaling and deployment of renewable energy for an energy resilient Europe, and guarantee the resilience of our offshore energy infrastructure,’ emphasised the declaration.

Offshore wind farms and connecting power cables in the German Bight, off German’s North Sea coast
Source: Maximilian Dörrbecker (Chumwa)