Action Agenda for Offshore System Integration
Within the consortium we have identified possible strategies to deal with challenges for system integration and have formulated actions on seven main themes for all North Sea stakeholders. Additionally, we have identified sets of top three actions for six offshore energy technologies and commodities (offshore wind, marine energy, green hydrogen, blue hydrogen, CCS and natural gas) to accelerate their development and strengthen their role in the offshore energy transition. By performing these actions, stakeholders can take key steps towards harnessing the energy potential of the North Sea while respecting the carrying capacity of our economy, society and nature.
Goal setting: international, spatial and integral
An international vision needs to be developed with supply, transport, demand and storage targets for the integrated energy system at the North Sea with international cooperation between North Sea region nations.
Governance of the transition
Establish and align a legal and regulatory framework for the realisation, operation and decommissioning of new offshore energy initiatives.
Economic stimuli and market development offshore system integration
Establish international clarity on long-term investment climate including market framework and related support schemes.
Technical improvements
(North Sea offshore demonstration Flagship programme)
Establish European portfolio approach of Research, Development & Deployment (RD&D) initiatives for offshore system integration pilots and demonstration programmes for cross-country and cross-sectoral learning: appoint demonstration areas for pilot and scale-up.
Minimize negative impacts and seek positive impacts on the ecosystem
The Ecosystem Agenda requires embedding ecological principles – of nature-inclusive design and multi-use of the environment – into the design of new offshore systems and establishing a robust North Sea Research and Monitoring Programme.
Collaboration, engagement, dissemination and communication
Facilitate effective collaboration and early engagement with stakeholders by establishing a dissemination platform for the exchange of objective and independent knowledge.
The Communication Agenda involves bringing the offshore into people’s homes and minds to build public awareness and support for the offshore system integration.
Human capital agenda
The Human Capital Agenda requires the assessment of the medium- and long-term workforce needs and challenges faced by the future offshore energy sectors to develop a Human Capital strategy and action plan.
Goal setting: international, spatial and integral
The transitions on the North Sea are unprecedented in size, scope and complexity. Various countries announced more ambitious offshore wind deployment targets around the North Sea. Targets for hydrogen production are set and have been increased recently. But for offshore hydrogen production, transport and storage these targets are lacking. CCS is considered to be inevitable to realise the European climate targets, though much uncertainty (and no policy targets) exists on the development of offshore carbon transport and storage. In this respect also targets for blue hydrogen are missing (with UK being the exception here). For natural gas the crisis in Ukraine has fast-tracked target setting on reduced gas consumption and diversification of sourcing. Though for the most North Sea countries clear targets on domestic natural gas production or consumption are absent.
The development of an international vision with key targets is needed to allow for proper use of the offshore region. It will not only give guidance to public and private investors and project developers, but, given the limited carrying capacities of the North Sea region, also helps reducing the pressure the energy transition exercises on other use-functions (e.g., nature and fishery). This vision should therefore be as spatial explicit as possible to enable discussion between stakeholders on the North Sea on fair and shared use of the limited space available and nature’s limited carrying capacity.
Next, planning of onshore and offshore energy infrastructure (electricity, gasses and CO₂) requires international coordination and collaboration between the various network operators and the offshore energy industry in order to provide more medium and long-term accepted guidance as to what needs to be done, when and by whom.
“An international vision needs to be developed with supply, transport, demand and storage targets for the integrated energy system at the North Sea with international cooperation between North Sea region nations.”
The vision is preferably embedded in National Energy and Climate plans or similar official policy reports by North Sea region countries. It is essential that this vision aligns with the infrastructure visions presented in the TNYDP and long term vision and scenarios of ENTSO-E and ENTSO-G. The recent statement of the North Seas Energy Cooperation that “ENTSO-E will prepare in 2023 a strategic offshore network development plan until 2050 for the North Seas Offshore Grid maritime area” is very welcomed, but it is crucial that this strategic offshore plan is coupled with at least a strategic plan for an offshore hydrogen backbone in the North Seas.
In a letter to parliament the Dutch government announcement the development of an ‘Energie Infrastructuur Plan Noordzee 2050’ (Energy infrastructure plan North Sea). Although the exact content of this plan is not yet clear this could serve as an important part of the Netherland’s contribution to such an international and integrated North Sea vision.
Governance of the transition
An integrated offshore system is expected to be hampered by inconsistency between national regulatory frameworks and the absence of laws and regulations to cover new innovative concepts that are being developed. The regulatory framework is typically following technology innovation. This means that agile and adaptive approaches have to be followed to ensure that new technologies (offshore hydrogen and energy storage), smart combinations between sectors (i.e. platform electrification) and international interconnections for electricity, hydrogen and CO₂ will be possible in the short term. This starts with the need for a clear definition of system integration, including some guidance when a development should be considered as system integration. This either requires an integrated approach or guidance on when a development can take place within the existing legal framework, albeit with some minor changes and clarifications.
The second point of attention is the absences of standards for offshore system integration concepts. National, European, and international standards are pivotal for the offshore energy system. Standardization is an important tool to cover aspects on safety, reliability, interoperability, and life-cycle analysis. It can also be a means to reduce costs in the supply chain and lower the environmental pressure on the offshore eco system. While several national, European (CEN/CENELEC) and international (ISO/IEC) standards are already available or under development it remains critical that gaps in standardization are addressed timely by the standardization committees in parallel with market developments.
The third part of the governance is how the processes of decision making within nations and across borders will be designed and followed. This with the challenge of extreme time pressure, uncertainty in energy markets and complexity in decision making. It appears that the relevance governance structures of the international transition exist with for example the OSPAR Commission, IMO (International Maritime Organization), North Sea Basin Taskforce (CCS) and strongly developing within the North Seas Energy Cooperation. Especially as the UK (after Brexit) and EU via NSEC are discussing a Memorandum of Understanding on this topic. For the integrated system on the North Sea this is highly essential given the good opportunities and high value for cross border connections. This governance structure also allows for aligning spatial planning and streamlining and accelerating project permitting. And can also be a platform for sharing best practices on new technology or cross border permitting.
On a national level the governance of the offshore transition is embedded in official planning processes, in this case dominantly in the Programma Noordzee, and stakeholder dialogue is embedded in the Noordzee Overleg (North Sea Dialogue) while best practice sharing between stakeholder is also embedded in the Community of Practice Multi Use Noordzee.
“Establish and align a legal and regulatory framework for the realisation, operation and decommissioning of new offshore energy initiatives.”
Economic stimuli and market development offshore system integration
At first appearance the offshore energy transition seems to be clear. Offshore wind will become the dominant source of energy and natural gas will fade over the next decades. Offshore there is also a role for other marine energy solutions and CO₂ transport and storage. The North Sea Energy programme results indicate that this offshore system is highly intertwined and decisions that affect one commodity affect also the market situation of other commodities. The pricing and thus income of project developers for electricity, hydrogen, methane and CO₂ (storage) are strongly related. Moreover, the North Sea Energy system is an international energy system and commodities markets are spanning countries.
This requires careful international alignment of the market framework (including stimuli or taxing regimes) for the above-mentioned commodities and their technologies. Otherwise, the disturbance of markets is very likely and level playing field will not be reached.
This is essential as the market for offshore wind relies on carefully managing merchant risks in the fast pace roll out of new capacity with enough electricity demand (e.g. direct or indirect via electrolysis) in parallel. For green hydrogen the market is still in its infancy and long-term stimulus packages need to be in place to de-risk this technology towards becoming fully commercial and bankable. The latter also holds (even more) for offshore hydrogen due to the various risks that need to be reduced from investor point of view on almost all important aspects: technology, regulatory, organisational and commercial (costs and markets).
For CCS the market needs support until the moment that the price of emission allowances (or tax) can carry the business case of the projects. Then again also a long-term signal of North Sea nations on the need and necessity of this technology and its role beyond storing CO₂ from fossil fuels is needed to secure private investments. Possibly with the need of support mechanisms.
What is hampering offshore system integration is the lack of long-term security for early high risk investments in early- or pre-commercial technologies. Supply and value chains need to be built and maintained at very high levels for the next decades and need to be secured for the region.
“Establish international clarity on long-term investment climate including market framework and related support schemes”
Technological improvements: scale-up and deployment
Currently, innovation processes are typically aimed at scaling-up of electrolyser technologies from multi MW scale to 100+ MW to 1 GW scale. Onshore 100 MW scale facilities and larger are under development. The novelty of applying this technology in offshore environments needs further demonstration of the complete process and specific attention to the desalination process; the corrosion resistance; the process flexibility; the design compactness; and the safety. In addition, industrial pilots (national or international) for larger-scale offshore hydrogen production (e.g., 10-20MW) must be realised and the integration of multi-sourced hydrogen production (e.g., wave, tidal and/or solar) should be investigated to that end. It is critical that the learnings onshore are translated and applied offshore within the next years.
In the North Sea many scale-up and deployment projects have been announced for offshore hydrogen. The benefit is that this covers already a breadth of technologies for offshore hydrogen (platform, island and (floating) wind turbine based). With an intensified collaboration between the North Sea countries a true portfolio of initiatives can be created that would benefit the countries and the private sector. This would improve the learning and de-risking of technologies, reduce the net cost of bringing technologies to maturity, aid in faster standardization and of the boundary conditions for technology implementation: technical, environmental, safety, market, financial, institutional and stakeholder perspectives.
The example is given for offshore hydrogen production but the same holds for other offshore system integration concepts as well. For platform electrification, offshore energy storage, offshore energy islands or structure designs and more there is no portfolio approach for the North Sea to share best practices and innovation learnings in the pre-competitive phase of these technologies or concepts. The North Sea region and the value chains of the system integration concepts would benefit from a North Sea offshore demonstration Flagship programme that aligns the national or regional innovation programs and sets clear goals for technology improvement, scale-up and deployment in appointed areas for pilot and demonstration projects. The current NSEC framework or the European Technology & Innovation Platforms as part of the Roadmap Strategic Energy Technology Plan (SET Plan) of the European Commissions could be good starting bases for such a Flagship programme.
“Set technology specific targets for offshore energy innovations for pilot and demonstration and (early commercial) full scale projects”
“Establish European portfolio approach of Research, Development & Deployment (RD&D) initiatives for offshore system integration pilots and demonstration programmes for cross-country and cross-sectoral learning: appoint demonstration areas for pilot and scale-up”
Minimize negative impacts and seek positive impacts on the ecosystem
While the North Sea is set to be the site of a massive build-out of energy assets, it also remains an ecologically sensitive area. Therefore, it is important to minimize the impact of disruptive activities and to actively pursue positive impacts on the environment surrounding the future energy system.
“The Ecosystem Agenda requires embedding ecological principles – of nature-inclusive design and multi-use of the environment – into the design of new offshore systems and establishing a robust North Sea Research and Monitoring Programme”
Ecological principles should be embodied and integrated into the energy system design instead of being looked at as a compliance-related matter. Nature-inclusive design and the use of best-available technologies should be combined with the multi-use of the limited space in the North Sea to minimize the negative impacts of development on the environment. A robust research and monitoring program must be established to study the environmental and ecological impacts of new offshore energy systems. Funding must be made available to establish this ‘North Sea Research and Monitoring Programme’ which would be based on the Plan-Do-Check-Act principle. Furthermore, better funding and financing options must be extended to projects with lower ecological impacts or positive environmental externalities. This can be done by embedding ESG (Environmental, Social, and Governance) into the evaluation criteria for financing. Lastly, standardization of offshore systems will also support the efforts to build with nature more effectively.
Collaboration, engagement, dissemination and communication
Effective collaboration, early stakeholder engagement, and strategic communication and dissemination are factors deciding the success or failure of the offshore energy transition. Apart from collaboration (instead of competition) between the direct stakeholders of the energy system, it is essential to engage with all relevant stakeholders spanning actors from public, private and civil society.
“Facilitate effective collaboration and early engagement with stakeholders by establishing a dissemination platform for the exchange of objective and independent knowledge”
Effective collaboration and stakeholder engagement are factors deciding the success or failure of the offshore energy transition. Apart from collaboration (instead of competition) between the direct stakeholders of the energy system, it is essential to engage with all relevant stakeholders spanning actors from the public, private and civil society. Engaging early and collaborating effectively can help in faster decision-making and avoid potential delays.
International collaboration and knowledge sharing between direct stakeholders can be strengthened by the establishment of a dissemination platform (by and for the experts on offshore energy system integration or those directly involved in the offshore energy system). Such collaboration can also help in addressing strategic challenges such as those related to spatial planning in the North Sea.
“The Communication Agenda involves bringing the offshore into people’s homes and minds to build public awareness and support for the offshore system integration”
Effective communication can establish the central role of the North Sea in our energy transition strategy. The goal of all communications should be to build public awareness and engagement on the build-up of an offshore energy system. The key message of the communication strategy should be to emphasize that the future energy system will be built on the principles of system integration which requires transition thinking: combining the ‘old’ fossil-fuel-based systems to establish the ‘new’ sustainable energy solutions. Further awareness should be raised on the benefits and costs of an integrated energy system vis-à-vis building individual systems. The offshore can become a part of public life and discourse through strategic tools like virtual reality (VR) tours of offshore systems, live streams, bird cams, and video/board games.
Human capital agenda
A skilled and motivated workforce is an essential pillar of the offshore energy transition. On the one hand, with the growth in the offshore energy sector, more and more jobs will be created and will require a pipeline of skilled workforce to be ready, and on the other hand, the declining fossil fuel production in the North Sea may create a difficult situation for skilled and experienced oil and gas workers. The situation is further complicated by the fact that Offshore is seen as ‘far away’ by the general public, not only geographically but also as a potential workplace and is often absent from the minds of workers looking for attractive job opportunities.
“The Human Capital Agenda requires the assessment of the medium- and long-term workforce needs and challenges faced by the future offshore energy sectors to develop a Human Capital strategy and action plan”
Therefore, better communication efforts need to be targeted at job seekers by emphasizing the excellent job prospects in the offshore energy sector. Since green jobs are not easy to outsource, they come with good job security and growth potential. Moreover, technical education should be made available to students from an earlier stage. Apart from attracting newer workers to the sector, significant efforts are needed to transition the existing oil and gas workers so that they remain relevant in a potentially decarbonized energy sector. This can be accomplished by training and retraining the workers with skills required for adjacent sectors. For instance, upskilling and reskilling oil and gas workers make them suited to work in the hydrogen, CCUS, and electricity sectors. Diversifying the skillsets of workers from one core area to multiple areas can also help them remain employable in a more integrated energy system. Lastly, the future workforce must be sensitized to the ecological implications of building a massive energy system in the North Sea and must be regularly trained by ecologists and marine biologists.