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UK’s first ever CCS round will ‘kickstart next phase’ of industry

© Supplied by NSTACCS round

The UK’s first ever Carbon Capture and Storage (CCS) licensing round is just a week away, mooted by the regulator to “kickstart the next phase of this great industry”.

That was the proclamation from North Sea Transition Authority (NSTA) boss Andy Samuel at the Offshore Energies UK conference in May.

A total of 41 nominations arrived off the back of a call from the regulator, which closed on May 13, showing a “real sign of investor appetite” and great news for the supply chain, he declared.

On the UK itself, he said: “I don’t want to say unique, I don’t want to say world-leading, but certainly we’re up there. We have some great advantages.”

June 14th is the fast-approaching licensing round date and Samuel himself told the conference that the NSTA didn’t know which areas will be put forward yet as they’re working collaboratively with Crown Estate and Crown Estate Scotland.

That’s part of the reason operations director Scott Robertson and his team find themselves so busy.

“It’s a massive strategic priority. We as the licensing authority have got a key role in helping the government to meet its net zero ambitions and CCUS has a big role to play in that.”

With 54 people in the directorate, a quarter of them are involved in CCUS in some form or another, he reports.

“It is occupying many of my people full-time. It’s not a small activity now, it is a large piece of work.”

UK CCS © Supplied by NSTA
NSTA operations director Scott Robertson

The need for getting acreage into the hands of investors is clear; some 2,000 large scale sites are needed globally in order to meet Paris Climate Targets, according to the Global CCUS Institute, and the world is currently sitting at less than 10% of that.

That’s why we’re “moving at pace with an offering on CCUS licence acreage,” Robertson said.

With the nominations window recently closing with sizeable interest, the new licensing round is “moving away from ad hoc and moving into scale”.

“The other benefit of the round is you get this right assets, right hands. You get the best-qualified bids, the most competent, the most financially sound.

“We’re certainly doing what we can to get the UK in a place where it can compete.

“All we can do is provide the conditions to allow the UK sector to compete and I think we’re absolutely doing that by getting more licences out there”.

The new licensing round will arrive nearly five months to the day since a massive 25 GW of projects were awarded for ScotWind.

Unlike wind farms, CCUS facilities don’t take up a lot of acreage but they do require space for monitoring and measurement throughout the life of the store.

Between acreage for the waves of new turbines to be installed, space for CCS and oil and gas, then, the North Sea is becoming very busy.

Signs have been showing, such as the conflict between Orsted’s Hornsea 4 wind farm and BP’s East Coast CCUS cluster, on projects needing to compete for space.

Robertson said: “We’re almost daily talking to Crown Estate and Crown Estate Scotland to ensure that we are using the North Sea, which is becoming a crowded place, and doing that spatial planning.

“For each of these applications we do talk to them to ensure we’re not talking at odds on the same area.”

It’s a relatively new thing for regulators to have to integrate in such a fashion, though Robertson reports that the NSTA has been in close talks with counterparties like Crown Estate Scotland for the last year or so.

Regulators are going to have to get even cosier when it comes to new oil and gas projects, with the British Energy Security Strategy

Westminster said it would establish “Gas and Oil New Project Regulatory Accelerators (GONPRA)” to provide “dedicated, named project support” and bring “rapid development” of these schemes.

© Supplied by Offshore Energies UK
NSTA chief executive Andy Samuel said the round will “kickstart” the next phase of industry.

On that front, Robertson said: “We’re already active. We’re working with OPRED to look at the FDP (field development plan) EIA (environmental impact assessment) process to see where we can remove regulatory stickiness and be more efficient between the two of us.

“It’s always something the NSTA has done, we talk to operators very early on their concepts because it is more efficient for us to get involved at concept stage than it is to just wait for an FDP.

“What we’ve now done though is we’re involving OPRED at concept select and there are meetings happening with NSTA, OPRED and the operators in relation to some early conceptual projects.

“I would say those things are a good summary of what we’re already doing under the GONPRA banner to remove inefficiencies and improve the communication.”

Until last week, there had been regulatory “stickiness” on Shell’s Jackdaw gas project, going back and forth over the course of months with OPRED on its proposals.

Shell wants to tie Jackdaw back to Shearwater, rather than Harbour Energy’s Judy installation, arguing the case for electrification at Shearwater as well as its link to the Acorn CCS project at St Fergus as key justifiers.

The field was finally approved on Wednesday.

But to what extent can CCS more broadly help new oil and gas projects meet regulatory hurdles?

“There may be linkage in some, but it doesn’t always mean that the case that there is linkage.

“Obviously CCS is there to serve a much wider set of customers than just an oil and gas field, they are predominantly aimed at decarbonising industrial clusters.

“I guess where the linkage is, looking at the Bacton Energy Hub, it’s about if you have a blue hydrogen element in your concept then you need a gas supply to be able to generate your blue hydrogen.

“Obviously that’s part of Acorn’s concept, it’s part of the Bacton concept, so there is some linkage but you’ve got other schemes where gas is not part of the concept, it’s more about decarbonising industrial green hydrogen.”

 

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