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Europe Energy Review

Europe Energy Review


By Tsvetana Paraskova

Rising natural gas prices in Europe due to tighter supply amid maintenance, UK reforms to accelerate the clean energy rollout, and a number of clean energy new projects featured in Europe’s energy industry over the past month.

Oil & Gas

Europe’s benchmark natural gas prices at the TTF hub in the Netherlands started rising in June, from two-year lows seen for the most of May, as maintenance and outages at Norwegian gas processing facilities tightened supply amid warmer than usual weather in many parts in northwest Europe.

Issues at Norway’s Hammerfest LNG export terminal and maintenance at the gas processing plants in Nyhamna and Kollsnes lowered gas flows to Europe, adding to maintenance on the Oseberg field offshore Norway which was also reducing supply and contributing to higher prices.

After Russia stopped gas deliveries to many EU customers following the Russian invasion of Ukraine, Norway is now the single-largest supplier of gas to Europe.

At the end of May, Equinor said the gas leak that occurred at the Hammerfest LNG plant at Melkøya on 31 May had been stopped and normalisation was under way. The first LNG cargo loaded fuel at the Hammerfest facility during the weekend of 17-18 June after the restart on 14 June.

Separately, Equinor signed later in June a 15-year purchase agreement with Cheniere, doubling the volumes of LNG that Equinor will export out of Cheniere’s LNG terminals on the U.S. Gulf coast.

“Europe will need natural gas to ensure flexible energy on demand to support the build-out of more intermittent renewables and LNG will play an important role,” said Helge Haugane, Equinor’s senior vice president for Gas & Power.

“Equinor has an ambition to strengthen its role as a leading supplier of natural gas and with our supply agreements with Cheniere we are expanding our global position.”

Low-Carbon Energy

In low-carbon energy, The Crown Estate has started work to digitally map the seabed resource needed to meet future demand. In collaboration with a wide range of organisations which have a role to play offshore, The Crown Estate is building an integrated, spatial analysis platform which will consider: existing and future demands on the seabed out to 2050; geographical constraints for all key offshore sectors; existing infrastructure; and environmental designations and future resource requirements for environmental habitats and nature recovery.

The UK’s National Grid ESO has introduced targeted further reforms to speed up connections to the electricity grid by up to 10 years. National Grid and Ofgem are working to more effectively manage the queue of connections to the grid.

There are around 220 projects due to connect to the national transmission system before 2026, totalling some 40 gigawatts (GW), equal to more than double peak demand in the summer months for all of Great Britain. However, only half of these have got planning consent at this stage and some have moved their connection dates back by over fourteen years, National Grid noted.

“This announcement is a significant step forward, as it will unlock new clean energy capacity faster by letting projects which are ready to connect to the grid move ahead of projects that simply aren’t making progress,” RenewableUK’s Director of Future Electricity Systems, Barnaby Wharton, said, commenting on National Grid’s proposed reform.

The UK government gave Ofgem a statutory net zero duty to prioritise the UK's 2050 net zero target.

“We’re laying the foundations for the energy system of the future. The net zero mandate has overwhelming backing from every part of the energy industry, consumer campaigners and climate activists,” Ofgem CEO Jonathan Brearley said.

RenewableUK’s Wharton commented, “This measure will help to unlock at least £15 billion of investment in offshore wind alone between now and the end of the decade.”

RenewableUK’s latest EnergyPulse market intelligence data report shows that the UK’s pipeline of offshore wind projects has reached 97,944 MW, up from 91,287 MW a year ago. The UK total pipeline was second globally at 98 GW, second only to China with 157 GW, followed by the US in third place with 82 GW, Sweden is fourth with 75 MW, and Brazil fifth with 63 GW, according to the report.

The Scottish Government’s Minister for Energy and the Environment, Gillian Martin, highlighted the economic opportunities offered by floating offshore wind at RenewableUK’s Global Offshore Wind 2023 conference in the middle of June.

“Crucially we cannot deliver our ambition for floating offshore wind without a supply chain that’s fit for purpose, so an early priority will be investment in ports and harbours,” the minister noted.

A report by the Offshore Wind Industry Council (OWIC) showed a significant increase in jobs in the offshore wind sector is required by 2030, with forecast jobs exceeding 100,000 for the first time, compared to over 32,000 jobs today.

In the short-to-medium term, job numbers need to grow rapidly as several offshore wind farms progress to the construction phase – 88,509 jobs are forecast to be required by 2026, which is over 56,000 more than today’s workforce, according to the report.

In Norway, the government proposes to open parts of the Norwegian Continental Shelf for commercial seabed mineral activities.

“Currently, the resources are controlled by a few countries, which makes us vulnerable. Seabed minerals can become a source of access to essential metals, and no other country is better positioned to take the lead in managing such resources sustainably and responsibly,” Norway’s Minister of Petroleum and Energy, Terje Aasland, said.

In Spain, renewable power is expected to generate more than 50 percent of electricity in 2023, which will make the country the first of the top five European economies by power demand to accomplish this feat, according to Rystad Energy forecasts.

Spain will reach this significant decarbonisation milestone this year, with renewable-sourced generation surpassing the 50-percent average and beating France, Germany, Italy, and the UK to this record, Rystad Energy noted in a report in early June.

In company and project news, Boom Power is set to begin work developing a proposal for a new solar farm in Fenwick, north of Doncaster. The Fenwick Solar Farm will have a generation capacity of up to 237.5 MW, enough to power around 60,000 homes per year. Boom Power plans to start consulting with local stakeholders and residents, before making an application to the Planning Inspectorate for approval to begin construction of the solar farm.

SSEN Transmission will invest £10 billion in networks to enable connection of up to 11 GW of ScotWind offshore wind projects. The capacity would be enough to power more than ten million homes in the UK, while the investment will support 20,000 jobs across the UK, including 9,000 in Scotland.

Alcemi have received planning permission for a 500 MW energy storage facility in Coalburn, Scotland. The facility, developed in partnership with Copenhagen Infrastructure Partners, will store renewable energy during periods of excess generation, releasing it back into the system during periods of peak demand. The project is expected to prevent around 1.6 million tonnes of CO2 emissions over 35 years.

The Investment Management Corporation of Ontario (IMCO) is investing US$400 million in Northvolt AB to enable the battery maker’s planned expansion. Northvolt's first gigafactory in northern Sweden has already begun producing batteries using fossil-free electricity. Future gigafactory additions will support Northvolt's goal of delivering 150 GWh of annual production capacity by 2030.

Portuguese energy firm Galp and France’s supermajor TotalEnergies have agreed to jointly explore potential offshore wind opportunities in Portugal. The country has an ambition to promote the development of 10 GW of offshore wind capacity, opening a range of opportunities given its wide coastline with favourable weather conditions and the existing industrial infrastructure.

“Offshore wind energy will strengthen TotalEnergies' renewable activities in Portugal where we have a total portfolio of more than 1 GW of solar and wind projects in operation or under development,” said Olivier Terneaud, VP Offshore Wind at TotalEnergies.

TotalEnergies has also signed a 100 GWh biomethane purchase agreement with Saint-Gobain France for three years starting in 2024. The biomethane will be produced by TotalEnergies at its BioBéarn biomethane plant, which came on stream at the beginning of 2023 and whose production is certified sustainable by International Sustainability & Carbon Certification (ISCC) under the highest sustainability criteria of the European Union REDII Directive.

Germany’s RWE plans to invest more than 50 billion euros gross in the energy transition by 2030 as part of its ‘Growing Green’ investment and growth strategy. RWE will focus on its core businesses of expansion of renewables, battery storage technologies, carbon-free backup capacities, and ramping-up the hydrogen economy.

Read the latest issue of the OGV Energy magazine HERE

Published: 06-07-2023

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