A port and fabrication yard in Scotland is planning to convert to green hydrogen as it looks to serve the carbon-conscious offshore wind sector.
Global Energy Group’s (GEG) Nigg Energy Park has a storied history serving the oil and gas sector. But now it's investing with offshore wind and other marine renewables in mind.
The park will serve as the marshaling, storage and logistics base for the 1,075-megawatt Seagreen offshore wind farm, being developed by SSE and co-owned by French oil major Total.
Now GEG is partnering with Iberdrola-owned Scottish Power to convert Nigg Energy Park to green hydrogen.
“So we've made a first step, [and] probably in 10 years’ time, everyone will be doing it,” Tim Cornelius, CEO of GEG, said in an interview. “There's a lot to be gained from being early adopters. That's what we're currently doing. And we're taking a lot of this on board as lessons learned. It’s not necessarily driven by economic feasibility; it's driven by a genuine want to be at the cutting edge of the 'greenification' of industrial processes."
The facilities at Nigg have already benefited from £90 million ($125 million) invested to upgrade its quayside facilities including larger cranes. The workshops that have fabricated large subsea structures for the oil and gas sector are a good fit to serve the offshore wind sector.
Cornelius adds that its workshops will have the capability to make wind towers that are 8 meters in diameter. The U.K.’s last constructed wind tower facility, also located in northern Scotland, is currently mothballed by South Korean owner CS Wind.
Green hydrogen on the ground
Although the facility is still going through a feasibility study, Cornelius said there is a “sweet spot” for an electrolyzer with 3 to 5 megawatts of capacity.
Fuel cells could be installed to replace diesel backup power. They could even become part of a primary energy source. Scottish Power will be able to provide power from its offshore wind projects. Cornelius said GEG is also talking to local landowners about potential solar deployment.
“We'll...work with Scottish Power to get the requisite power-purchase agreements in play. Ideally, we would love to benefit from a private wire connection,” Cornelius said.
Hydrogen could also be used to fuel equipment at on-site plants, such as forklift trucks and self-propelled modular transporters for carrying extremely heavy cargo. Green hydrogen could also be used for process heating, such as during the painting and curing of structures.
Quayside power supplies could also allow docked vessels to switch to low-carbon power, rather than using their own fossil-fuel supplies.
Less carbon, more local content
The delayed ScotWind seabed tender, which could support up to 10 gigawatts of capacity, will require developers to highlight their local content plans from the outset. Meanwhile, turbine manufacturers and developers alike are holding themselves to sustainability commitments that outstrip the Paris Agreement. Siemens Gamesa is already carbon-neutral. Vestas has a target to be carbon-neutral by 2030 without the use of offsets.
Having a supply-chain partner with a low-carbon footprint and less embedded carbon in its products is an attractive option. The offshore wind sector is increasingly aware of its environmental impact, said Cornelius. The other factor is what he describes as a “fear of legislation.”
There has been confusion around how binding the local content requirements in the U.K. will be. Unions and other parties want to see a 60 percent local content target, agreed between the sector and the U.K. government become binding. As jobs for offshore wind foundations have moved overseas, there have also been calls for the renewable contracts-for-difference auctions to integrate local content thresholds.
The ScotWind seabed tender requires a supply-chain plan with local content at its heart. The industry has received mixed messages on how those plans will impact lease awards. Speakers at a conference in Glasgow last year contradicted one another on how those plans would be used when judging bidders.
In both the contracts-for-difference auction and the ScotWind tender, the failure to meet local content rules would be “huge,” Cornelius said, putting capacity awards and seabed leases at risk.
Green hydrogen’s big uncertainty
While governments have been working hard to establish their countries as green hydrogen leaders, the public funding is flowing to projects looking to deploy electrolyzers for production. Demand will also need to be stimulated in other sectors.
Ben Gallagher, a senior analyst at Wood Mackenzie, recently told GTM that without new sources of demand for green hydrogen, other than converting the supply of existing users, the sector will head into a period of oversupply.
“It's a question of if these sectors that have not consumed [hydrogen] before will be able to accept low-carbon hydrogen,” he said. “That's the real question.”