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Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

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The Next Big Development In Offshore Oil & Gas

Siemens last week announced the launch of the first hybrid power plant for offshore rigs combined with energy storage featuring lithium-ion batteries. The company first unveiled the Blue Vault power supply and storage system in May this year in yet another sign of its growing focus on energy storage at just the right time.

As the oil and gas industry has become the favorite punching bag of the environmentally conscious, sector players have scrambled to find ways to relieve the pressure at least partially. This has combined nicely with the cost-cutting drive that followed the 2014 oil price collapse to produce various tech solutions that offer both lower emissions and lower costs for this or that.

In the case of Blue Vault, Siemens said the system could reduce a rig’s fuel consumption by 12 percent with carbon dioxide emissions down by 15 percent. The battery storage part has a maximum power of 6 MW. The whole installation will supply power to the West Mira rig, which is deployed at the Nova Field and operated by Seadrill on behalf of Northern Drilling. According to Siemens, the West Mira rig is the first to benefit from a hybrid power supply system that will reduce the runtime of the diesel engines on the platform, which will in turn reduce the rig’s emissions by an amount equivalent to the annual emissions of 10,000 cars.

That’s pretty impressive, and what’s more, it’s already been tried and tested, just not on drilling rigs but on vessels-- 60 of them. And Siemens has great expectations for the future, too.

"We expect this market to grow significantly, and consequently have invested heavily in the development of safe and reliable ESS solutions by establishing a production facility for battery modules in Trondheim, Norway," said Siemens’ offshore solutions chief, Bjørn Einar Brath.

The facility Brath mentioned in the Blue Vault release cost Siemens US$12 million (10.5 million euro) and involved moving an already existing business to Norway to take advantage of cheap and abundant renewable power as well as generous subsidies for the transport electrification sector. Related: The Solar Tech Flying Under The Radar

In further evidence of Siemens’ bet on batteries and energy storage, the German concern became one of the financial backers of Swedish Northvolt’s project for the first gigafactory to be built in Europe. Siemens pledged US$11.44 million (10 million euro) for the project that would aim to reduce European carmakers—and other manufacturers—dependence on imported batteries that are making some in the auto industry quite nervous.

The project, although some believe it is late in coming, anticipates in increase in battery demand in Europe to 200 GWh by 2025, with the market swelling to some US$286 billion (250 billion euro) annually, according to estimates from the European Commission. Northvolt’s project will cost at least US$4.57 billion (4 billion euro), which the Swedish firm plans to raise from various sources.

In its drive to secure a prominent place in the emerging energy storage industry, Siemens also last year inked a partnership with AES that would exclusively focus on battery storage systems. The development and deployment of the Blue Vault system in the North Sea is just one of the results of this drive by one of Europe’s largest technology concerns and a clear sign that we might be witnessing the beginning of a new era, the battery era.

By Irina Slav for Oilprice.com

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  • Frank on December 10 2018 said:
    Not a bad strategy. When a far superior product is disrupting your industry and supply constrained, taking up some supply ain't a terrible idea!

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