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Offshore wind needs to clean up its O&M act – Part 3

As the wind industry moves further offshore, electrification of service vessels becomes more challenging. Can e-fuels or ‘drop-in’ solutions push diesel out of the O&M fleet’s fuel mix?

  • Electrification alone might not deliver the optimal solution for servicing remote North Sea wind farms
  • E-fuels such as green methanol pack a punch but are much more expensive, and government seems reluctant to bridge the cost gap
  • Drop-in fuels such as hydrogenated vegetable oil provide a stepping stone towards lower O&M emissions but bring their own challenges
  • Production of e-fuels for O&M vessels must be seen as a business opportunity for wind farms facing growing grid constraints and curtailment

What do ships and cars have in common? In the race to decarbonise road transportation, electric vehicles are winning out over hydrogen for light applications such as cars and small trucks. But electrifying heavy duty work vehicles is running into the constraints of today’s battery storage technology, leaving a space that could be filled by higher density zero-emission e-fuels such as hydrogen or e-methanol.

A similar situation is emerging with vessels used for offshore wind operations and maintenance (O&M). It makes sense to electrify the smaller crew transfer vessels (CTVs) that are used to service near-shore wind farms, since these boats are lighter and the scope of work is less onerous. But as the wind industry moves further offshore, O&M activities require larger service operation vessels (SOVs) that spend extended periods at sea. This is where the case for full electrification is less clear-cut, and e-fuels might potentially be better suited.

“The work scope of CTVs, which are used to service near-shore projects 10 nautical miles (nm) or less from shore, is manageable for a fully electrified vessel,” says Andy Page, managing director and naval architect at Chartwell Marine. “Their passage doesn’t require much energy and they might be servicing only three turbines per day. An electric vessel can achieve that.”

This would be the case for projects built in the early years of North Sea wind, such as Gunfleet Sands, Aberdeen Bay and Kentish Flats, which are all located less than 5 nm offshore. “Electrification is also a good option for other small boats such as survey vessels, dive support and guard vessels,” Page told E-FWD.

More sophisticated and robust O&M solutions with greater range are required to service larger projects such as East Anglia 3 and Dogger Bank, which are located 37 and 70 nm offshore, respectively. “As you demand more from the craft, you’re working the boats harder over longer passages and delivering extended services often in harsher seas.”

Vessels against the European Offshore Wind Deployment Centre in Aberdeen Bay. Source: Stillstrom

Page said that, while offshore charging infrastructure will enable electric SOVs to refuel at sea, the trade-offs of electrification will come to the fore as the work scope expands. Reliance on third party charging infrastructure might be sub-optimal for some vessel operators, and naval design becomes more important for tailoring bulkier e-vessels to the job at hand.

“You can get stuck in a negative design spiral,” says Kerrie Forster, CEO of the Workboat Association. The additional weight of larger battery packs required to power SOVs in turn necessitates hull reinforcements, which adds weight, requiring more batteries to haul and manoeuvre the vessel safely over the desired range. This adds more weight, requiring more reinforcements, and so on. “At some point you have to stop and draw a line,” Forster said.

The cost impact…can be reduced significantly if we are able to progress infrastructure, alternative fuels, their production and their availability as a collective – rather than the independent approach.

James Bradford, chief technology officer at North Star

Clean fuels that pack a punch

This is where e-fuels could play a role, either as complementary range-extenders in a hybrid system or as the primary fuel source. E-fuels, also referred to as electrofuels or synthetic fuels, are a category of energy carriers produced through Power-to-Liquid (PtL) or Power-to-Gas (PtG) processes.

Hydrogen is a key energy vector in the production of most e-fuels such as ammonia and e-methanol. Some North Sea wind projects are exploring the production of green hydrogen by extracting turbine electricity from behind the meter to power an offshore electrolyser.

The Nigg Oil Terminal in the Cromarty Firth, where plans have been mooted to create a methanol production facility. Source: Repsol Resources UK

The resultant green H2 could be used to directly fuel service vessels as compressed or liquid hydrogen (C-H2 and L-H2). Or it could be electrochemically reacted with carbon dioxide (CO2), captured from an industrial process or from the atmosphere, to produce e-methanol.

E-methanol, also known as green methanol or electro-methanol, is a front-runner candidate to replace diesel in heavy duty maritime operations such as SOV-based offshore wind O&M. Aside from being a net zero fuel, e-methanol produces fewer harmful air pollutants such as sulphur and nitrogen oxides (SOx and NOx), which future-proofs it against increasingly stringent environmental shipping regulations.

No silver bullet

There are several downsides to e-methanol. The fuel has a lower energy density than conventional fuels, requiring three times more space to store the same amount of weight. “This is manageable – it’s not horrendous,” says Page of Chartwell Marine. It can be stored at atmospheric pressure and, unlike ammonia, it is not particularly harmful to the environment or human health and so does not require special handling.

Transitioning to this fuel requires an initial investment in retrofitting or building vessels that can operate on this fuel. This might include adapting engines, fuel storage, and delivery systems, all of which could impact efficiency.

James Bradford, chief technology officer at UK vessel operator North Star, said the cost to adopt e-fuels is “significant”. He told E-FWD that “the increased cost to build or adapt the vessel to use methanol, its onboard management, crew training and the safety considerations that must be applied when bunkering” all add up over time.

An even bigger problem is one of physics. The production of green methanol (and other e-fuels) involves vast amounts of electricity, and the conversion losses are significant. Electrolyser efficiency ranges from 60% to 80%. Hydrogen compression or liquefaction has an efficiency of 85% to 90%. The efficiency of methanol synthesis processes can vary, but it’s generally around 60% to 70%.

When considered together, the overall efficiency of e-methanol from the point of electrolysis to combustion is approximately 33%, meaning that for every megawatt-hour of power extracted from a turbine to produce the fuel, only 333 kilowatt-hours of chemical energy are delivered to the engine. And that’s before you take into account the losses involved in combustion, which can waste as much two-thirds of the fuel’s energy content when converting chemical energy into kinetic energy for propulsion.

Visualisation of FlagshipONE – a 50,000 tonnes/year e-methanol project for shipping led by Orsted in Örnsköldsvik, Sweden.

High losses have two impacts on the attractiveness of e-methanol. One is the question of fuel availability: will there be enough fuel available when and where it is needed? The other is price: the heavy energy penalty of producing e-methanol means the cost is proportionally higher than conventional diesel-based fuels such as marine gas oil and fuel oil (MGO and MFO).

The obligation entailed by the CfD will be exposed to volatility on both ends – the reference price of current shipping fuel and the strike price of the zero-emission fuel. Unless there is a chain of offtake agreements from fuel producer to bunker supplier to shipper, the strike price cannot be fixed

Ian Foster, CEO of Marine Capital

Bridging the cost gap

The availability risk can be mitigated by adapting an e-methanol engine to run on diesel as a back-up. This involves engineering changes to the combustion process, fuel delivery systems, and engine control systems. Such modifications could impact the engine’s performance characteristics, emissions profiles, and maintenance requirements. These problems are manageable, but all incur extra costs.

Bridging the cost gap is tricky. Some have suggested a role for government support in the form of a Contract for Difference-style subsidy scheme to compensate the difference between the cost of a zero-emissions e-fuel and a reference price, such as a conventional marine bunker fuel. But this approach is problematic.

“CfDs work well when the renewable energy project has high upfront capital costs which are reasonably certain and low operational costs. However, suppliers of zero emission fuels will need to use renewable electricity to produce these fuels and so will be exposed to a variable operation cost element, which makes the whole project more uncertain for investors,” said Ian Foster, CEO of Marine Capital.

In offshore wind the government is the CfD counterparty, paying a fixed strike price against a variable reference price. For shipping fuel, the process would be “much more complex” as government funding would either have to be passed to a bunker supplier with an offtake agreement from a shipper, or direct to a vessel owner using the renewable fuel.

“The obligation entailed by the CfD will be exposed to volatility on both ends – the reference price of current shipping fuel and the strike price of the zero-emission fuel. Unless there is a chain of offtake agreements from fuel producer to bunker supplier to shipper, the strike price cannot be fixed,” Foster told E-FWD.

Slippery stepping stone

Bradford of North Star says there is no easy workaround to the problem of e-fuel cost sharing. North Star is using drop-in fuels such as hydrogenated vegetable oil (HVO) as a stepping stone before taking the plunge on engines adapted to run on e-methanol. But this too is three times more expensive than marine gas oil (MGO), and feedstock availability can be an issue.

HVO is a synthetic biofuel derived from hydrogenation, which is the process of adding hydrogen to vegetable oils or animal fats to transform these feedstocks into a fuel with properties similar to diesel. HVO can be produced from various renewable sources, such as used cooking oil, palm oil, or other vegetable oils. It can be used in existing diesel engines and infrastructure with little or no modification, making it an easy switch for existing diesel vessels.

However, “there are limitations within the infrastructure and the production process to supply in accordance with demand, so we view this as a short to medium term solution,” Bradford said.  North Star’s strategy involves the use of HVO to make progress against its own target to become a net zero company by 2040 and buy time while technology develops further to “eventually deliver sustainable solutions”.

Room for improvement

Some service vessel operators believe government will eventually need to intervene with the right mix of incentives to make e-fuel switching economic. But before that happens, there is also room for improvement in existing regulations. For example, vessels are allowed to burn MGO when docked at port tax-free. Grid power is taxed and levied, so the tax exemption is a subsidy for dirty fuels. Fiscal reform is needed to fix this.

For vessels themselves, government intervention already exists within the global fleet with EEXI (Energy Efficiency eXisting ship Index) and CII (Carbon Intensity Indexing). Bradford said these indexes require an overhaul to “level the playing field and pare out those entities that are paying lip service to the climatic challenge”.

“But with that said we need to be careful,” he added. “We need to ensure that we do not accelerate a plethora of stranded assets because of an inappropriately applied CII that could potentially demand capital investment or significant change within operational procedures to ensure compliance but (which) at the same time exacerbates contractual commitment and compliance.”

Where there’s a will…

An inescapable reality for offshore wind operators is that change is coming, and they will in due course be pressed to absorb higher day rates whether government support for green fuels materialises or not. 

Rather than sitting back and waiting for taxpayers to foot the bill, there is still a great deal of cost-cutting work for them to get stuck into today. Bradford sees collaboration and coordination of efforts as an effective means of reducing the cost burden implicit with decarbonising wind O&M.

“The cost impact … can be reduced significantly if we are able to progress infrastructure, alternative fuels, their production and their availability as a collective – rather than the independent approach that all too often has been (the) norm and an expectation from many that sit outside of our business realm,” he said.

Ultimately, however, “the client is in the driving seat” and their attitude change will play a major hand in determining the pace of progress – as will their ability to do so in the face of intense cost pressures.

Render of North Star’s hybrid propulsion SOV fleet.

“Wind farm developers and operators have a clear objective to drive down the cost of each kilowatt produced, therefore they are firmly focused on maximising asset utilisation and carbon efficiency at the lowest possible cost to them,” he said.

“Currently there are too many willing businesses that want to contribute towards the meaningful reduction in [emissions] but they are restricted from effectively doing so by the financial restraints imposed upon them by the cost of transitionary fuels or indeed technology, so overall our attitude to the challenge must change.

“I find it bizarre that the shipping industry in general is being chastised and pressed to move rather than encouraged to do so by appropriate incentives, after all, this is a global challenge, not just a shipping challenge,” Bradford said.

Envisioning a better future

Without government help and a collaborative pan-industry approach led from the front by project developers, change will occur unevenly and too slowly to meet corporate and regulatory targets. The North Sea offshore wind O&M fleet is slowly navigating towards a decarbonised future, but without enough fuel in the tank to get there under its own steam.

Perhaps what’s missing is a more visionary approach from developers. E-fuels are expensive today but wind’s role in producing them should be leveraged to offset the extra cost. 

Grid constraints mean that curtailment will grow in frequency and duration as generation capacity is expanded in remote North Sea locations. Therefore, the creation of secondary markets for derivatives such as ammonia, hydrogen and e-methanol must be baked into developers’ business plans.

Curtailed output provides a zero-cost feedstock, and the closed ecosystem of wind O&M vessels provides a ready-made consumer base. Maybe all that’s missing is a dash of commercial ingenuity to tie the two together.

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