Register for a free trial
Social

Understanding decommissioning can help reduce the cost of energy

Thu 29 Jun 2017

Understanding decommissioning can help reduce the cost of energy
The offshore wind industry can benefit from experience in the oil and gas sector, despite the differences between the two

In the offshore oil and gas industry, decommissioning is in focus as massive structures such as Shell’s Brent topsides begin to be brought ashore – a similar level of focus in the offshore wind industry could help reduce the cost of energy

 

As noted recently in our sister publication Offshore Support Journal, the cost of decommissioning oil and gas infrastructure is a major issue. In the offshore oil and gas industry, greater co-operation to share good practice, lessons learned and decommissioning campaign management is needed to bring costs down. Cost reductions of around 35 per cent are being targeted. Operators need to look for synergies with other energy industries, it is said, and new technology and different working practices will be required to make the most expensive parts of decommissioning less expensive.

The offshore wind industry won’t have to deal with some of the high cost aspects of decommissioning an oil field – such as plugging and abandoning infrastructure in which hydrocarbons are involved – but as a number of poster presentations at Offshore Wind Energy 2017 highlighted, the industry needs to begin to focus on decommissioning now if costs aren’t to escalate later.

As experts from DNV GL told the conference, from the early stages of designing marine structures, decommissioning should be considered in order to minimise the impact on lifetime costs. Prudent consideration of end-of-life costs during the design and operation phases and the efficient execution of the decommissioning phase when it comes can reduce the cost of energy, and liability can be reduced. Similarly, owners of existing offshore windfarms need to make cost-efficient decisions regarding life extension, late-life operation and ultimately decommissioning and removal.

If you think that decommissioning isn’t an issue for the offshore wind industry yet, think again. A handful of projects have been dismantled in the last two years (such as Yttre Stengrund, Lely and elements of others), and others are approaching the end of their design lives. 

As DNV GL pointed out, decommissioning in the offshore oil and gas sector began more than 30 years ago, and a large body of experience and specialised techniques has been developed and continues to evolve. With care, the offshore wind sector can benefit greatly from this extensive experience whilst keeping aware of distinct differences between the two sectors.

At a high level, the main similarities with offshore oil and gas structures are the range of foundation types (jackets, piles, gravity base, suction buckets) and the site conditions. Much knowledge is transferable, says DNV GL, but there are significant differences between the two sectors arising primarily from the much greater risks of pollution and environmental impact with oil and gas installations, requiring much greater consideration during dismantling and removal, and also from the scale and numbers, whereby windfarms comprise multiple installations that are essentially identical compared with the single complex entity at an oil installation. 

The oil and gas industry has also made advances in subsea cutting technologies, in remotely operated subsea vehicles and in heavy-lift vessels to serve the needs of decommissioning. Developments needed for offshore wind include cutting techniques for the largest monopiles, and alternative techniques such as vibro-removal may be embraced if complete foundation removal is desired.

“In terms of planning ahead, ease of decommissioning should be built into the design, such as breaking down large structures into modules or releasable joints,” says DNV GL. “Throughout the lifetime, structural changes need to be recorded in detail. The marine logistics during decommissioning need careful optimisation as costs are particularly sensitive to the use of expensive specialised vessels. 

“Without considering decommissioning at all stages in the life of an offshore wind project, the overall cost of energy may be higher than necessary. The offshore oil and gas industry has learned pertinent lessons in the need to plan years ahead before cessation of production and preferably at the design stage. It has developed techniques and methodologies in certain key areas. For offshore wind, these methods need to be supplemented by enhanced and new techniques. Optimisation of marine operations is essential, for example, taking advantage of the programme nature and scale, working with multiple vessels and recognising their major contribution to the overall costs.”

Experts at NIRAS in Denmark say they agree that there is a need in the offshore wind energy industry to gain a greater understanding of decommissioning. “Planning for decommissioning can reduce the cost of energy,” said Johan Finsteen Gjoedvad and Morten Dallov Ibsen from NIRAS in a poster presentation at Offshore Wind Energy 2017. “It is important to address it as early as possible, even during the de-risking or design phase.” They note that other industries – such as offshore oil and gas – have failed to seriously assess the cost of decommissioning “and have been surprised with the actual cost”.

In 2014, NIRAS initiated the ODIN-WIND project, the aim of which is to develop a model and management tool for the decommissioning process. The project also includes tools for estimating the remaining lifetime of an offshore windfarm and provides a best-practice guide for decommissioning windfarms. The project is being undertaken in collaboration with the Danish Energy Agency, Maersk Broker, Vattenfall, Dong Energy, DTU Energy and TWI. It is due to be completed in mid-2017. 

“ODIN-WIND has made it possible for NIRAS to assist clients on offshore wind projects in regards to decommissioning,” the authors of the presentation explained, “including projects’ initial feasibility, due diligence and evaluating windfarms for decommissioning.”

The ODIN-WIND tool assesses decommissioning requirements through a detailed analysis of actual methods, logistics, environmental issues, legislation and weather models. Cost estimates of capex are produced. This is in contrast to the more conventional viewpoint of reverse engineering and assessment of cost as a multiple of installation costs.

The ODIN-WIND approach has been applied in the different phases during which decommissioning can be addressed: feasibility, design phase, due diligence and actual decommissioning. Relevant techniques and data have been collected from partners and experts. The tool supports the development of a decommissioning strategy, which is used for decommissioning by design during the design phase. The decommissioning strategy is updated continuously through the lifespan of an offshore windfarm, including commissioning and O&M.

NIRAS says the ODIN-WIND approach has proved to be more accurate than conventional approaches to decommissioning. “The detailed and accurate estimates that ODIN-WIND provides are due to the fact that economic contingencies are replaced with actual costs based on actual methods,” said NIRAS, noting that it can also help reduce costs and the cost of energy because the owner of a windfarm can allocate funds for decommissioning that are accurate. It says the cost of energy is further reduced because ODIN-WIND enables interaction between designers of offshore wind structures and entities that are active in the O&M phase.

“The benefit of addressing decommissioning early in the design phase is clear and is directly linked to reducing the cost of decommissioning,” NIRAS concluded. “Optimisation of decommissioning assists in reducing environmental impact, reduces the use of resources and promotes a circular economy. ODIN-WIND can guide asset owners through the different phases of a project and provide input to end-of-life estimation and re-powering considerations and provide the basis for an environmental impact assessment.”

Experience with met masts proves the point

Another poster presentation at Offshore Wind Energy 2017 from Emilie Reeve, Dan Kyle-Spearman and Jan Matthiesen at the Carbon Trust noted that more and more met masts and early-installed windfarms are being decommissioned at extremely high costs.

The Carbon Trust has undertaken a study reviewing the costs, barriers and opportunities of decommissioning. The conclusion was that the supply chain is not prepared for offshore wind decommissioning and there is no fit-for-purpose technology so the costs are extremely high.

It noted that decommissioning activities will continue to increase in the next 10–15 years, and there is an opportunity to develop the appropriate tools and methodologies to support future large-scale decommissioning activities. However, this needs to be started now in order to ensure the tools are sufficiently developed and tested.

A study undertaken by the Carbon Trust demonstrated that the industry will start seeing larger-scale decommissioning within the next 10–15 years. At present, it’s expected that the costs of decommissioning would be equivalent to approximately 65–70 per cent of installation costs, which is excessive. Through discussions with developers and industry, the Carbon Trust has identified the opportunity for innovation to considerably decrease the cost of decommissioning, largely by reducing the dependency on a costly heavy-lift vessel. However, these innovations will need to be developed, trialled and tested in advance of the large-scale decommissioning activity in order to achieve the necessary cost reduction. “Decommissioning needs to be considered now, in order to ensure the industry doesn’t pay excessive costs later,” said the Carbon Trust.