Weekly News Review - 24th March 2023
Plans for new UK-Norway interconnector rejected by Norwegian government
A proposed 1.4GW interconnector between Norway and the UK has been put on hold following the Norwegian government’s decision to refuse its license application. The £1.5bn NorthConnect project would see a 650km interconnector developed between Peterhead in Scotland and Simadalen in Norway.
However, the license was refused by the Norwegian Ministry of Petroleum and Energy who highlighted concerns over security of supply in Norway, particularly following the Russian invasion of Ukraine. The decision was made despite the Norwegian Water Resources and Energy Directorate (NVE) having previously considered the project as socio-economically profitable.
Oil and Energy Minister, Terje Aasland, said: “It is important for the government to ensure that we have a power system that meets the basic objectives of power supply at all times. We need the output capacity in hydropower and will not expose it to further export. In my opinion, the consequences of establishing a new overseas cable indicate that a license will not be granted for the project.”
Research and Higher Education Minister, Ola Borten Moe, added: “We need to use Norwegian energy to build Norwegian industry and contribute to competitive prices in Norway. The experience gained from the last two foreign cables indicates that we should not plan for further exports now. That is why we say no to this private foreign cable.”
The UK already has one interconnector link with Norway, the 1.4GW North Sea Link which was completed in October 2021. The interconnector is mainly used to transport excess Norwegian hydropower to the UK. However, there were concerns last summer over low reservoir levels and the effect a prolonged period of dry weather would have on exports.
In August, Mr Aasland said: “One solution we are working on is that when the levels, particularly in multi-year reservoirs, fall below the seasonal norm, exports will be limited accordingly or in relationship to this. Our job is to ensure that we have security of supply in Norway. It is completely legitimate, it is a matter of national interest and the government’s responsibility.”
North Sea oil and gas workers vote to strike amid bumper profits
North Sea oil and gas workers have voted in favour of a series of large-scale strikes as part of a dispute over jobs, pay and conditions. Around 1,400 workers plan to strike between late March and early June, which could lead to disruption at some platforms in the region.
The strike action has been coordinated by the Unite union and will involve workers from Bilfinger UK, Stork, Petrofac, Wood and Sparrows Group. The contractors work on oil and gas platforms operated by BP, EnQuest, Harbour Energy, Shell and Total which have announced combined profits of around £146bn in 2022.
This has led to increased calls for a tougher windfall tax and for better pay for employees. Unite general secretary Sharon Graham said: “Oil and gas companies have been given free rein to enjoy massive windfall profits in the North Sea; drilling concessions are effectively licences to print money.”
“1,400 offshore workers are now set to take strike action against these employers who are raking it but refusing to give them a fair share of the pie. This will create a tsunami of industrial unrest in the offshore sector. Unite will support these members every step of the way in their fight for better jobs, pay and conditions.”
John Boland, Unite industrial officer, added: “Unite has received unprecedented support in favour of industrial action in the UK Continental Shelf. It is the biggest mandate we have received in a generation in the offshore sector. There is no doubt that this is directly linked to oil and gas companies reaping record profits while the workforce gets scraps from the table.
“Unite’s members are angry at the corporate greed being shown by offshore operators and contractors. Now these major global companies are set to face the consequences as dozens of offshore platforms will be brought to a standstill in a matter of weeks.”
Drax pauses UK BECCS investment
Drax has put its investment programme into the bioenergy with carbon capture and storage (BECCS) project at Drax Power Station on hold until it receives clarity from the government. Drax has said that it needs its BECCS project to gain Track 1 status otherwise the power station “may become unviable and unable to contribute secure power at a time of such critical need”.
Drax’s 2.6GW power station in Yorkshire is currently the largest provider of dispatchable power to the GB electricity system and can provide up to 11% of the country’s demand. According to research from Baringa the loss of the biomass units would reduce total capacity to 80% of peak demand. This would increase reliance on gas and electricity imports, which subsequently increases the cost for consumers.
Drax CEO Will Gardiner said: “Whilst we welcome the Government’s ambition to invest billions in carbon capture and storage, we need a firm commitment to BECCS before we commit to investing £2bn into installing this technology at Drax Power Station.”
“Until we have this clarity, we are pausing our multi-million pound investment programme in the UK BECCS project and urge Government to use the planned announcement at the end of the month to outline their support for this. Any further delays to this project could impact the UK’s security of supply, net zero and levelling-up ambitions and the viability of Drax Power Station.”
A Department for Energy Security and Net Zero spokesperson said: “We are committed to reducing our carbon emissions and achieving energy security – and carbon capture has a significant role to play in getting us there. The Chancellor has provided an unprecedented £20 billion investment to develop this new capability and we will announce the first round of successful applications later this month.”
“We will publish the Biomass Strategy in 2023 which will set out further details on the government’s views on how biomass can best contribute towards net zero and our energy security.”
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