webvic-b

Energy Transition

Geothermal energy is fast gaining traction as a important source of renewable energy. (Image source: Synergy Consulting)

Synergy Consulting discusses the potential of geothermal energy

Geothermal energy is fast gaining traction as a important source of renewable energy, harnessed from the immense heat stored beneath the Earth’s surface. This heat, originating from the planet’s core, is generated by the decay of radioactive materials and the residual energy left from the Earth's formation over four billion years ago. This geothermal energy that lies within the Earth’s crust can then be tapped to produce electricity or used directly for heating purposes, offering a clean and reliable power source.

Located roughly 2,900 km below Earth’s crust, the core is the hottest part of the planet. Although some of the core’s heat is residual from Earth's formation, the majority is continuously produced by the natural decay of radioactive isotopes like potassium-40 and thorium-232. This process sustains geothermal heat as a renewable resource.

When underground rock formations are heated to extreme temperatures of 700-1,300°C (1,300-2,400°F), they can become magma -– molten rock filled with gas bubbles. Magma exists deep in the Earth’s mantle and lower crust, sometimes rising to the surface as lava. This magma heats nearby rocks and underground water reservoirs, which can be released through natural outlets such as geysers, hot springs, and steam vents.

Geothermal power plants

Geothermal power plants are built on this principle and capitalise on the natural heat by using steam or hot water reservoirs beneath the Earth’s surface to drive turbines connected to electricity generators. In some cases, water is injected into the ground to be heated and brought back to the surface for energy production. This process is not only efficient but also relatively low in emissions compared to fossil fuel-based energy sources.

While still a niche technology, geothermal energy already plays a substantial role in power generation for several countries. Iceland, El Salvador, New Zealand, Kenya, and the Philippines rely heavily on geothermal energy to meet their energy needs. The United States has also been a long-standing pioneer in this field, with its first geothermal district heating system established in 1892 in Boise, Idaho. This system still provides heat to hundreds of homes over a century later.

In 2022, geothermal energy generated approximately 92bn kilowatt-hours (kWh) of electricity across 24 countries, according to the International Energy Agency (IEA). The European Commission notes that deep-geothermal energy has the highest capacity factor among renewable sources, exceeding 80%. This high efficiency makes geothermal a highly scalable option for industrial-scale energy production. Projections from the IEA’s Sustainable Development Scenario anticipate that global geothermal power will triple by 2030, from 92 terawatt-hours (TWh) in 2019 to 282 TWh.

As the world faces increasing demand for energy, geothermal power offers a reliable, clean, and efficient way to augment traditional energy sources. With its high potential for scalability, it could play a crucial role in meeting global energy needs while reducing dependence on fossil fuels.

This article is authored by Synergy Consulting IFA.

The majority of signatories are pursuing investments in new energies. (Image source: Adobe Stock)

The majority of signatories to the Oil & Gas Decarbonization Charter (OGDC) are on track to meet its goals, according to a progress report

The Oil & Gas Decarbonization Charter (OGDC) is one of the landmark initiatives launched at COP28, with objectives including net zero operations by 2050, and reduction of methane emissions to near zero and the elimination of flaring by 2030. 54 oil and gas companies - representing almost 45% of global oil production, have signed up to the Charter.

In the past 12 months, OGDC has established a governance framework and launched a survey to determine signatories’ emissions reduction ambitions and implementation plans to set a baseline to track future progress.

OGDC has also implemented a Collaborate & Share program to disseminate solutions, promote peer-to-peer collaboration and encourage the adoption of best practices to reduce emissions. The initiative has also attracted three new members, with Oil India Limited, PetroChina and Vår Energi joining.

“We are proud of the 54 companies that have already signed up to the Charter and are encouraged by the extent of their engagement in this first major piece of work that helps to establish a base on which to build future success,” said OGDC’s three CEO Champions and founding members – Abu Dhabi National Oil Company (ADNOC) CEO Sultan Al Jaber, Aramco CEO Amin Nasser and TotalEnergies chairman and CEO Patrick Pouyanné, in a joint statement.

Investing in future energies

According to the survey, most of the signatories are already investing in future energies, including renewable energy, energy storage, low-carbon fuels, hydrogen, methane abatement, carbon capture utilisation and storage (CCUS) and carbon removals technologies, and plan to increase investments.

Bjorn Otto Sverdrup, the head of the OGDC Secretariat said: “A survey of oil and gas industry climate performance has never been attempted on this scale. Participants ranged from companies that pioneered decarbonisation decades ago to those still in the early phases – all with different capabilities and reporting methods. The lessons learned will be used to improve reporting visibility and data quality and to create more targeted programs.”

Over the next year, OGDC will focus on providing the resources and guidance the signatories need to reduce their GHG emissions, methane emissions and flaring. OGDC will also help signatories to shape their net-zero roadmaps and develop emissions reporting to ensure progress can be tracked and to demonstrate how collective action can deliver positive climate impact on a global scale.

AI will play a crucial role in accelerating the pace and scale of this transformation. (Image source: Alain Charles Publishing)

The energy transition is a critical challenge facing the world, and as discussions at this year's ADIPEC conference have highlighted, artificial intelligence (AI) is poised to play a pivotal role in driving this transformation.

In a captivating session, Andrew Smart, the senior managing director from Accenture, introduced the distinguished Dr. Anima Anandkumar, a Bren professor of Computing at the California Institute of Technology. Dr. Anima's work at the forefront of physics-informed AI has yielded groundbreaking advancements in the energy sector.

As Dr. Anima explained, "One cannot exist without the other - the two-faceted energy for AI, AI for energy is really perfect."

Her research has focused on bridging the gap between the digital and physical worlds, leveraging AI to accelerate solutions in areas like weather forecasting, carbon sequestration, and nuclear fusion.

A holistic approach

"AI is clearly accelerating by a huge margin what could be done with traditional numerical methods," Dr. Anima noted, highlighting how her team's AI-based weather model is 10,000 times faster than conventional approaches. This enables more robust probabilistic forecasting of extreme weather events, a critical capability as the world grapples with the impacts of climate change.

Andrew Smart emphasised the importance of this work, stating, "When we think about the energy transition, two major works continue to come to mind: pace and scale. It's well established that science has many of the answers, but in order to accelerate and to scale, this is really where we're hoping and expecting AI to play this pivotal role."

Dr. Anima's vision extends beyond weather modelling, as she shared examples of using AI to optimise carbon sequestration and nuclear fusion reactor design - both essential components of the energy transition. "Thinking of both traditional energy sources, making all of those processes more efficient, and at the same time, thinking of renewables, where the prediction is so critical," she said, underscoring the holistic approach needed to harness AI's transformative potential.

As the energy sector continues its transition, the insights and innovations shared at ADIPEC underscore the crucial role that AI will play in accelerating the pace and scale of this transformation.

The panel emphasised South-South collaboration. (Image source: Alain Charles Publishing)

During a panel session at ADIPEC 2024, industry stakeholders discussed ways to increase collaboration between countries in the global South and the global North.

The discussion focused on energy transitions and the role of OPEC in ensuring energy access. Key points included the need for diverse energy sources, with OPEC advocating for all forms of energy, not just renewables. The conversation highlighted energy inequalities, such as Heathrow Airport consuming more energy than Sierra Leone.

The Paris Agreement was emphasised as a reduction of emissions, not a phase-out of fossil fuels. The East Africa pipeline and Uganda's oil projects faced financing challenges but are progressing.

The importance of South-South cooperation and regional collaboration in energy projects was underscored, with examples from Uganda, Cyprus, and Sierra Leone.

His Excellency Haitham Al Ghais, Secretary General of OPEC, explained why fossil fuels will continue to play an important role in the global South.

“We talk about the importance of another factor, which is urbanisation. By 2030 which is less than six years from today, we're going to have over 582 million people, nearly 600 million people, moving into new cities all around the world, again in non OECD developing parts of the world,” he said.

“The Paris Agreement, ladies and gentlemen, is about reduction of emissions. It's not about phasing out or phasing down or keeping the oil under the ground. It's about reducing emissions that includes technology, that includes investing in renewables, investing in all sources of energy.”

“We have the OPEC Fund for International Development, an agency, a sister agency, based in Vienna, that is very active in Africa and other parts of the world in developing and promoting socio economic development projects, energy projects as well as renewable energy projects.”

“We also have the charter of cooperation, which we signed in 2019 which is a platform that is open for oil producers to participate in, whether it's exchange of technologies, exchange of experiences between various member countries and non OPEC producers who are not members of OPEC that can participate in this platform to gain access to the best practices being implemented in our member countries.”

Growing South-South collaboration

Uganda’s Minister of Energy and Mineral Development Ruth Nankabirwa, said, “The East African crude oil pipeline was a negotiated project, and it was a win-win. My president wanted all the oil refined in Uganda, but because we didn't have money to do it by ourselves, we collaborated with investors and we let some of the crude leave the country, while some is refined, which will come with industrialisation.”

Deputy Minister of Energy for Sierra Leone Edmond Nonie, said, “We have big clients in the mining sector who have the capital to pay and have the willingness to pay for lower priced electricity from the grid. So we are embarking on a campaign to connect these mining companies, and once we have these transmission lines out to these companies, we can then do the further, last mile connection to our communities.”

Meanwhile, Cyprus is collaborating with Egypt for energy transmission.

The country’s Minister of Energy, Commerce and Industry, George Papanastasiou, said, “The conversation with my colleagues in Egypt is to utilise the [Egyptian] infrastructure [for export]. Secondly, there are pipelines that cross the eastern Mediterranean, which reach Egypt. And the infrastructure in Egypt, there are two LNG terminals, liquefaction plants in Egypt, which are under-utilised.

“This is possibly the destination in order to reach the markets. Of course, there is the domestic market of Egypt as well, which is very important. We all know that power generation in this country is mostly coming from natural gas. Cyprus is very well positioned, and at the right time in order to support and provide the natural gas and use the infrastructure in order to reach the international markets.”

Eng. Anas Aljuaidi, CEO, Mannesmann Energy. (Image source: Mannesmann Energy)

Abu Dhabi-based Emirati fully independent EPC contractor and technology integrator MMEC Mannesmann has rebranded as Mannesmann Energy, reflecting its increased focus on new energies and support for the energy transition

Oil Review Middle East spoke to its CEO, Eng. Anas Aljuaidi, who explained the rationale behind the new brand identity, officially announced at the Investing in Green Hydrogen conference in London in September.

Aljuaidi explains that the company, with its MMEC Mannesmann heritage, has a strong background in oil and gas, construction and heavy engineering, but has since 2020, when it became a wholly-owned Emirati company, diversified into renewable energy and sustainability sectors.

“We are still supporting the decarbonisation of oil and gas, in for example EOR projects, but are looking to do more in renewable energy and energy generally, in support of the energy transition,” Aljuaidi says. The new name therefore more accurately reflects the scope of the company’s activities, with 50-70% of its projects envisaged to be in renewables by 2030.

Mannesmann Energy plays a key role in the UAE’s energy transition, focusing on low-carbon pilot projects and contributing to decarbonisation and net-zero goals. Its expertise supports the UAE Hydrogen Strategy by accelerating the adoption of advanced technologies through strategic partnerships with leading renewable sector providers. Eng. Aljuaidi notes that the company was the first contractor in the UAE to be involved in green hydrogen, having acted as the EPC contractor for the supply and operation of a high-speed hydrogen refuelling station in Masdar City, the first of its kind in the region, with recharging capabilities of 750 bar. It is about to announce its second blue hydrogen project in the region.

“We are emphasising our capabilities as an EPC contractor and technology integrator, and adding value from an engineering perspective to accelerate hydrogen implementation in the UAE,” he says. “Our ambition is to keep the highest market share when it comes to clean energy and clean hydrogen, whether blue or green, to support the UAE’s hydrogen strategy.

“Being a technology integrator is our strength, as we can work with any technology to meet our clients’ expectations. That’s one of our areas of expertise. We have an excellent engineering team with international expertise that can evaluate technologies and advise the project developer on the best technology for the application, and how to reduce the CAPEX and OPEX cost to make it more viable for the market.”

Keeping costs down

While hydrogen is rapidly gaining momentum, the cost of developing projects can be prohibitive, with many calling for increased government support and incentives. Eng. Anas Aljuaidi has a strong opinion on this.

“Our philosophy is that is we should not rely on governments to bring costs down; there is a lot we, the EPC companies, can be doing ourselves to reduce costs, for example expanding our supply chain by engaging new technology providers and SMEs rather than going to the top tier companies, whose costs are often unbelievably high, and by using competitive sources of components. In any hydrogen project, the electrolyser accounts for only 20% of the total cost; 80% is accounted for by the EPC. So the project developer should engage the EPC contractor at an early stage to reduce the risk and costs. That’s how we can really accelerate hydrogen production.”

So there is always room for reducing the price, but you can only do that by engaging the EPC contractor.

“When it comes to the OEMs, we can help them as well by advising them on the right elements for their electrolysers or their products. These should be obtained locally or where they are readily available, to avoid unnecessary transportation costs and the risk of supply chain disruption.

“Some elements are by nature very expensive, so it is important to select a competitively priced element to keep the end product cost lower. In China an electrolyser based on alkaline technology can costs US430,000 per kilowatt, compared with US$1,400,000 per kilowatt in Europe. That’s a massive difference and will have a big impact on the project capex.

“The project developer needs to select the right geographic location for their development and ensure that it is near to its customers, to avoid unnecessary costs, such as those entailed by converting hydrogen to ammonia for transportation and cracking it back to hydrogen when it reaches its destination.

“So instead of complaining that governments are not giving incentives, or not paying premiums, EPCs should take it upon themselves to reduce the costs, then everyone will come to you and purchase from you. That is how we, as EPC contractors can guide our customers to enable them to accelerate hydrogen implementation, and we are involved in some early-stage projects where we are doing this.”

Supporting localisation

Mannesmann Energy is also supporting the UAE’s efforts to localise electrolyser manufacturing in the country. Aljuaidi comments that the UAE is one of the most advanced countries when it comes to enabling clean energy, with the ‘Make it in the Emirates’ programme offering incentives for local manufacture, thereby enabling companies to produce products at a competitive price (hydrogen is one of the priority sectors). The Emirates Development Bank also provides financial support for businesses in strategic sectors, including renewables. Progress has been encouraging, and Aljuaidi is optimistic about the future.

“A number of agreements were signed during the Make it in the Emirates Forum last year and this year,” Aljuaidi says. “It’s a new market, and it will take time for projects to get off the ground, but I am sure it will come.”

More Articles …