While Asia has abundant natural resources and massive investments are being made into developing its energy sources, the biggest challenge for the region is scaling this up in a clean and responsible manner to meet rapidly-growing demand.
Norwegian certification giant DNV GL’s group chief operating officer Remi Eriksen, speaking in a recent interview in Singapore, says that the key to a stable regional energy landscape is for every country to have a good mix of energy sources.
Of these, natural gas will play a major role. Coal will also grow even though he hopes its use will be reduced, and solar and wind will contribute to the growth of renewables in the region, he says.
Eriksen, also group executive vice president and former CEO of DNV Maritime and Oil & Gas, notes however that for renewables to thrive, boosting storage technology and getting its cost down is crucial.
Already, in the past few years, the cost has dropped almost 70 per cent, but this needs to go down further and is a major obstacle, he says.
“We think this will be halved further, so that means the cost of storage will come down and this will open the opportunity for renewables to have a bigger penetration into grids, so it does not cause too much disturbance,” he adds.
Renewables are an increasingly attractive option to both the public and private sector, but one central challenge has been their intermittency, which fluctuates depending on the amount of sun and wind available. Storage technology that can store this energy for later use is seen as an ideal solution.
The maturing of battery technology will also pave the way for the use of more electric vehicles too, Eriksen observes. All private cars in theory could be electric as a typical battery charge can enable a car to travel up to 400 kilometres, he says, adding that larger vehicles such as trucks and buses should move to using LNG or CNG as fuel, instead of crude oil.
“Here, infrastructure development will be the second biggest challenge,” he declares.
DNV GL, with 16,000 employees and offices in 100 countries across the globe, posted an annual revenue of $15.2 billion Norwegian Krone (US$1.92 billion) according to its latest 2013 annual report - two thirds of which comes from its maritime and oil & gas business.
It may seem strange, therefore, that it is investing huge amounts into renewables, and in particular, to drive down the cost of wind energy.
The group has also made sustainability the cornerstone of its corporate ethos. Its mission statement, “safeguarding life, property and the environment”, is what drives the company, says Eriksen.
“The cost of wind energy has come down, but not as fast as solar. We need to reduce the cost, particularly of offshore wind, by 40 to 50 per cent to make it viable and and competitive with traditional power supply,” he notes.
The reason why the firm is “working heavily on it” is because of its application in powering oil and gas installations.
“This is about sustainability again. We need oil and gas for a few more years, but we should produce them as clean as possible,” he says.
To this aim, the company last month launched a Wind-powered Water Injection (Win-Win) joint industry project (JIP), with six major players from the wind, oil and gas industries signing up.
The idea is to use a floating wind turbine to help offshore oil projects extract fuel more efficiently. DNV GL says its studies show this concept will help to reduce the cost of water injection on oil platforms, avoid costly gas-fired power plant installations and therefore reduce carbon emissions.
“This means you can produce oil and gas as efficient as possible – that’s one part of it.” The other part is to use gas turbines in combination with batteries.
“On low loads, you can use these batteries and not run the engine. On high loads, you can use the gas turbines and at the same time charge the batteries – there’s an immediate effect and emissions and fuel consumption is improved. Batteries can help run gas turbines more efficiently. So this is a hybridization, the ‘Prius of the sea’” , he says.
Meanwhile, the firm is focused on developing new products and solutions for the energy market; it spends a hefty five per cent of annual revenue on research and development.
Erikson says that while global efforts to reduce reliance on fossil fuels is underway, “when it comes to oil, it’s still a valuable resource. It’ll be used for materials, components, clothing, paint etc, and less and less in combustion engines. This will be replaced by other fuels, including renewables.”
“Our approach is not to say, you should not produce oil and gas, but to provide the industry with the best operational practices so that it is done in the right manner.”
“That’s why we are promoting alternative ways. The world needs oil and gas, so let’s do it as efficiently as possible. That’s the core of DNV GL – it’s about technology and innovation for a better tomorrow.”
