New offshore drilling record

The deepest offshore well by water depth is currently being drilled offshore Uruguay.

Total is using the Maersk venture drillship in 3,400m of water (beating the previous record of 3,170m set by ONGC offshore India) to drill the Raya-1 well, 250km offshore Uruguay.

The drilling operation commenced on March 30th and is estimated to take 100 days to complete. If the well is a success first oil could be expected by 2021.

Source: Uruguay: First offshore well in years breaks world record

Forecasting the electrical vehicle market

There is currently much talk about electrical vehicles and I have been thinking for some time about how this may impact future energy demand. I was then interested to see this article forecasting the impact of electrical vehicle sales on the car market.

Some interesting points:

  • There are currently around 1.2 billion vehicles on the road today and Navigant Research estimates this will grow to around 2 billion by 2035
  • In 2015, the global vehicle pool consumed 42% of the world’s 93 mmbd crude oil consumption. This implies if there is no major change in vehicle efficiency or usage then oil consumption for vehicle use alone will be approximately 66 mmbd in 2035.
  • Major oil companies are predicting slow growth rates in EVs
  • Currently EV sales are a negligible percentage of total vehicle sales globally, however, EV sales growth is currently running at approximately 50%.
  • In a high growth scenario EVs could represent 55% of the global vehicle pool by 2040 although a moderate growth rate scenario suggests that EVs may still only be 20% of the global vehicle pool by 2040.

What is not considered is the impact of autonomous vehicles and companies such as Uber on driving patterns and vehicle demand. This is obviously a lot more difficult to forecast.

Offshore Wind Costs Falling Rapidly

ORE Catapult issued their second Cost Reduction Monitoring Framework (CRMF) report in March which showed that offshore wind projects achieving final investment decision (FID) in the UK in 2014 were, on average, based on an levelised cost of energy (LCOE) of £121/MWh (~$175/MWh) with the industry being confident of achieving a levelised cost of energy (LCOE) of below £100/MWh (~$145/MWh) by 2020.

Cost reductions have been driven by investment in turbine technology but further innovations are required from the ‘balance of plant’, such as foundations, cables and substations. However, ORE states that the main risk to achieving these cost reductions is that the growth and scale of the offshore wind market is currently behind schedule due to delays in additional Contract for Delivery (CfD) auctions by the UK government.

The report makes a number of recommendations to ensure cost reduction targets are met:

  1. Ensure additional CfD auctions in 2016 and subsequent years
  2. Prioritise industry support for areas where 2020 innovation targets are at risk
    • Ensure continued progress in deployment of 66kV systems and undertake a review of the gaps in cable standards
    • Ensure that demonstration sites are secured to de-risk gravity base structures and prioritise research into jacket foundation design and optimisation
    • Continue research into the cost reduction potential of AC platform design, increased capacity AC cables, lightweight (or distributed) transmission systems and HVDC
  3. Coordinate industry and government actions to grow collaborative initiatives in a maturing market
    • Engage regulators on lessons learned from across European legislators
    • Consider whether the CfD process has results in increased barriers to collaboration
  4. Track the impact of slower than anticipated market deployment on investment in R&D and infrastructure
  5. Identify technology innovations that will deliver further cost reductions post 2020

Source: ORE Cost Reduction Monitoring Framework

How OTEC can help mitigate climate change

At COP21 in Paris policy makers expressed a strong desire to limit global temperature increases to 1.5 degrees Celsius above pre-industrial levels. However, at the time this conference was held the 1 degree limit had already been surpassed.

A great graphic from skeptical science shows that from 1993 to 2003 93.4% of climate change induced heat change went into the ocean:
global warming components

65% of the additional heat in the oceans is accumulating in the upper 700m with a further 20% between 700m and 2000m and the remaining 15% below 2000m.

Because of the mass and heat capacity of the oceans they are slow to heat up and then slow to cool down. The oceans are currently on average around 1 – 2 degrees warmer than the atmosphere so tend to transfer heat into the air. By most estimates it will take about 1000 years for the atmosphere and ocean to come back into equilibrium once greenhouse gas concentrations are stabilized. One study has indicated that 2.4 degrees of warming is already baked into the next 1000 years.

Jim Baird suggests one possible response to this is to try and move as much surface heat in the ocean into deeper waters and derive energy from such a movement.

Ocean Thermal Energy Conversion (OTEC) could move heat from the surface to an intermediate water layer and generate power as a result of the second law of thermodynamics. The oceans could then be used as a global warming buffer delaying the onset of the serious and imminent consequences and generate much needed clean energy at the same time.

Sources: The closing window of opportunity on realizing global warming can serviceably be unrealized 

Hours and productivity

A recent paper by John Pencavel of Stanford University suggests that companies should not focus on how many hours their employees are working but instead consider how to optimize their productivity. Pencavel notes that:

Profit-maximising employer will not be indifferent to the length of … working hours over a day or week

Indeed, data from the OECD shows that working longer hours results in a reduction of labour output per hour:

Relationship between hours worked and productiv

Source: World Economic Forum