ADX Energy reckons it has the skills to redeploy its O&G assets for green energy alternatives
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In 2019 ADX Energy purchased a long-life producing oil field in Austria but rather than continue the O&G route, the company is instead looking to use its assets and know-how to potentially generate geothermal power.
Plans are in the works for a geothermal pilot plant with Siemens Energy and RED Drilling & Services GmbH (RED) – in a move that executive chairman Ian Tchacos said was a no-brainer considering that its assets are right on the doorstep of the Alps.
“Geothermal power generation has the potential for the profitable and integrated transition to green energy production, while preserving and enhancing the value and lifespan of our existing oil and gas assets,” he said.
“The pilot project will demonstrate the potential for oil and gas reservoirs to be redeployed for green energy solutions in the near future.
“The reason we’ve gone with Siemens’ is because they’ve developed a technology that’s six times more efficient than the current technologies for generating electricity.
“The advantage of that is for every well you drill, you’re going to be able to get six times the amount of energy from that well, so with this technology geothermal will become much more economic.”
“Currently, we’re doing studies on a number of different well sites looking at major wells that have been drilled before so that we don’t have to drill new wells.
“Then we’ll assess each of these sites to ensure that the reservoir that we’re using has got the right sort of characteristics – that there is sufficient temperature, and you can get enough flow rate through the reservoir to be able to properly utilise the technology.
“We could be conducting the first downhole testing in Q3 2021.
“We’re also exploring geothermal power generation opportunities across our other Central European jurisdictions.
“Geothermal is capable of providing potentially cheap, constant and reliable carbon free energy.
“And when it works well it works 24/7 so you’re not influenced by the wind or the sun or anything else – you’re going to get this constant source of energy.
“You can use it to generate electricity and you can also use it in places where it’s very, very cold for town heating.
“It’s nothing new in Europe, where mountains like the Alps generate a lot of heat and relatively shallow reservoirs produce steam once drilled and generate electricity via a turbine.
“Unfortunately, this doesn’t work very well in Australia because you have to dig extremely deep to find hot enough reservoirs to make it economical.”
“The hydrogen project that we announced in the Vienna basin is basically a hydrogen production and storage project.
“The reason that we believe this is an exceptional opportunity is because in the Vienna basin where we have existing oil and gas fields, some of the reservoirs that we have are relatively shallow, and the perfect pressure to be able to inject and store hydrogen.
“The reason that it’s a good place to store hydrogen is because where our field is in Austria there are some of the biggest wind farms in the country – so you’ve got the green power already being generated and we’re connected to the gas network for both Europe and Austria.
“And as of the first of June, this year, you’re actually now allowed to put hydrogen into the gas network.
“There’s not enough renewable power in Austria, especially in winter when the gas prices virtually double.
“And in summer when the sun is shining, and the wind is blowing, there’s actually too much electricity in Austria, and quite often there’s certain days of the year where they shed the electricity because they physically can’t get into the grid.
“This presents an opportunity where we could take the electricity that’s being wasted, and at low cost, convert it to hydrogen in the summer months and then put it into the existing gas network in the winter months, when energy prices are really high and there’s a big demand for energy.
“And you can also already blend hydrogen with methane so that means that there’s a great opportunity to store (say in our of our reservoirs) what would have otherwise been wasted energy from electricity.”
“It’s our ability to take oil and gas assets that historically were used to produce oil and gas and be able to redeploy them to be able to be utilised effectively for future green power projects.
“We’ve got the skill because we understand how to drill wells and how to store energy in reservoirs – so now we’re really taking those skills and redeploying them, as well our existing assets, to go forward with green energy alternatives.
“It’s good business because it means that we can extend the life of our assets and obviously, it’s good for the environment because we can provide green energy from those assets that would otherwise probably be abandoned.
“What we’re doing can be difficult to articulate because sometimes people see oil and gas companies as the problem.
“But I think what people will eventually see is that some of these oil and gas assets – provided they’re in the right place, with the infrastructure around and subsidies and financial support – oil and gas companies can be a big part of the solution going forward because we’ve got the skills and the assets to be able to create these opportunities.”