The tip of the spear: powering energy transition from the front end

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Matt Kirk

According to figures published by the International Energy Agency, global government spending on the energy transition has risen to USD 1.2 trillion, with the largest increase coming from the Inflation Reduction Act.

As government funding will undoubtedly mobilise and incentivise private investors, energy companies will need to think wisely about the power of their own capital, to which front-end engineering scopes are critical for decision-making. Not only to ensure companies invest their own capital wisely but to provide a solid case for funding that will enable key projects to be brought to life. From creating the most cost-efficient design concept for green hydrogen production facilities to determining an accurate budget for carbon capture and storage (CCS) projects, getting the early phase engineering right is an essential step in providing certainty, reducing risk, and enabling investors and governments to budget accordingly for new energy projects and hubs.

While the true value of front-end engineering has been understood and appreciated for decades in existing industries, capital investment projects supporting the energy transition are different. There are more variables, and they often include multiple disciplines and the assessment of new and rapidly developing technologies. If not managed carefully at the concept and feasibility stages of a project, these variables can introduce significant uncertainty and risk to delivery.

In mature industries such as oil and gas or process and chemicals, a standard front-end framework can be used, but due to the novel and complex nature of energy transition work, a more collaborative approach is needed to create certainty of success. Wood is already well-positioned at the forefront of this new era in energy. Our teams have performed groundbreaking studies for energy transition work on projects like the world’s first e-methanol production facility for the marine sector, the UK’s first hydrogen pipeline networks- now expanding through our work with SGN in Scotland and southern England, conversion of plastics to hydrogen, and projects converting hydrogen into sustainable aviation fuels.

Wood has more than 1,500 technical experts dedicated to delivering front-end project development engineering, completing over 2 million manhours on study work globally each year. When it comes to driving strong outcomes from front-end engineering, the single most important aspect we have learned is that of collaboration and of partnering with our clients. When we work as a team, pool our collective knowledge, and bring cognitive diversity to these highly complex projects, we can better achieve project success and maximum return on investment.

As we continue to collaborate to ensure the success of this transition, Wood is actively engaging and influencing many key industry forums like the Hydrogen Council and the Carbon Capture and Storage Association (CCSA) in the UK and Europe, as well as the Houston Energy Transition Initiative (HETI) in North America. We are also leading key joint industry projects, setting common standards for CO2 specifications throughout the CCUS supply chain, and are working on large-scale carbon reduction programmes like Humber Zero in Europe as well as clean energy projects across the Middle East to reduce emissions of energy-intensive industries.

With our world-leading experts at the helm, we are designing a low carbon future one project at a time.

To learn more about Wood’s energy transition work, click here. To learn more about our project development services for large-scale assets and complex facilities, click here.

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