Renewable Power Production
Today's wind portfolio consists of several onshore development projects in Norway and we are planning the possible development of the 315 MW Sheringham Shoal offshore shallow water wind project in the UK.
In May 2008, StatoilHydro approved the building of the Hywind pilot. This demonstration project will be the world's first full scale floating windmill. It is a 2.3 MW unit that is scheduled for operation off the west coast of Norway in the second half of 2009. Complementary offshore wind technologies are available through our equity positions in the Norwegian companies Sway AS and ChapDrive AS.
In 2008 we invested in Brightsource Energy, which develops technology for concentrated solar thermal power, and the Iceland Deep Drilling Project (IDDP), which is a joint-research programme in deep geothermal energy in Iceland.
Our existing technology investments have also begun to show promise. Pelamis, a wave energy device in which StatoilHydro has invested, was the technology chosen for the world's first wave energy park situated off the Portuguese coast. In addition, it has been selected for other new projects in the UK. Hammerfest Strøm AS, a tidal power technology company in which StatoilHydro participates together with Iberdrola/Scottish Power, has been selected for use in projects planned by Scottish Power.
Sustainable fuels
Today, we own 42.5% of Mestilla, a 100,000 t/year rape seed biodiesel production facility in Lithuania, where production started in November 2007. Our strategy is to deliver rapid commercial growth within sustainable biofuels and to position ourselves for low-cost next-generation biofuel production. StatoilHydro's ambition is to become a significant provider of sustainable biofuels with a global production and trading position and to be a high-quality supplier in our retail markets.
Being able to produce biofuels sustainably is a prerequisite for developing our biofuels business. We are working actively to prevent damage to biodiversity, ecosystems and areas of high conservation value and wer emphasise the greenhouse gas accounts in a life cycle perspective. Our aim is to contribute to positive local development through competence building and job creation.
Our activities in hydrogen are centred on both short and long-term options. Through our subsidiary Hydrogen Technologies, we are actively developing and promoting ongoing sales of water electrolysis technology. We have also developed hydrogen station technologies aiming at the emerging markets within the transport sector.
StatoilHydro opened Norway's first hydrogen filling station in Stavanger in August 2006 and the second in Porsgrunn in June 2007. The stations are part of the national development project HyNor, in which StatoilHydro is a leading player. HyNor is a unique Norwegian joint industry initiative to demonstrate real life implementation of hydrogen energy infrastructure along a route extending 580 kilometres from Oslo to Stavanger.
On Utsira, an island off the west of Karmøy, StatoilHydro owns and operates a hydrogen demonstration plant where electricity from wind turbines is used to provide power to the local community and to produce hydrogen. When wind speeds are not sufficient to provide enough electricity, the hydrogen plant is used to generate power.
CO2 management
Carbon capture and storage (CCS) is regarded as one of the main means of combating climate change. StatoilHydro has long been a pioneer of CCS in oil and gas production, and it currently operates some of the world's largest projects in this area.
When StatoilHydro started to capture and store CO2 on Sleipner in October 1996, it was the first of its kind in the world. Its implementation has meant a reduction in CO2 emissions of nearly one million tonnes per year, equivalent to the emissions from 400,000 cars.
The Snøhvit field in the Barents Sea now provides gas to Europe's first LNG (liquefied natural gas) production site. The Hammerfest LNG-plant at Melkøya will capture about 0.7 million tonnes of CO2 per year from the well stream when in full production. The CO2 will then be compressed and sent back to the offshore field for storage in a reservoir 2500 metres below the seabed.
StatoilHydro is a co-operator with BP in the In Salah field located in the middle of the Sahara Desert in Algeria. Since 2004, up to 1.2 million tonnes of CO2 have been captured and stored in the In Salah field per year.
By using this experience as a foundation and placing the main focus on storage, StatoilHydro intends to generate new business from CO2 management. The planned facilities at Mongstad will provide valuable experience in the transportation and storage of CO2.
Our business efforts in CO2 also include the development of Clean Development Mechanism (CDM) projects under the UN. This activity builds on our CO2 reduction experience in the oil and gas sector. Our main target regions are Mexico, China, and Indonesia. Country selection is based on CDM market conditions, StatoilHydro's presence in the country and other criteria such as emission data and sector attractiveness.
Technology commercialisation
Our Industry Development unit supports suppliers, innovators and entrepreneurs with their technology developments and commercialisation activities, thus helping to create robust suppliers and new technology products that are vital for our oil, gas and new energy activities. The unit also supports industries and technology development in other countries where StatoilHydro operates.
Industrial Development acts as a catalyst by linking those developing new technology products to commercial activities and end users in StatoilHydro, providing funding and expertise, and taking strategic ownership in promising companies within the energy technology industry. Furthermore, StatoilHydro has ownership and involvement in all the major Science Parks and Incubators in Norway.
StatoilHydro actively benefits from venture activities aimed at accessing new technologies. In autumn 2008, it was decided to strengthen this activity by establishing a special purpose company, Energy Capital Management AS, to manage corporate venture activities in StatoilHydro. This move represents a further focus on venture capital as a tool for accessing new technologies, and it will support StatoilHydro's technology strategy and help capitalise on today's ownership positions in the venture business.
