Former Shell boss to tap free energy
23 April 2006

Lord Oxburgh will head a firm trying to extract power from North Sea gas geo-pressure.
By Laura St Quinton

The former Shell Chairman Lord Oxburgh is working with National Grid to investigate the possibility of using the North Sea gas’s natural pressure to generate “green” electricity.
Oxburgh is chairman designate of 2OC, a company trying to introduce ‘geo-pressure’ to Britain. The technology is based on a simple idea: natural gas emerges from the ground at a high pressure that is released before the gas is pumped round the country. 2OC would use the pressure that is wasted at present to drive turbines and generate electricity.

The company claims that energy equivalent to the output of two power stations is being lost to Britain each year. Oxburgh said: “If geo-pressure was fully exploited it would add at least 1 gigawatt of electricity-generation capacity to Britain’s network by 2010, and save more than one million tonnes of carbon per year – the equivalent to the whole of the NHS.”

The potential output would represent a big contribution towards the forecast shortfall in Britain’s power supply.

The men behind 2OC are Bath-based entrepreneurs, Michael Edge and Andrew Mercer, who set up the company last year. Edge, the majority shareholder, is the owner of London & Country, a mortgage advice business which he acquired after selling his earlier venture, Chase de Vere, in 2000. Mercer is chairman of Footdown, a leadership-mentoring firm, and founder of the software company One Meaning, which he sold to Oracle, the American computing giant.

Mercer said Oxburgh was a natural choice for the post. “He was considered to be a maverick at Shell because he was the first oil guy to admit we had a climate change problem. His green credentials are in no doubt.”

The project is still in its early stages and a feasibility study with the National Grid is under way. The technology behind geo-pressure is proven with sites in Europe and America, although these installations are on a scale smaller than those planned for Britain.

Two thousand potential sites have been identified in the country and the first is likely to be at BOC’s hydrogen plant in North Tees, scheduled for completion in 2007.

Mercer said the first phase would need between £350m and £500m of project financing, but he hoped there would be a decent payoff. “Based on completing a full agreement with the National Grid, the company may be taken public to finance a rapid global expansion. The expected revenue for year five will be £142 million with profits before tax of £50 million. That could value the company at more than £1 billion.”

Geo-pressure is likely to qualify for renewable obligation certificates (Rocs) entitling 2OC to subsidies without which, Mercer admits, “geo-pressure is potentially non-viable”.

Unlike wind turbines, the technology will probably not provoke protest because it is installed in existing industrial settings, unlikely to ever be seen by the public.
As Mercer is at pains to point out, the source is plentiful, will match demand and make use of energy that is otherwise lost.

It is also highly efficient, a claim endorsed by Stephen Tindale, executive director of Greenpeace, who has welcomed the venture. He said: “Such straightforward de-centralised approaches could revolutionise our energy production.”

http://www.timesonline.co.uk/article/0,,2095-2147486,00.html