UK and Norway chasing electrification of North Sea assets to reach climate goals

As the energy transition has started gaining traction in the last couple of years, no stone is left unturned when it comes to options for reducing carbon emissions, including electrification of oil and gas assets, carbon capture usage and storage, replacing fossil with renewable sources of energy, and introducing alternative fuels like hydrogen and ammonia.

IEA’s recent roadmap on how to transition to a net-zero energy system by 2050 has said that there is no place for new investment in new fossil fuel supply projects. However, oil and gas production is expected to remain significant for decades to come and this is where methods like electrification of assets come in. 

In addition to carbon capture and storage, hydrogen, and offshore wind, electrification in the North Sea is one of the main measures to be implemented to reach the climate goals and net-zero by 2050.

Electrification of oil and gas assets is a process where a fossil fuels-based power supply is replaced with renewable power with electricity provided either from an onshore power cable or offshore wind turbines, which enables a reduction in greenhouse gas emissions. 

Recently, reports have emerged that four oil and gas heavy hitters are working on a high-level study project to explore the electrification of some of their assets.

After all, cost-effective electrification of existing continental shelf oil and gas assets could significantly reduce CO2 emissions and all four of these companies have already pledged to reduce their emissions and become net-zero companies by 2050 or sooner.

The four oil majors involved in the study are Shell, BP, Harbour Energy, and TotalEnergies, all with assets in the North Sea.

Offshore Energy has reached out to these companies seeking further details about their studies, but very little has been revealed about their efforts. What they did say is that the scope of the project is still under development and no decisions have been made.

Another North Sea player, NEO Energy, has recently told Offshore Energy that the electrification of assets is an element of energy transition in which the company wants to participate as it has the most impact on reducing carbon intensity.

As NEO Energy is poised to become one of the top five players in the North Sea following the closure of two major acquisitions, Offshore Energy has asked the company for further comment on the electrification in the North Sea. 

Russell Alton, NEO Energy CEO, commented: “Electrifying our sector is a complex undertaking which will require the collaboration and input of stakeholders from across the wider energy sector.

“We agree wholeheartedly with the OGA’s view that regulatory coordination and policy focus will be key to promoting investment to achieve real results. We look forward to playing our part in the process as one of the next generation of companies operating in the region”.

According to Rystad Energy’s emission data, the UK’s emissions from oil and gas production in the North Sea were the highest among the region’s producers, reaching 13.1 million tonnes of CO2 in 2019. Extraction emissions account for 10.1 million tonnes of CO2, with flaring making up the rest.

The UK government and its petroleum regulator, the Oil and Gas Authority (OGA), underlined in its Energy Integration report last year that platform electrification was both essential for cutting oil and gas sector production emissions in the near term and critical to preserving the industry’s social licence to operate. 

This would abate power emissions from O&G platforms (10 MtCO2, 70 per cent of offshore emissions or 10 per cent of total UK energy sector), extend the operating life of existing assets, and achieve cost efficiencies in new developments. The UK also sees the electrification of platforms as an opportunity to accelerate offshore wind power growth.

The OGA outlined in its net-zero report in March 2021 how the oil and gas industry should work to reduce greenhouse gas emissions, with new expectations focusing on three main areas. 

These included creating a culture of GHG emissions reduction within the UKCS, ensuring that GHG emissions reduction is considered throughout the entire oil and gas lifecycle, and collaboration between all relevant parties to support and progress potential energy integration developments such as electrification, carbon capture and storage, and hydrogen. 

In the landmark North Sea Transition Deal, the sector committed to reducing emissions by 10 per cent by 2025 and 25 per cent by 2027 and committed to cut emissions by 50 per cent by 2030.

The government and the oil and gas sector also committed to investing up to £3 billion (about $4.2 billion) to replace fossil fuel-based power supplies on oil and gas platforms with renewable energy. Furthermore, the sector will develop Business Cases for offshore electrification FEED studies and supply chain consortia funding for comprehensive spending review in the summer of 2021.

Through the electrification of offshore assets, the UK is also hoping to unlock energy integration, supporting not only oil and gas decarbonisation but also growth in other offshore sectors such as offshore wind development and green hydrogen through the energy hubs they create and the infrastructure they provide.

On that note, a new scheme has recently emerged to accelerate the decarbonisation of oil and gas assets in the UK through an integrated 200-turbine floating wind and hydrogen development. The £10 billion proposed green infrastructure play, proposed by Cerulean Winds, would have the capacity to abate 20 million tonnes of CO2.

The proposed development involves over 200 of the largest floating turbines at sites West of Shetland and in the Central North Sea with 3GW per hour of capacity, feeding power to the offshore facilities and excess 1.5 GW per hour power to onshore green hydrogen plants.

It also involves the ability to electrify the majority of current UKCS assets as well as future production potential from 2024 to reduce emissions well ahead of abatement targets and includes a 100 per cent availability of green power to offshore platforms at a price below current gas turbine generation through a self-sustained scheme with no upfront cost to operators.

When compared to the UK which has the highest amount of emissions in the region, Norway’s total emissions from oil and gas production reached 10.4 million tonnes of CO2 in 2019, according to Rystad Energy. While the UK is only now working to electrify its oil and gas sector, some Norwegian assets have already been electrified.

The Troll A platform, which came on stream in 1996, was the first electrified installation on the NCS. Furthermore, the Johan Sverdrup field, which came online in October 2019, has been electrified by means of power from shore.

New developments like the Martin Linge field are already prepared for electrification ahead of its startup scheduled for 2021. Plans are also being made to enable the Sleipner Field Centre, the Gudrun platform, and other connected fields to reduce their emissions through power supply from the Utsira High.

Furthermore, Equinor will supply the Gullfaks and Snorre platforms with wind power through the pioneering project Hywind Tampen, the largest floating offshore wind farm in the world when it starts operating in 2022. The wind farm construction has already started.

In addition, work is underway to investigate the possibility of supplying power from shore to the Troll B and C platforms and to the Oseberg field.

Namely, Equinor filed its plan for development and operation for the partial electrification of the Troll B platform and full electrification of the Troll C platform to Norwegian authorities in April 2021. 

The project is expected to cut CO2 emissions by almost half a million tonnes per year, which is the equivalent of more than three per cent of total emissions from oil and gas production and one per cent of total emissions in Norway.

In addition to its involvement in the electrification study in the North Sea, BP has joined the recently established consortium between Statkraft and Aker Offshore Wind, which is preparing a bid to build an offshore wind farm in Norway. The announcement came only a week after Norway revealed it would open up new areas for the development of offshore wind projects as a response to the demands from the local industry.

Through the consortium, BP and its partners will propose to develop an offshore wind project in the Sørlige Nordsjø II (SN2) area, with a plan to also explore opportunities to provide clean power to electrify ‎offshore oil and gas facilities.

These plans are part of BP’s goal to grow its net renewable generating capacity from 2.5 GW in 2019 to 20 GW by 2025 and to around 50 GW by 2030. The company also aims to increase annual low carbon investment ten-fold by 2030 to around $5 billion a year.