Why Are Oil & Gas Companies Electrifying Offshore Platforms?

Oil and gas producers are increasingly electrifying offshore with renewable energy instead of relying on diesel generators.
Electrification provides cost efficiency and operational benefits since it removes the need for on-site fuel storage and enables remote monitoring and management.
Renewable energy integration methods used include offshore wind power, subsea cables for power transmission, combined cycle power production, and energy storage systems.

July 24, 2023 | Oil and Gas

Polluting fossil fuels have long been powering offshore oil and gas activities.

This is a significant cost for the oil and gas producer. One offshore platform can have up to 10 generators onboard to cover its power needs. These generators can require an investment of up to $25 million per year (for one year of operations and maintenance and a year of diesel).

Also, there are carbon emissions to factor in. A diesel generator of 1100 kVA (1,000 volt-amps) usually emits 318 tons of carbon dioxide per year (includes fuel emissions and cleaning).

Renewables to the Rescue

To avoid these costs and lower their carbon footprint, more and more oil and gas producers have been running offshore rigs on electricity generated through renewable energy sources either onshore or offshore.

Breakthroughs in renewable energy technology such as offshore wind turbines, floating solar arrays and more efficient power storage systems are helping create a practicable and economically viable offshore platform electrification network.

How Are Companies Benefitting From Electrifying Offshore Platforms?

Renewable Energy Integration:

By integrating wind or solar power with offshore platforms, oil and gas producers can diversify their energy portfolio, reduce their carbon footprint and lessen their reliance on fossil fuels.

Cost Efficiency and Operational Benefits:

Offshore platform electrification results in considerable cost savings and operational benefits. For instance, switching to electricity eliminates the need for on-site fuel storage, transportation and maintenance that was previously required with traditional offshore power generation systems.

It has been observed that oil and gas companies can reduce nearly $1,189,000 USD in life cycle operating costs with submarine power cables as compared to using gas turbines (costs of gas versus electricity, ecotaxes, and operations & maintenance).
Using wind energy can help save nearly $63 million a year at $0.30 per kWh (with the hypothesis of a platform consuming 210 GWh per year).

International Climate Agreements and National Targets:

As of today, 15% of global energy-related greenhouse gas emissions come from extracting oil and gas and delivering it to consumers. Electrification of offshore platforms can help oil and gas producers meet greenhouse gas reduction targets.

What Are the Different Ways To Achieve Offshore Platform Electrification?

Subsea Cables:

To link offshore platforms to land-based electricity system, underwater cables or subsea power lines are installed to transport electricity from onshore power stations to the platforms. Platforms that receive electricity from the shore can minimize or perhaps eliminate the requirement for on-site combustion.

For example, Johan Sverdrup Field of Equinor in the North Sea is linked to the Norwegian power grid. The platform receives electricity from the onshore system, lowering its dependency on fossil fuel-based power generation dramatically.

Offshore wind power:

Offshore wind farms generate large amounts of clean electricity to power platform operations and operators across the globe are actively proceeding to execute this strategy for reducing their emissions and electrifying their platforms.

For example, Hywind Tampen project by Equinor, which aims to supply 95 megawatts to the North Sea facilities, is the world’s first floating wind farm to supply renewable power to offshore oil and gas installations.

Combined cycle power generation:

Most offshore operators see greener means of powering their operations as critical. One method is to employ combined cycle power generation, which uses the heat from a gas turbine exhaust to power a steam turbine-driven electric generator, allowing platform operators to lower pollution. As part of their attempts to cut emissions, operators are also aiming to electrify the compressor and prime mover equipment on their platform topsides. Despite this, a substantial barrier to the financial feasibility of electrification persists due to high capital expenditure of about $300 million and a direct impact on the levelized cost of electricity (LCOE).

For example, Petrobras plans to deploy a combined-cycle power generation system on its FPSO Maria Quitéria to reduce fuel consumption and emissions.

Energy Storage Systems:

Energy storage systems are critical in powering offshore sites because they guarantee a consistent power supply. Batteries, for example, can be used to store extra energy provided by renewable sources or during periods of low demand. These stored energy reserves can be used to provide a constant and reliable power source during peak usage periods or when renewable energy output is restricted.

For example, Echandia, a provider of heavy-duty energy storage solutions for marine and offshore applications based in Sweden, entered the offshore energy market in February 2023, obtaining a first contract for battery systems to assist decrease emissions and boost energy efficiency on a jack-up drilling rig.

In all, offshore platform electrification is being accomplished using a mix of technologies, including subsea cable transmission, offshore wind power integration, energy storage, and combined cycle power production. These techniques enable oil and gas businesses to access clean and sustainable energy sources, decrease emissions, and improve operational efficiency, paving the path for a more environmentally friendly future in the offshore industry.

Author: Sanket Chipade