An Integrated Assessment of the Environmental and Economic Impact of Offshore Oil Platform Electrification

Abstract

Electrification of offshore oil and gas installations on the Norwegian continental shelf is one of several options to decrease the CO2 emitted from these installations. However, there is an ongoing debate regarding how the increased electricity consumption will influence the CO2 emissions in the power market, both in the short-run and in the long-run. This paper aims to address the issue and investigate the feasibility of the electrification of a large offshore area in the North Sea in comparison to standard concepts to supply energy offshore. A novel integrated model was developed for the purpose that includes and combines a process model of the offshore power generation units and a model of the European power system. The integration of the two models allows to simultaneously simulate the behavior of the offshore energy conversion systems and the effect of electrification on the onshore power system. The outcomes of the analysis show that the environmental performance of electrification is strongly affected by the selected approach to quantify the CO2 emissions associated with power from shore. Taking standard methods to supply offshore energy as basis for comparison, the marginal effect of electrification would result in increased CO2 emissions (+40%), while the average effect would entail large reductions in CO2 emissions (−48% to −90%), the extent of which depends on the geographical scope selected. An analysis on the economics of electrification indicates that its economic viability would be challenging and would not be favoured by a strong European commitment towards environmental policies since the expected increase of power price will outbalance the gains for the reduced emission costs.