In spite of the multiple pressures facing the North Sea, or possibly because of them, the need to decarbonise oil and gas production remains paramount.
It won’t be long before the middle of the decade rolls around, at which point the industry will have been expected to hit the first of the emissions reduction milestones it has formally agreed to.
Under the North Sea Transition Deal (NSTD), a pact between the sector and government signed in 2021, emissions reductions of 10% need to be achieved by 2025. By 2027 that figure is 25%, rising to 50% in 2030, before the basin reaches net-zero in 2050, in line with Westminster’s wider ambition.
Cutting the low hanging fruit, like reductions in flaring and operational improvements, means progress has already been made. These savings will get the industry some of the way. But to hit the more ambitious goals, deeper decarbonisation of offshore operations is a necessity.
To that end I was heartened by the recent move by industry regulator, the North Sea Transition Authority (NSTA), to start consulting on plans to accelerate the electrification of upstream assets.
In launching the process, the NSTA was unambiguous – if operators don’t take affordable steps to electrify their assets, don’t expect further production consents to be green lit. This is the right message to spur action, and one hopes it isn’t watered down as the consultation plays out.
The NSTA also unveiled its ‘OGA Plan’, which sets out specific pathways for offshore operators to axe their greenhouse gas emissions and levers it will pull to support them. Given that the consultation was opened with a warning that without more effort from operators the 2030 NSTD target could be missed, this leadership from the regulator is welcome.
Cerulean Winds has long been clear that new oil and gas fields and net zero can, and should, go hand in hand – our proposed basin-wide solution will be pivotal to achieving this. If the last couple of years have shown us anything, it’s that energy sustainability must be counterposed by energy security, especially if we are to ease the financial burden on households, protect vital offshore jobs, and keep the wheels of the UK turning. But that outcome relies on industry fulfilling its emissions reduction promises – and that relies on switching the power source for the UK’s offshore oil and gas assets from fossil fuels to electricity.
In recent weeks there has been something of a black cloud hanging over much of the North Sea electrification discourse. A lot has been made about the huge cost, time, and engineering challenges of rewiring the North Sea; nobody is downplaying these hurdles and overcoming them will be tough.
But for all the reasons stated, now is not the time for inaction. Rather the UKCS oil and gas industry should seize this opportunity to confidently chart its course and demonstrate that, even in the face of significant headwinds, it is capable of being a leading light in the energy transition.
Of course, operators committing to decarbonising their production through electrification is only half the battle; they need an affordable and reliable source of green energy. Here the obligation is on offshore wind developers, particularly those that are tailoring their projects to oil and gas decarbonisation.
The Scottish Government has already approved 5GW worth of new offshore wind specifically aimed at North Sea platform electrification. Cerulean Winds was awarded three lease options in this process – known as INTOG.
Cerulean Winds will develop these sites to create a North Sea Renewables Grid that will produce multiple gigawatts of clean energy. Oil and gas assets will be able to tap into this green power generation and transmission system, as industry does onshore, giving them a much-needed means to zero out emissions.
Billions of pounds in investment, much of which will be spent in the UK, will be needed to deliver this crucial web-like project, creating thousands of jobs as a result. Cerulean is working to a start-up date of 2028 for the North Sea Renewables Grid to meet, and possibly exceed, the 2030 emissions reduction targets, as well as reaching those assets that are furthest offshore.
For all the successful INTOG projects, hitting stated targets is a must, for two main reasons; it will give the UK’s fledgling offshore wind supply chain much needed experience ahead of the wider boom, and it will allow the North Sea oil and gas industry to make those vital emissions cuts.
There needs to be that mutual recognition. Oil and gas companies cannot stick to their decarbonisation promises if wind developers miss their target dates, in the same way wind developers cannot rubber stamp projects unless oil and gas companies pledge to use them.
Not everything is in the offshore wind industry’s hands though, and investment in this most crucial of infrastructure is not without risks. Luckily government appears to be awake to this and with the NSTA now taking a strong lead on electrification, things are beginning to move firmly in the right direction.
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