Renewable energy-powered oil & gas field operations projects have trebled in number in the past 15 years, according to new research from IHS Markit, underlining the “striking pace of growth” in the market for zero-carbon sources of power to cut emissions from fossil fuel production.
The analyst group highlights that thought “the numbers are small, they have been growing rapidly over just the past couple years”, with the 15 clean-energy oil projects in the early 2000s now tallying 45 in its Oil & Gas Field-based Renewable Energy database, including 15 announced last year.
“There is a striking pace of growth over the past few years and a dynamic commercial environment for delivering renewable energy to oil and gas operations,” said IHS Markit executive director of upstream energy Judson Jacobs.
“Energy efficiency efforts and reductions in flaring can only do so much to lower greenhouse gas emissions, so some companies are turning to zero-carbon sources to power their upstream, midstream and downstream operations.”
Jacobs said “several factors” beyond emissions reduction were accelerating the take-up of renewables in oil & gas operations. “Stakeholder pressure to reduce emissions is [one]. It is also about steeply declining costs for renewables and the industry’s growing familiarity and experience with these technologies.
“And there are tangible improvements to operational performance that go along with using them.”
Those renewable-power oil & gas projects launched in 2018-19– led by solar and hydropower but also including wind projects such as Hywind Tampen floating array that is to part-power Norway’s Snorre-Gullfaks oil & gas complex in the North Sea– are expected to avert more than 3 million metric tons of carbon dioxide emissions being released yearly.
Jacobs classed the activity in the oil & gas field–based renewable energy space at the ‘early adopter stage’, saying: “It is a dynamic and important trend to follow.”
IHS Markit expects the number of field-based renewable energy projects will continue to accelerate in the coming years but cautions widespread adoption will hinge on: one, cost relative to traditional energy generation sources; two, the development of supply chains in remote regions; and, three, energy storage for variable renewable sources.
“North America and Europe, where renewables deployments have been most prolific to date, are still growing,” said Minuri De Silva, research analyst, costs and technology at IHS Markit.
“And other conducive regions such as the Middle East, Latin America and Asia are also poised for greater adoption as they address technical and commercial issues. The growth potential is significant.”