New report: electrification of North Sea oil and gas would boost innovation and help meet decarbonisation targets

The report, carried out by independent consultancy firm Natural Power on behalf of Crown Estate Scotland, follows the announcement in February 2022 of the Innovation and Targeted Oil and Gas (INTOG) offshore wind leasing process proposed by Crown Estate Scotland. INTOG is the first leasing process of its type, bringing together the oil and gas industry and offshore wind sector to help achieve shared goals of innovation and decarbonisation. 

INTOG will see developers applying for the rights to build small scale innovative offshore wind projects of less than 100MW, as well as larger projects connected to oil and gas infrastructure to provide electricity and reduce the carbon emissions associated with those sites.? 

This new report says that with a rapidly expanding offshore wind market, large numbers of companies are now seeking to diversify into the sector, some for the first time. It highlights the combination of government policy, demand, and supporting infrastructure that make Scotland an attractive location. 

The report also highlights INTOG’s potential for off-grid solutions, by connecting wind turbines directly to oil and gas platforms, negating the need for connection to the shore.  

Though separate to the ScotWind Leasing round for commercial scale offshore wind projects, the report’s authors highlight the potential for integration with INTOG projects, offering ScotWind turbines the option of offtake connections to oil and gas platforms.  

The wider benefits of INTOG are also highlighted in this report, including the opportunity for oil and gas organisations with little or no renewable energy experience to use INTOG as a way into this growing sector. Similarly, those companies which have already committed to offshore renewables via ScotWind, could expand and deepen their knowledge by using INTOG to trial new technologies and develop the supply chain ahead of the ScotWind roll-out. 

Colin Palmer, Director Marine at Crown Estate Scotland, said: “INTOG leasing creates a very attractive opportunity for operators and developers to progress a just transition and help meet the challenging decarbonisation targets set by industry and government. 

“This report highlights how INTOG provides a way for oil and gas operators to not only meet decarbonisation targets, but also to establish themselves in offshore renewables. By bringing together these sectors, new jobs can be created and new low carbon innovation supported.” 

Applications for INTOG leases will be judged on a mixture of price and quality, with the bidding window currently anticipated to open in June 2022. The areas of seabed to be made available are set out in the Scottish Government’s?Initial Plan Framework, the consultation for which closed in October 2021.? 

Applicants will also be required to submit a Supply Chain Development Statement, outlining the nature and location of any supply chain activity linked to their proposed project.?? 

The full report – “Innovation and Targeted Oil and Gas Decarbonisation, Offshore Market Review” can be viewed here.