The number of companies within the oil and gas industry turning to power their operations using renewable energy is increasing, according to a new report issued by IHS Markit.
According to the report, Striking pace of growth in renewable projects powering oil and gas field operations, the key driver in an increase in the adoption of zero-carbon sources by oil and gas companies is to reduce carbon emissions from operations.
The number of of renewable energy projects by oil and gas companies has increased from less than 15 in 2000 to more than 45 at present.
Up to 13 renewable energy projects were announced within the oil and gas sector in 2018 and 15 in 2019, according to IHS Markit.
Projects announced in 2018 and 2019 are expected to avert more than 3 million metric tons of annual carbon dioxide.
The majority of renewables projects within the industry are led by solar deployments followed by hydropower and wind.
Judson Jacobs, executive director of upstream energy at IHS Markit, said: “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.
“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.
“Several factors beyond emissions reduction are also driving the growing interest for renewables in oil and gas operations. Stakeholder pressure to reduce emissions is a factor.
“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.”
Field-based renewable installations are demonstrating reliability. And electrification—drawing renewable-generated power direct from the grid, as to offshore platforms in Norway—removes most energy generation equipment entirely, enabling fewer on-site personnel needed to operate it and smaller facility footprints. Additional benefits include reduced maintenance expenses and the elimination of fuel deliveries to site.
Although the number of field-based renewable energy projects will continue to accelerate in the coming years, several challenges must be overcome before widespread adoption. Cost relative to traditional energy generation sources, the development of supply chains in remote regions, and energy storage for intermittent renewable sources are all significant factors currently constraining growth.
Minuri De Silva, research analyst, costs and technology, IHS Markit, adds: “North America and Europe, where renewables deployments have been most prolific to date, are still growing.
“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.”
Read more about the report.