Here’s why electrification is an important climate measure
To make effective reductions in greenhouse gas (GHG) emissions, large-scale point sources such as offshore installations and process plants must reduce emissions significantly. Electrification means replacing fossil power sources with renewable energy, which will contribute to a reduction in GHG emissions.
Electrification is now happening all over society, whether it be when we switch from fossil fuel-powered cars to electric cars, or electrify power-intensive industrial processes currently powered by gas.
Why are we electrifying some of our plants and platforms?
The transition to a low-carbon society will require strong growth in renewable energy, but even in the most optimistic future scenarios for the energy transition, the world will be dependent on oil and gas for a long time to come. It is therefore important that oil and gas are produced with as low carbon footprints as possible.
Norwegian petroleum operations maintain a high environmental and climate standard compared to other countries. Oil and gas production are very energy-intensive processes. Today, most facilities produce their own energy through the use of gas turbines, which account for a quarter of Norway’s total emissions of CO2 and NOX.
In Equinor, we are working systematically to cut our emissions. The goal is to find the most technically and economically effective measures that contribute the most, whether they be large or small. Most of our measures are linked to energy efficiency.
Electrification of plants that are already in operation requires major rebuilding and is only economical for plants with long lifespans. For such facilities, electrification will provide the greatest reductions in CO2 emissions per krone spent.
Electrification involves laying cables from the power grid on the mainland to the areas where replacing the gas turbines is most effective.
Questions and answers about electrification
The electrification of long-life installations in the oil and gas industry corresponds to about ⅓ of the total increase in industrial power consumption up to 2030.
Equinor agrees that Norway must be able to develop enough green energy to further develop both the continental shelf and mainland industry. It's important that the government ensures that sufficient power distribution is built in Norway, so that we avoid internal bottlenecks that hinder important business development and value creation.
Equinor supports increased power production in Norway, and will contribute with increased power production. In Norway Energy Hub, Equinor has recommended national development of 10 GW (45 TWh) of offshore wind by 2035. Together with other measures, this can provide Norway the power we need in the decades to come.
Electrification on the Norwegian continental shelf is more than a climate measure; it is an important part of the energy transition in Norway and creation of the jobs of the future. The large fields we are planning to electrify are highly profitable and will create value for society for many years to come.
Together with carbon capture and storage, electrification will enable us to produce ‘blue’ hydrogen. This is important because the demand for decarbonised hydrogen in Europe will increase in the future.
All measures that require more electricity can, in theory, contribute to increasing electricity prices. The electrification of installations in the oil and gas industry corresponds to about ⅓ of the total increase in industrial power consumption up to 2030.
Regardless of electrification on the NCS, it is important that the government facilitates increased power development, for example through the opening of more areas for offshore wind, while the Norwegian Water Resources and Energy Directorate (NVE) and Statnett must ensure sufficient grid capacity.
In Norway Energy Hub, we see a potential for 10GW or 45 TWh of offshore wind in Norway in the period 2030-35. This corresponds to four times the increased need for electricity on the shelf, and will account for about ⅓ of today’s power production in Norway — power that will be needed in the electrification of industry and society.
Electrification is one of the most effective measures for reaching Norway's climate goals. If we were to cut the same amount of greenhouse gas emissions from other sectors, it would cost significantly more with potentially more negative consequences for society than electrification of installations on the NCS.
Equinor and our partners will invest NOK 50-75 billion to reduce emissions up to 2030. There will still be substantial petroleum revenues. Our fields and facilities in Norway could generate billions in revenues for society.
Electrification and other measures will also mean new opportunities for the supplier industry and more industrial jobs both on the shelf and on land.
Electrification on the Norwegian continental shelf cuts emissions in Norway and globally. When we produce 10 TWh of energy from gas turbines offshore (electric power, mechanical energy and waste heat used in the process systems), we emit more than 5 million tonnes of CO2. Producing the same amount of energy using Norwegian gas in the EU will emit only half the amount of CO2 on average — about 2.5 million tonnes.
By replacing inefficient gas-powered electricity generation offshore with clean power from shore, more than 25% of Norway's greenhouse gas emissions can be cut. Offshore, the energy efficiency of power production is only about 25-35 per cent, whereas in Europe, efficiency is about 60 percent if used in a gas-fired power plant, and close to 100 percent when used for heating and industry. Replacing gas turbines, either completely, or partially, with electric power therefore provides increased energy efficiency and thus major climate benefits.
Electrification also has a global effect through the EU cap-and-trade system. National measures that lead to an increase in the surplus of quotas may therefore lead to more quotas being deleted in the EU’s deletion mechanism, which in turn contributes to reduced emissions over time.
Equinor assesses each emission point to determine whether electrification, the purchase of allowances in the European cap-and-trade system or other climate measures can best contribute to reducing emissions. Put simply, this will be about how we can get the most climate effect for the lowest possible measure cost.
If Equinor today stops all electrification projects on our operated fields and licences, it will entail significant additional costs for the partners to find alternative solutions, and for Norway through the purchase of EU emission allowances, which are announced to be reduced in the years to come.
If we assume that the current EU allowance price will be the level one can expect in the future, stopping all future electrification projects on the Norwegian continental shelf will reduce revenues from the Norwegian shelf by up to approximately NOK 60 billion up to 2040.
70%
planned reduction in our emissions from the NCS by 2040
Near zero
emissions from our oil & gas production on the NCS by 2050
10%
reduction in Norway’s overall emissions by 2030
Facts and figures about electrification of the Norwegian continental shelf
Oil and gas installations on the NCS emit approximately 13 million tonnes of CO2 equivalents
Over 160 gas turbines used for power generation on the platforms as well as flaring account for 90.6% of total CO2 emissions from the Norwegian continental shelf
In 2022, petroleum activities on the NCS accounted for 22% of Norway's total greenhouse gas emissions
Operators on the NCS pay taxes on emissions. In addition to climate quotas, which cost between EUR €80 and €100 per tonne in 2023, operators must pay a separate fee of approx. NOK 740 per tonne, meaning that in practice it costs about NOK 1600-1800 for every tonne of carbon dioxide emissions
Electrification is an investment in both the climate and the sustainable future of the oil industry
Electrification of the NCS is an expensive but profitable climate measure
Our Johan Sverdrup field has CO2 emissions of just 0.67 kg per barrel, compared with an average of 9 kg, thanks to electrification.
Sources: Equinor, Bellona, Enerwe, University of Bergen
What is Equinor doing in electrification?
The oil and gas industry is largely run on electricity generated on site using gas turbines and currently accounts for approximately one quarter of Norway’s total carbon emissions.
Troll A was the first platform on the Norwegian continental shelf to be electrified, back in 1996.
The Gjøa field was electrified from the very outset. As development operator, Equinor lay a 100 km long cable from Mongstad out to the Gjøa field – the longest alternating current cable in the world at that time.
In 2018, Martin Linge was prepared for electrification through the laying of a 163 km long cable from Kollsnes. Production from the Martin Linge field is scheduled to start in 2021.
The Johan Sverdrup field has been electrified by means of power from land, helping ensure record-low emissions from production. Johan Sverdrup has CO2 emissions of just 0.67 kg per barrel, compared with an average of some 9 kg on the Norwegian continental shelf and 15 kg globally.
Sverdrup phase 2 will also supply other fields on the Utsira High with power from shore, including Gina Krog, Sleipner field centre and Gudrun.
Another technological milestone was the opening of Hywind Tampen, the largest floating offshore wind farm in the world, in August 2023. It supplies the Gullfaks and Snorre platforms with wind power.
The government has also approved the Snøhvit partners' plans for the future operation of Snøhvit and Hammerfest LNG, with some conditions. The approval involves land compression from 2028 and electrification of the facility from 2030.
In addition, the government has approved the plans for power supply from land to the platforms on Troll B and C and to the Oseberg field. There will be more such projects in the coming years.