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Offshore Platform Electrification Market is anticipated to witness lucrative gains through 2032. Utilization of electricity as the power source at offshore platforms, instead of or in addition to gas, is gaining speed for emission reduction purposes. The electricity is typically sourced through offshore energy farm the platform is connected to or through power cables from land. Offshore platform electrification helps achieve efficiency as corporations focus on bringing down their respective carbon footprints.
Growing concerns about emissions in the oil and gas sector have bolstered the demand for offshore platform electrification. In fact, the emissions from the production, refinement, and transportation of an oil barrel leads to 10-30% of its full lifecycle emissions intensity. Rising focus of the world government on clean energy transition for net zero carbon emissions is likely to favor offshore platform electrification market growth.
As per the IEA, indirect greenhouse gas emissions from oil & gas projects, including both methane and carbon dioxide emissions, today range around 5200 million tonnes (Mt) of CO2 equivalent. These GHG emissions, which do not account for any emissions caused by the actual consumption of fossil fuels, amounts to more than 15% of the global energy sector’s overall GHG emissions.
Many world government agencies are emphasizing on cutting down methane and CO2 emissions from oil and gas sector, supplement business growth in a notable manner. Back in June 2022, the U.S., along with the European Union, and eleven other nations launched the Global Methane Pledge Energy Pathway to cut down methane emissions in oil and gas sector while advancing energy security.
In March 2023, the U.S. Department of Energy also announced an additional investment of more than USD 47 million to minimize methane emissions from its oil and gas sector.
In recent years, many countries are making strong investments towards strengthening their oil and gas sector to secure their energy future, which is likely to present new pathways for offshore platform electrification market growth. As per IBEF, in July 2021, the Indian government’s Department for Promotion of Industry and Internal Trade approved 100% FDI under automatic route for oil and gas PSUs in the country, contributing further to industry progression.
Despite a broad scope for industry growth, factors such as slow pace of offshore wind farm development and technical challenges associated with offshore platform electrification may hinder industry dynamics. The proposition is highly capital-intensive, and the economic viability of offshore platform electrification poses challenges to some countries.
Many players in the offshore platform electrification market are making heavy investments and taking strategic initiatives such as collaborations and mergers and acquisitions to enhance their market position in this space. Citing an instance, in September 2022, Vårgrønn and Flotation Energy, European developers of offshore wind projects entered into a partnership for the generation of renewable energy from offshore wind farms for decarbonization and electrification of offshore oil and gas plants in the North Sea.
Several companies are focusing on such oil and gas electrification efforts which is likely to supplement industry expansion. Citing an instance, in April 2021, ABB ltd., a Swiss multinational corporation, announced that it will support Equinor, a Norway-based petroleum refining company in its goal to develop next-gen autonomous oil and gas platforms.
Europe offshore platform electrification market is poised to register substantial gains between 2023 and 2032. This growth is attributed to the rising government efforts to address the region’s ongoing energy crisis, coupled with its clean energy transition efforts. In fact, as per the France 2030 national investment plan, the government of France plans to invest over EUR 1 billion (USD 1.05 billion) in renewable energy innovation projects.
The energy crisis birthed by Russia-Ukraine war has negatively impacted the offshore platform electrification market by further exacerbating the ongoing energy crisis. However, many European countries are currently focusing on securing their energy future by revamping the operations at the region’s oil and gas platforms, which is creating novel opportunities for the market. In fact, several initiatives such as REPowerEU have been rolled out to lower the European Commission’s reliance on Russian fossil fuels before 2030 while accelerating transition towards clean energy. Many world governments are also working towards a clean energy transition which will supplement business growth.