Electrifying offshore: what is slowing rig electrification?
Wed, August 26, 2026 at 2:44 PM GMT+3 8 min read
Offshore oil and gas electrification has proven benefits including lower operational costs and emissions reductions. However, global uptake has remained low and, outside of Norway, most platforms still rely on fossil power.
Potential decarbonisation wins have been overshadowed by rising infrastructure costs and long connectivity timelines, but the burgeoning offshore renewables sector could bolster the oil and gas industry's economic incentive to electrify.
Unpacking why upstream electrification has stalled are four expert guests: Maurizio Bragagni, chairman and CEO of cable manufacturer Tratos; Said Addi, previously the global lead of crude and fuel oil trading at E3 Energy Group; Thomas Manuel Ortiz, former senior technical advisor for energy issues at the Texas General Land Office; and Mo Razzaq, oil and gas analyst at GlobalData.
https://open.spotify.com/episode/48ILs6Yjt6lO0PeKL3Cbfi
Electrification is slow and expensive
Norway's Equinor electrified the first rig – Troll A – in 1996. The project demonstrated clear advantages to onshore grid connection, including the reduction of upstream emissions and lower operational costs.
Although the technology has been tried, tested and proven, adoption remains low. According to Bragagni, this is because global demand for connection infrastructure has soared since 1996, driving up prices. "Now, AI means more data centres, which means more energy, which means more cable for fibre-optic."
As a result, he says, "there is competition that makes the price of cabling, in particular submarine cabling, very high".
Even if operators do invest in installing subsea cabling for grid connection, a substantial second obstacle looms: interminable timescales.
"To have a licence to lay a cable, it takes three years; to obtain the cable, it takes three years; to lay the cable, another three years. The supply chain is a ten-year project," warns Bragagni. "The path is too long."
The business case for offshore electrification
Despite rising capital costs deterring investment, electrification has significant advantages to buoy its business case.
Most prominent is decarbonisation, "or the appearance of decarbonisation", according to Ortiz. He calls it the "primary compelling reason for electrification", but caveats that, ultimately, it "is a business decision".
Operators need electrification to translate profitably. Although capital costs are high, there are significant operational cost savings to electrifying, as Ortiz points out. "You are going to use something like half a million gallons of diesel oil a year to run a large drilling rig. You have to haul all that out into the field. It is not cheap. It is not convenient. So, if you can plug your rig into the grid, why wouldn't you?" he says.
Thus, there is a palpable conflict between high capital costs and low operational costs that complicates the business case for offshore electrification. Addi says that feasibility therefore differs on a case-by-case basis.
"The economics depend heavily on where the asset is located, what power source is available, the cost of electricity in place, the existing equipment and how much new infrastructure is required," he says.
Electrification doesn't guarantee decarbonisation
Addi's point on an available power source is key. Electrification only works as a decarbonisation strategy if a grid's energy mix is largely composed of renewables. Otherwise, connecting remote assets is an expensive means of powering the rig through the same fossil sources burned on-site.
Ortiz points to the US grid, suggesting its gas-heavy energy mix undermines the decarbonisation appeal of electrification: "We still burn gas to generate something like 40% of all electricity in the US because we have a lot of it and it is cheap."
Razzaq concurs, explaining that "electrification only delivers the full carbon benefit if the electricity itself is reasonably low-carbon". However, when it is, he says the decarbonisation potential is strong: "A huge amount of CO₂ can come from burning gas or diesel simply to create electricity and mechanical power for compressors, pumps and other equipment."
Norway leads, but few have tried to follow
Norway has successfully realised electrification's decarbonisation potential. Majority-state-owned Equinor electrified its Troll B and C platforms in 2024 and has estimated around 250,000 tonnes per annum (tpa) of CO₂ reductions.
Elsewhere, at Edvard Greig and Ivar Aasen (also electrified), emissions reductions are estimated at around 200,000tpa.
Yet Norway's success has not sparked a global trend. Razzaq explains that it has specific advantages over other international operators, including "relatively clean grids, strong offshore electrical engineering capability, carbon pricing and clusters of platforms that can share infrastructure".
Clean grids are key – around 88% of Norway's electricity is generated through hydropower, which is both renewable and currently more reliable than intermittent wind or solar.
In comparison, Razzaq says most operators globally face "fields hundreds of kilometres from shore, weak grids and short remaining field lives in jurisdictions where electricity is actually more carbon intensive than running efficient gas turbines offshore".
Floating wind for electrification
Norway has another significant example of offshore electrification: Hywind Tampen, an 11-turbine floating wind farm, each with 8.6MW of capacity, which provides around 35% of its power to the Snorre and Gullfaks oil and gas fields.
Razzaq calls Hywind Tampen "a great example" of electrification, "because it is also almost counter-intuitive – an offshore wind farm powering an offshore oilfield".
Other operators are also exploring the opportunity. Last month, China's CNOOC deployed a 16MW floating wind turbine to power its Lufeng oilfields. In Scotland, Flotation Energy and Norway's Vårgrønn are planning to bring the Green Volt floating wind farm online in 2029 to power North Sea oil rigs.
However, Razzaq says "floating wind probably won't become universally normal". While floating wind can be installed in proximity to offshore assets, avoiding some capital costs, it faces the problem of intermittency.
"An oil platform can't simply stop operating because the wind stops," he says. "Offshore wind is more likely to become a hybrid power system rather than the sole source of power."
Offshore renewables could rewrite electrification economics
Floating wind is unlikely to be the sole power source for offshore rigs, but offshore renewables could still support the business case for electrification. Long-term, operators are beginning to consider the repurposing of offshore platforms as grid assets.
"If you build transmission infrastructure, power lines, transformer substations to power offshore oil and gas production in the early stages of an asset's life, then flip it back around to take power generated offshore from wind turbines or solar panels, you can really get a lot more life out of a project like that," explains Ortiz, who previously worked on a project looking to repurpose end-of-life platforms.
This solves two major problems: deferring both connection costs and expensive decommissioning.
"We had a very strong financial interest in trying to use state waters, and the federal government was also interested in this on their side of the line, to try to get more life out of these existing platforms," explains Ortiz.
However, considering the US specifically, he notes that the opportunity is currently stifled by offshore wind's "bad press".
Future challenges and opportunities
Bragagni is clear about what the greatest challenge is to offshore electrification: "There is no incentive to produce the floating wind farm. There is no incentive to install an export cable to connect the rig. Regulation doesn't help in that respect."
The challenges posed by high capital costs and renewables intermittency are substantial. The trajectory of offshore electrification is therefore likely to be a mixed one.
"In my opinion, what is going to happen is countries like Norway will carry on connecting the rig to the grid, thanks to supporting infrastructure, while those like the UK will deliver a mix because, at the moment, it is not economical or convenient to invest in export cables."
https://open.spotify.com/show/4bMCcRekF2WTTQMSTGjVRX
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"Electrifying offshore: what is slowing rig electrification?" was originally created and published by Offshore Technology, a GlobalData owned brand.
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