Offshore wind and oil and gas: a lesson in competition or coordination?

Yahoo

07-04-2025

As the world's appetite for energy skyrockets, offshore wind and oil and gas are in closer proximity than ever before in order to meet demand.
Wind energy has steadily expanded beyond onshore projects into marine spaces since the 1990s, a process that has forced the two industries to reckon with the challenges and opportunities of co-location.
Now, oil and gas operators are exploring the use of wind-generated energy to power offshore installations as well as sharing or repurposing compatible infrastructure with offshore wind operators. However, difficulties remain in both the equitable distribution of resources and regulatory complications.
Industry experts speak to Power Technology about the practicalities and future of co-location as the global energy transition gains pace.
By 2030, nearly 15% of the forecasted 4.8 petawatt-hours (PWh) of wind power capacity will be generated from offshore projects, according to Power Technology's parent company GlobalData.
The momentum of offshore wind is being driven by technological advancements as developers achieve larger installations in deeper waters to tap higher (and often more consistent) wind speeds. The world's deepest fixed-bottom wind turbine stands at a depth of 58.6m and is co-owned by SSE and TotalEnergies as part of the $3.7bn (£2.89bn) Seagreen project in Scotland, which came online in 2023.
Wind power is gaining more ground on hydrocarbon assets, with floating turbines mounted on anchored platforms. These operate in waters where conventional fixed-bottom turbines are impractical due to depth constraints and seabed conditions.
Offshore wind is currently led by power companies such as Iberdrola and NextEra Energy but oil and gas players are set to gain a sizeable share of the market over the next decade. GlobalData highlights that petroleum supermajor TotalEnergies will be the fourth-largest producer of wind energy globally by 2030, provided all of its proposed projects go online.
Norway's Equinor, primarily a hydrocarbons producer, has also made serious moves into the offshore wind segment with plans to install a net capacity of 10–12GW by 2030. However, the company has been transparent about the financial challenges it faces in industrialising and monetising the technology, which it cited in 2024 after cancelling offshore wind projects in Spain, Mexico and Vietnam.
Then there is the return of US President Donald Trump, who has been suspending federal leases for offshore wind while approving oil and gas projects under his Unleashing American Energy agenda.
Trump's actions have seemingly reopened divides between the wind and hydrocarbon industries. In January, Shell announced its exit from the 1.5GW Atlantic Shores offshore wind project citing increased competition, delays and a changing market. Project partner EDF-RE Offshore Development reportedly remains committed to the project but in March, the US Environmental Protection Agency (EPA) rescinded its air permit, leaving the project's future uncertain.
While the US pushback on offshore wind has affected European companies, prompting shares to fluctuate in industry giants Orsted and Vestas, Europe is positioned to double down on both the technology and co-location.
Notably, the North Sea is a hub of co-location activity, with strong hydrocarbon and wind resources managed by a complex web of national authorities and international organisations, one of which is the UK's North Sea Transition Authority (NSTA).
Speaking to Power Technology, NSTA senior policy adviser Stuart Walters explains that 'co-location has become a central focus within the last five years in the basin, driven by floating offshore wind coming into closer proximity with oil and gas'.
The UK Labour Government is currently running a consultation on private investment into technologies to achieve its goal of establishing a 'world-class' offshore clean energy industry that combines a range of technologies.
Facilitating smooth cooperation between the offshore wind and oil and gas industries is the first step to achieving this, aided by compatible infrastructure, workforce skills and energy sharing.
Equinor's Hywind Tampen project off the Norwegian Coast in the North Sea is a leading example of synergised wind and hydrocarbon technologies.
The 88MW floating wind farm is the world's biggest with 11 turbines meeting approximately 35% of the annual power demand of five platforms in the Snorre and Gullfaks offshore fields. Co-location is also reducing the use of gas turbines, offsetting 200,000 tonnes per annum (tpa) of carbon dioxide (CO₂) and 1,000tpa of nitrogen oxide emissions, as per Equinor.
Wind continues to be a major enabler for oil and gas industry electrification and emissions reduction – an increasingly common mandate for new project approvals. Introduced in 2024, the NSTA's OGA Plan requires that any hydrocarbon projects coming online under its jurisdiction in the North Sea post-2030 must be fully electrified from day one of operations.
Such large-scale collaboration between offshore wind and oil and gas is strengthened by the industries' shared infrastructure.
Norwegian telecommunications company Tampnet provides fibre-optic cables, private 5G and satellites for offshore platforms, rigs, windfarms and vessels. Chief technology officer Anders Tysdal explains that telecom infrastructure can be upgraded as co-location expands, enabling the development of more remote-controlled installation or maintenance for wind and hydrocarbon projects.
Research organisation SINTEF senior research scientist Harald Svendsen emphasises the benefits of shared infrastructure: 'From the perspective of oil and gas, it makes sense to have wind farms nearby for electricity supply to reduce costs and emissions.
'For the wind industry, the connection is a stepping stone to accelerate offshore development as the willingness of hydrocarbon companies to pay for emissions abatement can be higher than what customers onshore are willing to pay. So, a project can be realised even if it isn't commercial on land.'
Svendsen confirms oil and gas companies have become more interested in wind power over the past decade as 'they realise climate policies aren't going away'.
"But even aside from climate change, the economy of wind is becoming clearer because of increasing CO₂ taxes, for example.'
Even as physical offshore infrastructure ages and is decommissioned, Walters explains that repurposing assets for operational use between the industries is becoming a possibility. 'Platforms can be reused for accommodation hotels related to wind maintenance areas or for environmental compensation measures like bird hotels.'
He also stresses the importance of reusing existing data on the offshore environment. The NSTA's National Data Repository (NDR) has almost a petabyte of publicly available reports from petroleum licensees and operators of offshore infrastructure.
'There has been close to 450 years of oil and gas operations and data gathering happening offshore. [The NSTA] is seeing more people working in renewables downloading seismic data, which can be of help when installing a wind farm.'
Walters identifies floating wind as a key area of growth. 'Learnings can be directly transferred from what has been done on floating production vessels and other types of platforms to many systems used in floating wind, such as anchoring or buoyancy mechanisms.'
The workforces of both industries are enabling such advancement, with an Offshore Energies UK report finding that 90% of workers in oil and gas production and its associated supply chain have skills that are transferable to other offshore energy sectors, including wind.
The UK Labour Government's Skills Passport went online in January with the aim of supporting oil and gas workers to move into jobs in renewable energy as the two industries grow ever closer.
'There is a predicted natural decline of oil and gas roles versus growth in wind roles, with opportunities to match them up,' says Walters. 'The next step is sorting the granularity of the types of roles and regions where they are needed.'
However, even as co-location births new opportunities for the two industries, additional strain is being placed upon shared resources, marine space, labour and supply chains.
Offshore wind is a relatively new entrant to the marine environment, with seabeds growing ever busier.
Wind farm and hydrocarbon developers are vying for the same specialised equipment and skilled labour to construct and maintain offshore assets.
In recent years, charter rates for marine vessels have skyrocketed, and in January ships able to operate in subsea environments were noted as being in particularly short supply due to increased demand from offshore wind.
Traditional oil and gas companies also fear their workforce will defect to renewable industries. This would exacerbate the skills shortage caused by mass retirement, as anticipated in Norway's offshore industry, and further complicate the notion of directly transitioning workers from one sector to another.
There is a similar picture regarding the repurposing of infrastructure, as Svendsen explains: 'In principle, when oil and gas platforms are decommissioned, the oil infrastructure could be replaced with electrical converter stations, for example, to make them into a hub for wind power.
'But it is unclear whether this is possible. Many oil and gas platforms have been designed for a particular use. To change this, they need to be taken ashore and rebuilt at huge cost.'
The offshore energy sector is also in competition for steel, a key construction material for platforms and wind turbines. The global steel supply chain has recently been hit by President Trump's 25% tariffs, disrupting supply and demand for manufacturers and prices for offshore developers.
Even aside from shorter-term headwinds, an enduring issue in co-location development is overlapping projects. 'There is a diverse set of seabed users,' says Tysdal. 'We have challenges with wind farms taking up acreages where we both have existing cables and potential future routing.'
Before Labour won the 2024 UK election, former Prime Minister Rishi Sunak granted oil and gas exploration licences under offshore wind sites, causing outrage and temporarily destabilising the UK's green energy market.
An increase in carbon capture utilisation and storage (CCUS) facilities is creating further congestion. A key example is the overlaps between the Outer Dowsing wind farm, the Northern Endurance Partnership's CCUS licence area and Perenco's hydrocarbon operations in the North Sea.
Walters confirms that, as a regulator, the NSTA has been adjusting its approach. 'As overlaps become more frequent, there is a much greater need to look ahead at projects. Traditionally, before we launch a new licensing round, we would consult with the Crown Estate towards the end of the process and deal with overlaps on a case-by-case basis.
'What we are finding now is that more red flags are coming up with new developments like wind farms. We have to think about mitigation much further in advance to promote collaboration.'
Much of co-location's future depends on regulatory developments, particularly in accelerating electrification. Walters identifies this as the biggest driver to create an 'integrated energy route', with Norway leading the way.
Research from Oxford University's Journal of World Energy Law and Business suggests that 'the Norwegian regulatory and legislative experiences may act as a potential model for future regulatory regimes' on wind-powered electrification.
Indeed, one of the Norwegian Government's conditions for awarding the 3GW Sørlige Nordsjø II offshore wind project to Ventyr Energy was an assessment of supplying wind power to nearby Ekofisk, one of the largest oil and gas fields on the Norwegian Continental Shelf.
According to Tysdal: 'In an ideal regulatory world, each industry would have a combination of protections for other users of the seabed while taking care of their own interests as part of a cooperative environment."
'Ten years ago, people wouldn't have predicted that co-location would become such a critical issue,' concludes Walters. 'Marine planning now has to look at optimising space and if there is more conflict, governments will have to decide which activities are prioritised.'
"Offshore wind and oil and gas: a lesson in competition or coordination?" was originally created and published by Power Technology, a GlobalData owned brand.
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