Offshore renewable energy presents different challenges than offshore oil and gas

Jun 4 2021

There is more to the energy transition than just a change in technology. We have posted before about the change in headcount working offshore – but there will also need to be a different mindset.

Offshore oil and gas are extracted from finite, often difficult to access sources. Operator revenue can be advanced by accelerating production and depleting the reservoir as quickly as possible, production rates are determined by the performance of the engineered asset. The offshore extraction of the resource is only one part of the overall process of converting the hydrocarbon into some form of useable energy. The key performance indicator is the cost by volume of production.

Renewable energy sources on the other hand are effectively limitless and widely accessible. A significant factor on production is the weather (energy isn’t available if there is insufficient wind) which cannot be rectified through engineering. Renewable sources result in the instantaneous production of electricity which, until the challenges of energy storage have been resolved, is a ‘perishable’ product – “use it or lose it”. Contracts and hence operator revenue relate to the long term provision of electricity over many years–and ‘acceleration’ of production is not possible.

While many companies with offshore experience will be looking at the renewables opportunities with interest, there are many unfamiliar challenges and expectations and a different mindset is required.

If you need to discuss the impact and challenges of the energy transition and the opportunities for your business, talk to us.