Digital transformation and decarbonisation in the energy sector

All this means additional information collection and disclosure obligations. To meet them, energy businesses will have to be able to access new data sources.  

For organisations saddled with too much data, much of it inconsistent and not auditable for external reporting, this shines the spotlight on a critical issue: data management, validity, and robustness. 

Software vendors are addressing this challenge by developing solutions geared towards sustainability; new cloud-based solutions are emerging from both specialist start-ups such as Carbon Chain and traditional software providers like SAP.  

For some energy businesses, these sustainable solutions are a good way to meet regulatory demands while simplifying their data and software landscapes. Organisations with more complex requirements will need bespoke solutions.  

For all these businesses, however, the greatest challenge is collecting and normalising their data. 

Once they have the data, what are energy companies doing to reduce emissions?

To actively manage emissions minute by minute data is essential. To achieve this level of granularity, companies can use sensors connected to AI machine-learning systems that automatically compute metrics such as flare efficiency in real time.  Integrating that data into control-room practices allows operators to make better decisions – for example, when to flare – that drive significant emissions reductions.

Quick wins from digital integration in operations

Going beyond operational excellence to reach future decarbonisation goals

Solutions aren’t limited to electrification. Improved reliability and performance of key equipment – separators, for example – can also drive significant emissions reductions in oil and gas operations. Advances in digital twin technology, data and analytics are all enabling operators to achieve levels of performance that are unprecedented in this industry. 

Operators are working together to create hub-and-spoke solutions for physically close assets to minimise cost and disruption. Here again, digital tools – including digital twins – are accelerating the development of standardised electrical equipment and skids  (transportable modular rigs) that can be rapidly installed on different platforms.

Planning for cost optimisation and future flexibility 

Our studies on the economics of offshore electrification show that offshore wind can provide an economic source of low-carbon power to decarbonise oil and gas installations.  

However, when in operation, wind farms may provide too much or too little power for the oil and gas platforms. Our study shows that bi-directional sub-sea cables enable power to be exported to and from the grid from offshore wind assets when there’s too much or too little capacity.  

By reducing the need for diesel generators for the offshore installation, this shrinks the carbon footprint of the construction process.  

Achieving commercial value through physical proximity 

Our analysis shows that the economics work best when proximate platforms (connected into the same oil or gas gathering system) are connected to a low carbon hub. This minimises any engineering changes required offshore and enables electrical equipment such as transformers to be shared.  

This model requires different operators to come together. That could mean, for example, a wind farm developer and the network operator working together on a common solution. We’re helping clients build digital workplaces that provide secure areas for this kind of collaboration. 

New operating models are also emerging from low-carbon hubs, which often combine carbon capture and storage with low-carbon power generation and hydrogen production (blue and green).  

In the hubs it is important to provide customers and partners with proof that their carbon has been sequestered as companies need to use this information to demonstrate to regulators and customers that their operations are low- or zero-carbon. Here solutions build on blockchain technology, similar to those used to verify the providence of food, can be used to provide the necessary digital proof.

The people factor and the role of creative thinking in decarbonisation 

Leading companies are encouraging their employees, customers, suppliers, and partners to come up with ways to use emissions data, financial information, and analytics to reduce emissions.  

These ideas are analysed via marginal cost abatement curves (MACCs), tools that allow companies to prioritise their investments by illustrating the cost-effectiveness of different emissions reduction strategies.  

Some oil and gas majors are already using this approach to increase engagement across their operations, customers and partners. Examples include Shell’s Target One Team for employees who achieve carbon reduction targets and implement innovative solutions, the BP Rewards scheme which awards discounts to customers for choosing lower carbon fuels and products and Sinopec’s Green Development Fund which supports green innovations and products by suppliers and partners.