The impact of electrification on power system in Northern Europe

Abstract

Electrification is widely considered as a viable strategy for reducing the negative environmental impacts of the energy system. Following this strategy, most attention has been paid to electrification of road transportation, i.e., electric vehicles. In addition, substantial potentials could be exploited in the electrification of offshore oil and gas platforms, as an alternative to on-site gas turbines. In our research, we focus on electrification of the offshore oil and gas installations in the Norwegian continental shelf. We apply a net transfer capacity (NTC) based power market model to analyse the economic consequence of the Norwegian offshore platforms electrification on six Northern European countries. The power market model comprises Norway, Denmark, Sweden, Finland, Germany, and the Netherlands. The objective of the optimisation model is to minimize the operating cost of the power system over the lifetime of the oil and gas offshore platform considered for electrification. The operating cost comprises the sum of fuel cost, start-up cost, and carbon emission cost for all generators. We analysed three scenarios for electrification and carbon prices, and we assumed a development path of wind and solar power that is in line with EU climate policy up to 2050. Firstly, we investigate the power system performance without considering environmental taxes. Secondly, we incorporate the carbon emission cost into the optimisation model to analyse how this affects the production mix in simulated countries. Finally, we introduce the electrification of offshore platforms in Norway into our model to calculate the marginal costs and emissions associated with the increased power consumption. The lifetime for the North Sea offshore platforms' electrification in our research is assumed to be up to the year 2058.