Helping Oil & Gas Operators Reduce Electricity Cost and Improve Sustainability

At remote oil & gas industry sites, operating companies are faced with the increased cost of fuel for power generation while trying to maintain reliable energy assets and minimize maintenance requirements.

Petroleum production operations are inherently energy-intensive, with power requirements ranging up to tens of megawatts for larger facilities. Many site operators burn diesel or natural gas for their energy needs as connecting to a power grid can be expensive and time-consuming. Moreover, a grid connection that is capital-intensive does little to reduce the operating expenses for electricity consumption.

Increasingly, oil & gas companies are seeking to transition from a traditional power supply based on diesel or gas to a cost-effective and sustainable renewable energy solution.

Demands on petroleum producers

In the current business environment, it is imperative for oil & gas industry organizations to reduce operating expenses while implementing measures to meet strict Greenhouse Gas (GHG) emissions standards. They must also mitigate risks to their critical electric power sources.

The specific objectives for petroleum producers include:

a. Reduce self-consumption of fuel

b. Minimise their carbon footprint

c. Improve their power factor

d. Reduce maintenance expenses, and

e. Increase system reliability.

The critical nature of oil & gas sites means operators typically run pairs of diesel engines or gas turbines to ensure system redundancy and reliability. In case one of the generators trips, the other unit can cater the full load. This results in the power generating equipment operating at a much lower point on its efficiency curve – leading to higher fuel consumption and increased emissions.

Growth of hybrid energy solutions

The advent of competitive Solar Photovoltaic (PV) solutions, coupled with the trend towards behind-the-meter (BTM) Battery Energy Storage Solution (BESS) technology, has provided an increasingly attractive option for microgrid deployments in the oil & gas industry.

A hybrid solution with Solar PV and BESS can not only lower diesel and gas consumption, but also provide Health, Safety and Environmental (HSE) benefits by minimizing the need to handle a high volume of fuel during transportation.

Integrating Solar PV and BESS technologies into a microgrid means switching over to a clean power source that has minimal GHG emissions. Diesel, by contrast, produces ~3.2 kg of CO₂ per liter of fuel consumed. This translates into environmental responsibility and a social license to operate, which are especially important for oil & gas firms operating in environmentally-sensitive locations.

Advancement of battery storage technology

As a leading global technology provider, Honeywell’s renewable energy solutions make it possible to produce energy more efficiently, reliably and economically, while reducing the environmental impact and improving safety and regulatory compliance. Honeywell is focused on helping plant owners and operators make the most of new, smarter technologies and guiding them towards best practices for energy management.

Honeywell’s end-to-end renewables operation platform consists of a state-of-the-art, multiple megawatt-hour BESS solution, a cloud-enabled Supervisory Control and Data Acquisition (SCADA) system, Remote Terminal Units (RTUs), and advanced battery scheduling and peak prediction software. Key to the overall solution is an intuitive Human-Machine Interface (HMI) for system operators and high-level dashboards for end-user executives.

Oil & gas operators relying on traditional power supplies can realize important economic and environmental benefits by implementing Honeywell’s BESS solution to provide electrical power security. Utilization of BESS technology helps reduce the need to bring additional, non-renewable power generators online, improving grid stability while decreasing supply costs.

With Honeywell’s approach, a remote oil & gas facility can maintain redundancy as BESS operates in parallel with traditional generators as a hot standby. Should a generator trip, the BESS seamlessly takes over the baseload to avoid any power disruption. The system enables restarting of the tripped unit or initiating back-up gen sets and then returns to hot standby mode.

Honeywell’s BESS solution can eliminate the need for redundant gas turbines – and the associated high gas consumption rate – and functions much like a spinning reserve for electric power resources. Experience has shown that running a single gas turbine leads to reduced fuel consumption and decreased emissions output.

Oil & gas companies can also rely on Honeywell’s Energy Management System (EMS), a microgrid controller utilizing both fossil and renewable energy generation, to optimize their savings in electricity usage. The EMS controls the entire energy operation in real-time, ensuring utmost efficiency in meeting a site’s power consumption needs. Additionally, it can communicate with a SCADA system to provide expanded visualization of operating statuses.

Deployment of remote operations capabilities

As part of a comprehensive energy storage solution, Honeywell provides turnkey project delivery, including fully integrated battery energy storage systems and Engineering, Procurement and Construction (EPC) services, as well as a long-term Operations & Maintenance (O&M) services agreement.

Honeywell has the unique capability to operate and maintain battery energy storage systems from a central remote operations center (ROC). This ROC is intended not only to monitor BESS health and status, but also control the physical operation of these assets on a remote basis.

The ROC provides expertise, skills and technology resources that may not be available on site. This remote collaboration, optimization and operations solution helps to manage critical assets, regardless of their physical location, so that operators can securely access all data, seamlessly deliver information when and where it’s needed, create and monitor crucial operator parameters for decision support, and enforce consistent operational and business processes.

Honeywell’s remote operations specialists employ proprietary Artificial Intelligence (AI)-based peak prediction and value stack optimization algorithms to automatically start battery systems to maximize savings for the end-user. They also utilize advanced control technologies to enable precise battery dispatch along with network security and cybersecurity protection. Predictive analytics are used to optimize asset maintenance strategies.

Utilization of energy storage as a service

Honeywell has launched an ambitious energy storage program to help Commercial & Industrial (C&I) customers, such as oil & gas operating companies, achieve electricity bill savings and improved sustainability and resiliency.

Honeywell’s program is based on the concept of Energy Storage as a Service (ESaaS), which involves the deployment of advanced energy storage and management systems under a fee-for-service, shared savings, or management model rather than a direct purchase of the asset by the end-user.

Under the ESaaS model, the end-user has no financial outlay for the battery storage system, and all compensation is determined on a percent of energy savings basis. The energy storage firm owns the battery system and takes full responsibility for the equipment over the life of the asset.

Honeywell offers performance guarantees customized to the specific objectives of the end-user. It’s a process that involves collaboratively identifying and quantifying Key Performance Indicators (KPIs). If Honeywell achieves and/or exceeds the KPIs, there’s a financial incentive –and there are consequences if it falls short. As one example, KPIs can be focused around managing Global Adjustment (GA) charges by delivering kilowatt or megawatt hours of energy during the top coincident peaks each year. A coincident peak is a facility's demand during the time when electricity demand system wide is the highest.

Honeywell uses AI-based proprietary software to predict when the top peak hours will occur and moves the end-user’s load from the grid onto batteries during these periods of time. When the grid operator does an annual review, they will not see the load on their grid during the aforementioned times. The end-user’s facility still operated during the peak periods, but it was running off batteries – not on grid power. This approach can save millions of dollars annually by enabling battery utilization at the right time.

Improvements in business performance

For oil & gas operating companies, an integrated energy storage and management solution, along with an ROC capability for distributed assets, drives profitability and sustainability with guaranteed outcomes.

Site operators choosing to implement this solution can benefit from:

1. Reduced electricity costs.

2. Improved business continuity during grid disruptions or outages.

3. Reduced back-up and emissions from captive power plants.

4. Increased procurement of renewable energy and utilization of self-generation.

Ultimately, this approach can reduce reliance on non-renewable sources of power while providing greater resilience and reliability for the customer or energy storage system host. In addition, power factor improvements can help provide important economic gains.

In some countries, oil & gas companies can even take advantage of tax credits associated with capital projects and the implementation of an effective emissions reduction strategy.

Conclusion

Experience has shown that an effective energy management solution using a BESS and operations platform makes it easier to anticipate and manage demand and energy usage in today’s complex energy ecosystem. Honeywell’s battery energy storage systems, software solutions and outcome-based performance guarantees help oil & gas companies optimize their operations and help to realize cost savings and greater efficiency, reliability and sustainability.