This may cost – E24

In the coming years, Norway will need a lot of energy for climate measures.

Statnett believes Norway needs up to 80 terawatt hours (TWh) more electricity in a scenario with extensive electrification in, among other things, the oil industry and the transport sector, in addition to large hydrogen production.

Most politicians believe that onshore wind power is necessary and has facilitated further development. But several wind projects face resistance.

Opponents believe there are good alternatives to wind power, which produced around 5.5 TWh of power last year and is expected to produce around 15 TWh in the long term.

E24 has tried to find out how much power these options can deliver and how much they will cost. Here are some of the frequently mentioned options:

• rehabilitation of hydroelectric plants
• energy saving in buildings
• development of offshore wind energy

All these measures can reduce the need for onshore wind energy. At the same time, each of them could cost the state and taxpayers billions of crowns in the form of state aid or tax cuts.

This is happening at a time when the state will already have to set stricter priorities.

Believes that hydropower can provide 5 TWh

The power industry has long wanted to change the tax on hydroelectric power, so that normal returns are more protected from the land income tax. It can make hydropower upgrade more profitable.

AND proposals from Energi Norge and various other organizations it should be able to provide five terawatt hours (TWh) of additional annual energy supply within ten years, without major new invasions of nature.

– I think we have to try to use as much power as we can where interventions have already been made in nature, says Parliamentary representative Lene Westgaard-Halle (H) to E24.

– Unfortunately, there is not much potential in hydropower, but we should bring those up to five TWh that we can extract extra. So I think we should make some changes to the energy tax regime, he says.

Many opponents of wind power refer to NTNU’s Leif Lia, who has claimed that at least 15-20 TWh of electricity can be extracted from hydropower. However, the government has rejected these estimates.

– I think the teacher’s figures are not realistic. The NVE figures show the potential is much lower, closer to 6 TWh, he said. then Minister of Oil and Energy Kjell Børge Freiberg last year.

– Most of this potential are expansions that can have environmental consequences in line with new developments, for example, transferring water from another watercourse. Many recall, for example, the expansion at Øvre Otta, which was a conflict-ridden subject, Freiberg said.

It costs the state billions

According to a note from Thema Consulting, Energy Norway’s tax proposal will increase municipal and county revenues by several billion per year over time.

However, the state lose around a billion kronor a year the next decade in such a shift (see figure).

In that case, the state should cover this, for example, by cutting services offered to citizens or increasing taxes for citizens.

Streamlining can save a lot

Saving energy in the construction sector is often referred to as an alternative to developing more wind power.

According to Sintef, among others, Norway can save 10 TWh of electricity in Norwegian buildings in a few years with a few simple steps. Energy consumption in Norwegian buildings is currently around 85 TWh per year.

The measures may be the replacement of glass or insulation, or the installation of heat pumps and solar cells. However, estimates are lacking as to what this will require in the form of investments, state aid and tax breaks.

Sintef has produced a report that estimates that a more efficient building stock will save 6 TWh of electricity by 2050. In the most ambitious scenario, 29 TWh of electricity will be saved by 2050.

– In that case, it means that we use the best available technology for both construction and rehabilitation quite quickly, says lead researcher Nina Sandberg at Sintef at E24.

– How much will it cost the state to save, for example, 10 TWh on the stock of buildings?

– Unfortunately, we have no figures for that. We have not yet had space in our projects to count on it, he says.

– It is also difficult to know what the additional cost is for using the most energy efficient technology. This must be done thoroughly to gain a well-founded scientific basis for making trade-offs between saving energy and producing new energy, says Sandberg.

– What do you imagine it takes to trigger this?

– I believe that it will be necessary to establish more stringent requirements for new buildings and support plans that can generate energy savings in existing buildings. We have seen that Enova’s various schemes have been very effective, says Sandberg.

May require billions of support

Cost:

The most recent cost figures E24 has found come from a 2009 Sintef report that said Norway could save 10 TWh of electricity in Norwegian buildings by 2020 if the state generated NOK 1.6 billion a year in state aid from 2010 and gradually increases to 2.6 billion a year in 2020.

There is a lack of more recent figures, but figures for 2009 show that energy savings will also cost the state many billions of crowns. In that case, it is money that politicians must cover in their budgets.

However, the benefits can also be great. Zero wrote in a report in 2017 that the socio-economic returns from a major investment in energy efficiency in buildings could be NOK 80-90 billion until 2030.

Offshore wind can demand billions in subsidies

Another alternative to wind power that many point to is the expansion of offshore wind power. A major investment in offshore wind energy has been supported by, among others, the Norwegian Shipowners Association, the Electricity and IT Association, MDG, the Labor Party and the Aker system.

The development opportunities in the North Sea are enormous. Two areas have been opened to offshore wind power, but the licensing system has not yet been completed. The Storting has asked the government to create a financing scheme for offshore wind power.

However, offshore wind is much more expensive to develop than onshore wind, and so far it is not profitable without subsidies. Many countries spend a lot of money providing a guaranteed energy price to developers.

– There is a very great potential in offshore wind energy. In Norway, there is a technical potential for many times energy consumption. But offshore wind is still more expensive per kilowatt hour than onshore wind or hydropower, even though costs are falling. Equinor’s Dogger Bank project, for example, will be scaled up to around 40 øre per kilowatt hour, Sintef chief researcher John Olav Tande tells E24.

He cannot say how much offshore wind will cost on the Norwegian shelf, because no projects have been developed yet. There is also a difference between floating and fixed bottom offshore wind power.

– Most projects internationally are set in the background and the cheapest cost around 40 øre per kilowatt hour. It’s not unreasonable to think that offshore wind power in Norway’s most favorable locations could compete on price within ten years, Tande says.

Several players expect Norway to have an electricity price of 30 to 40 øre per kilowatt hour in the coming years.

– Floating offshore wind energy is still in an early stage. Norway is in a close position there. Today’s pilot plant costs can be around NOK 1.50 per kilowatt hour, but with innovation and the development of a supply chain, this can be reduced to around 50 øre in ten years, Tande says.

Offshore wind may require billions in aid

Cost:

A Menon report last year indicated that the development of two larger wind farms on the Norwegian shelf of 500 megawatts each they demand subsidies of NOK 36 billion. The Norwea trade association has Support needs estimated at 3 to 4 billion NOK by year.

In that case, the Storting must find coverage for this in their budgets.

– It is not cheap?

– I think you should be able to build cheaper projects than Menon has planned in his report. This is also an investment that will be made to develop the Norwegian supplier industry and export capacity. That way, you can wonder if you can afford not to, says Tande.

“Inadequate” to abandon climate goals

A joker in the wind energy debate might be to abandon Norway’s climate goals. But the political majority is behind the goals.

Without any climate goals, Norway could, for example, have stopped using 10 to 12 terawatt hours of electricity for electrification on the shelf. Industry and agriculture would have avoided spending and less energy would have been needed.

– It is completely irrelevant, with several exclamation marks behind it, says Westgaard-Halle.

– It is not only about climate, but also about creating value and change in business. Financial markets change and they go into green businesses, and if we hit the road in Norway, we will lose business opportunities and lose money, he says.

By abandoning the climate goals, Norway would rank among the few states not party to the Paris Agreement: Angola, Eritrea, Iran, Iraq, Libya, South Sudan, Turkey and Yemen. In addition to these, the president of the United States has also indicated that he will withdraw the country from the agreement.

Norway is committed to the EU’s climate targets and must follow through with cuts. Otherwise, Norway could face various types of sanctions from the EU.