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Norway

Norway

Two big projects and more to come -- Norway's huge boost

Norway's wind industry put on an impressive spurt last year, pushing up installed wind capacity to around 100 MW from under 20 MW at the start of 2002, according to the state Water Resources and Energy Directorate (NVE), the government licensing authority. The addition of two 40 MW projects accounted for the boost: a wind plant of 2 MW Bonus turbines on the island of Smøla, the first phase of a planned 144-150 MW project; and the Havøgavlen project of 16 Nordex 2 MW machines.

Not only is the Smøla project blazing a trail because of its size, but also because of its power purchase agreement. The developer, state-owned utility Statkraft, negotiated a 15-year deal with Dutch power company Nuon for the export of green certificates from Smøla I, together with all the power generated by the facility. Statkraft says Nuon is buying an amount of energy equivalent to the wind output through the NordPool power exchange. Nuon also has the rights to buy power and certificates from Smøla II and from a planned 56 MW Statkraft development on the nearby island of Hitra. Both projects are expected to be completed this year or early next.

Also in advanced planning is Norsk Miljøkraft's 200 MW development at Kvitfjell. It is currently looking for investors amid efforts to iron out planning disputes. Meantime, Nord-Trøndelag Elektrisitetsverk (NTE) intends to install Scanwind's 3 MW test turbine, developed together with Siemens, at Hundhammerfjellet, the site of its proposed 34-45 MW project, within the next few weeks.

NVE reports it has received applications for development of more than 1400 MW of wind power in projects raging from 20 MW to 189 MW. Of these, the three largest players are Statkraft, applying for 505 MW, Nord-Trøndelag, applying for 350 MW and Norsk Miljøkraft, applying for 180 MW. "We expect ten to 20 new projects ranging from 10-15 MW to 200-300 MW," says NVE.

Reasons for this burst of wind activity in Norway are hard to pin down. Even NVE admits it finds government policy on wind "confusing" following the arrival of a new energy agency, Enova, which seems to issue "one strategy one day and another two weeks later." Norway, however, is in the grip of a dire power shortage, brought about by lack of water in its hydro reservoirs and aggravated by aggressive export last year of surplus electricity on long term contracts. Spot prices have been driven to record levels and the country has been suffering a near state of emergency during a colder than average winter. More power capacity is needed, particularly as Norwegians are almost entirely dependent on electricity for domestic heating.

Wind power is obvious

Nordex's Felix Losada feels the industry is well ahead of the government in assessing and responding to the energy crisis. "Norway cannot build more hydropower plants because of environmental objections and at the same time it has to fulfil its obligations under the Kyoto protocol," says Losada. Wind power, he adds, is an obvious way out of this dilemma. What's more, the green credit trade with Nuon for the Smøla plant is showing other developers that an early entrance to Europe's fledgling market in renewable energy certificate trade can be made through Norway.

But it will take more than a spike in Norwegian prices to make wind power commercially viable under current conditions, at least according to Statkraft. "We do not have the investment support in Norway to produce wind power economically without an established system for trading green certificates," says the utility's Nils Daarslot. In the absence of a harmonised European market for green power certificates, he says, long term contracts such as Smøla, tortuously negotiated on a one-to-one basis, are the only way to profitability. Norway offers capital subsidies for wind development which have averaged 20-25%, but Enova is considering a series of new support measures (Windpower Monthly, October 2002), including a renewables obligation facilitated by green certificate trade.

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