Visit windpowermonthlyevents.com for the latest on our upcoming conferences and webcasts

Norway

Norway

Little support for alternatives -- Norwegian market on hold

After effectively ending current chances for a common Swedish-Norwegian green energy certificates market, Norway's red-green coalition government has told unhappy wind developers that it will shortly devise a better market structure. Prime Minister Jens Stoltenberg insisted in early March that the proposed cross-border certificates market was simply too expensive for Norwegian electricity consumers, who are used to low prices for electricity-intensive home heating, as well as for industry.

Arne Jakobsen of Green Stream Networks, based in Oslo, says green certificates would have cost Swedish consumers much more than their Norwegian counterparts. Green Stream estimates that in 2007, the first year the common market was scheduled to be operational, Norwegian households would pay an extra NOK 51 (EUR 6.3) a year for their electricity and Swedes would pay an extra NOK 392 (EUR 49).

Gas plant announced

Requiring consumers to buy green certificates creates a competitive market for the sale of electricity from renewable sources. But according to Norway's oil and gas minister, Odd Roger Enoksen, who led the failed negotiations with Sweden, beefing up ENOVA, the country's renewables funding organisation, is a better way to support renewable energy production and efficiency measures.

Perhaps not coincidentally, just days after Stoltenberg's announcement, Norway's state-owned Statoil and partner Royal Dutch/Shell revealed plans for a new 860 MW gas power plant, which the government has said must include CO2 emission capture. To cover the major extra costs, the government is picking up part of the tab, though it has not said how much. "Despite the fact that parliament, NGOs and industry supported the green certificates, still they managed to stop the plan," Jakobsen says. "Instead we have a new gas-fired plant, and a cleaning bill that will have to be paid for by taxpayers. I think this assures a slower development of renewables."

Pressed on how Norway will fill its future energy gap with investment in wind projects faltering, Enoksen told daily paper Aftonposten that there are three possible options: a Norway-only certificates market; a guaranteed price for energy produced; or increased funding to ENOVA for a system of investment support. "Those who intend to invest in wind power have no reason to wait," said Enoksen.

In limbo

Developers remained unconvinced. One of the largest, Norsk Hydro, has over 400 MW of plans in limbo (Windpower Monthly, March 2006). "We are of course, very disappointed," says Jonny Sorensen, CEO of Norsk Miljokraft, which has building approval for 200 MW in Kvitfjell, 225 kilometres north of Oslo. "To work, a subsidy must be twenty-five percent of the total project's investment. I fear the government wants more control and not so much wind power development." The result, Sorensen says, is that "only state-controlled companies and municipalities will be able to invest. There will be no free-market wind industry."

Jakobsen says Norway could make its own certificate market work. Production support similar to the German model could also work, though the political risk for investors is higher, he adds. But simply adding funds to the current system is not useful. "It's a very poor solution, though I fear that's what is going to be proposed," Jakobsen says. "It is some new jobs for ENOVA and not much more."

Kurt Benonsisen at utility Nord-Trondelag Elektrisitetsverk says the loss of the green certificate market does not affect plans for the company's 45 MW project at Hundhammerfjellet, which is already under construction using 15 Scanwind 3 MW turbines. Two demonstration 3 MW units already operate at the site. But with the huge, already-approved 249 MW project on the island of Ytre Vikna, it is a wait and see situation. "We are optimistic," Benåsisen says. "We have to be optimistic."

Have you registered with us yet?

Register now to enjoy more articles
and free email bulletins.

Sign up now
Already registered?
Sign in

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus

Windpower Monthly Events

Latest Jobs