When the government came to power it immediately foiled plans for a combined market with Sweden for trade of green energy certificates, which would have provided the financial basis for wind development. Instead it promised to devise a market structure "equal to or better" than Sweden's. After months of waiting, a plan was released in October: developers could expect a 15-year purchase price subsidy of just NOK 0.08/kWh (EUR 0.01/kWh), to start in 2008.
Plans for wind development were immediately shelved by large and small companies alike. Meantime, 51 MW was installed during last year in two projects, to bring Norway's total to 325 MW (table next page).
Though Norway's wind resources are among the best in the world, the country's target of 3 TWh of wind production by 2010 will not be met under current circumstances, says Harald von Heyden of the recently-formed Norwegian Wind Energy Association. "These are very, very hard times for clean, renewable power," he says. "Just like with George Bush in the US, Stoltenberg's power base seems to always come back to the gas and oil industry." Von Heyden says he believes Stoltenberg has fallen for a vision of "clean" and CO2-free gas fired power stations. That is less economically feasible than building wind, he points out.
Despite the market hiatus, Norway's Water Resources and Energy Directorate (NVE) recently granted concessions to five new projects with a combined capacity of 388 MW. But of the 1.5 GW of capacity spread over 21 projects granted permits by NVE in recent years, less than 30% has been realised. Steinar Bysveen of the national electricity industry association says this is no surprise. He says it costs about NOK 0.50/kWh (EUR 0.06/kWh) to produce electricity from Norwegian winds. With market prices for electricity running at NOK 0.35/kWh, developers would lose about NOK 0.07 for every kilowatt hour they generate given the low subsidy, he says. "There are only two possibilities: the long term [market] price increases -- not very likely -- or the government strengthens the support scheme."
One project that may get built is Ytre Vikna, which the government gave the go-ahead to in October and has granted a NOK 150 million (EUR 18.5 million) capital subsidy. It started life as a 249 MW project of up to 99 turbines on one of a group of islands off Norway's north-west coast, but has been reduced to 70 MW following a decision by development company Sarepta Energi, owned by Nord-Trondelag Elektrisitetsverk (NTE) and Norsk Hydro, to pull out, citing lack of profitability.
Ytre Vikna is seen as important because of its proximity to the power-hungry middle portion of the country. Furthermore, NTE owns 97% of the intended turbine supplier, Norwegian Scanwind, and wants to see the project go ahead, says Bysveen. Scanwind's Jorn Lunde has not given up hope. He is expecting to start negotiations with NTE soon on supply of the Scanwind 3.5 MW turbine, a permanent magnet synchronous generator design, which has given the company some teething problems. Four of the turbines are being tested at another NTE project, Hundhammarfjellet, with another 11 to be installed there by the end of the year. The 38.5 MW from those turbines may be the only wind megawatts to join Norway's grid in 2007.
Huge state-run Statkraft, owner of 245 MW of wind plant in Norway, including the 150 MW Smøla wind plant, the country's largest, has given up on its domestic market. It is in joint ventures for developing seven wind projects in the UK. Norway's Fred Olsen Renewables, already a major developer in the UK, is of like mind, thought it has over 1000 MW of projects in Norway awaiting permits. "It would have to be something miraculous for things to change right now," says the company's Terje Askvig. "But in another two years there is another election. I think one day we are going to construct wind projects in Norway. We need the energy, especially in mid-Norway. There are big drivers at work here and some day it is going to happen."