Annual production of Smøla I, Norway's largest wind plant and made up of 20 Bonus 2 MW turbines, should be around 120 GWh -- enough for some 6000 average Norwegian households, says Statkraft, or 30,000 Dutch houses says Nuon. Houses in hydro-dominated Norway mainly have electric heating. Nuon will be buying the entire output of the plant.
The Norwegian green certificates -- which will be imported along with the power -- will be sold to Dutch consumers under Nuon's Natuurstroom (natural electricity) label, one of the two green power brands the company sells on the Dutch market. Natuurstroom comprises 78% wind, while the cheaper Groenstroom (green electricity) is almost 100% biomass. Nuon supplies some 450,000 of the Netherlands' 1.3 million green power customers with more or less equal shares of the two brands.
"We are buying the certificates to meet our customers' needs," says Nuon's Bart Sikking. "The reasons for investing are twofold. First, it's our strategy to increase our installed wind capacity to 2000 MW by 2005. Second, its part of our philosophy to support the environment not just by trading in green energy but also by putting equity in new wind capacity and so enlarging the total production base."
Right to the future
In addition to the entire output of Smøla I, the deal also gives Nuon the right to the certificates and power from the proposed 110 MW Smøla phase II farm and a 56 MW wind farm on the nearby island of Hitra -- a total of 206 MW. Hitra is scheduled for completion in 2004 and Smøla II, for 2005.
Nuon is also examining the possibility of investing in the new projects, says Sikking: "As far as the Statkraft wind farms are concerned, we have an option to invest in the wind farms, but the final decision will depend on the size of the Norwegian government's support for the projects. Nuon is already taking enough risk by buying the certificates for a period of 15 years." says Sikking. Proposals for Norway to cut capital subsidies of wind plant from 25% to 10% is part of the perceived risk.
Sikking will not comment on the total value of the deal, but says the certificate purchase will be economically viable even without the Dutch subsidy of EUR 0.02 kWh paid to producers of green power. This production subsidy, which was payable to foreign as well as domestic producers, has now been scrapped to prevent Dutch tax revenues flowing abroad and replaced by an incentive restricted to Dutch producers.
The deal with Statkraft was certainly influenced by the turmoil in the domestic market, says Sikking. "But Nuon is constantly searching for opportunities abroad to invest in new high-quality capacity in order to secure the green energy supply to our green customers."
For Statkraft, Smøla I represents a first step towards the company's target of generating 2 TWh from renewables by 2010.