New Norway – Scotland electricity cable proposed

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The North Connect Consortium plans to apply for a Norwegian licence to the Norwegian energy ministry for its planned interconnector between Sima in Norway and Peterhead in Scotland. The cable would make it possible to export the large electricity surplus in Norway and to import wind power from Scotland to Norway. It is estimated that the net annual power exports from Norway could be between 5-9 TWh.  

Industrial relationship

NorthConnect is a project company owned by four partners in Norway and Sweden. The companys directive is to plan, build and operate an cable interconnector between Norway and the UK. The project is now preparing for an application to the regulator for a financial arrangement which governs revenues on the 650km interconnector. The NorthConnect partners strongly feel that the project offers good value to the UK consumer and once built would help forge a strong complementary industrial relationship between Scotland’s world class wind sector and Norway’s hydro capacity.

On the Scottish side of the project, the development team is now preparing a planning application for subsea infrastructure works and near shore connections on the Aberdeenshire coast. These offshore works, if consented by Scottish Ministers, would hook up with the already consented onshore electricity converter station near Boddam and Longhaven.

Inclusion of a fibre-optic cable

The NorthConnect consortium is also assessing the feasibility of laying a fibre optic broadband link, alongside the power cable, to connect the north east of Scotland and Norway.

NorthConnect has investigated the inclusion of a repeaterless fibre-optic data cable in the project, and initial findings show it will be technically feasible and very cost-effective when combined with the power cable design, manufacture and subsea installation. The commercial aspects are being examined further, but NorthConnect has a unique geographic advantage where it meets the Norwegian and UK coastlines, crossing strong, existing fibre-optic links.This will also provide a significant opportunity to Norway and Scotland for the development of data-centres.

EU – Network Development plan

NorthConnect has been included in the EU’s 10 year Network Plan and ranked among the most important projects with PCI (Project of Common Interest) status for Socio-Economic welfare, CO2 reduction and integration of renewables across Europe.

The projects are ranked and scored across a number of technical, environmental and economic criteria, and NorthConnect shows up as one of the highest rated projects in Europe for Socio-Economic Welfare, CO2 Reduction and Integration of Renewables. A number of other independent studies over the past 3 years have also shown very high welfare value, carbon savings and renewables facilitation for up to 4.5 Gigawatts of interconnection between Great Britain and Norway.

The rumours are true – Norway and Scotland have an affair !

Renewable Energy Technology Development: Short Term Policy Recommendations for Nordic Countries

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There is a clear technological and economical pathway for the Nordic region to push towards a more near carbon-neutral energy system in 2050. The Nordic countries want to send a strong signal to the global community that the ambitious aims of the Paris Climate Agreement are achievable. This is the conclusion from the; Nordic Energy Technology Perspectives Report 2016 – from The International Energy Agency and Nordic Energy Research.

The ambitious pathway outlined by the Nordic countries, who specifically wants to act in four key areas:

  1. Strengthen incentives for investment and innovations in energy technologies.
  2. Boost European cooperation on grid infrastructure and electricity markets.
  3. Reduce process-related emissions in industry
  4. Accelerate transport decarbonisation

 

1.Strengthen incentives for investment and innovation in energy technologies.

The Renewable Energy Policy should accelerate the  roll-out of key flexibility technologies and  incentivise their utilisation for flexibility through market mechanisms and regulation. Markets must also adequately compensate flexibility services such as demand response in industry and  buildings, as well as the flexible operation of small power plants. Information technology (IT) infrastructure (smart meters) and IT platforms (consumer Apps or control systems) will be important  in achieving a rapid penetration of these flexibility services.

2. Boost European cooperation on grid infrastructure and electricity markets.

Coordinated effort to strengthen domestic grids and install new transmission lines is needed to  establish the future Nordic and European electricity system (‘The Green Battery Strategy’).  Regional collaboration on infrastructure planning is needed to ensure optimal investments and avoid bottle-necks in the grid. Coordination among Nordic governments is vital to ensure that policy accelerates  technological and regulatory progress in order to reduce total costs. Cooperation in reforming the common Nordic electricity market to allow greater flexibility and accommodate higher shares of variable renewables will also be important.

3. Reduce process-related emissions in industry.

The Renewable Energy Policy should take steps to ensure long-term competitiveness of Nordic industry while reducing process-related emissions. More variable and potentially higher electricity prices will put additional pressure on energy-intensive industry in the Nordic region, stressing the need to step up low-carbon industrial innovation. Governments should act to reduce the risk of such investment and use public funding to unlock private finance in areas with significant emission reduction potential.

4. Accelerate transport decarbonisation.

Even as Nordic countries pursue different technology strategies in parallel, they should not wait to draw on  the wide range of available policy instruments to stimulate fuel efficiency, low carbon technologies and shifts to more efficient transport modes. Governments should build upon positive experiences with measures such as congestion charging in urban settings, differentiated vehicle registration taxes, bonus-malus regimes, and altered parking fees, while also stepping up investments in infrastructure  for cycling, public transport and rail. Policies should also incentivise modal shifts from road freight to sea and rail, and from cars to public transport and cycling.

Nordic and European collaboration on energy policy can play a role to reach the ambitious aims of the Paris Climate Agreement.

Could Norway become a hydrogen nation?

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Local businesses in Narvik says yes – we both can and shall become a green hydrogen nation. “Let’s use the surplus and trapped renewable energy to produce hydrogen – and distribute the hydrogen and make it accessible to growing zero emission markets in Norway and the rest of the world”. This is the conclusion from the Hydrogen meeting in Narvik arranged by Narvik Science Park.

The Renewable Energy Directive 

The EU Renewable Energy Directive establishes an overall policy for the production and promotion of energy from renewable sources in the EU. It requires the EU to fulfill at least 20% of its total energy needs with renewables by 2020 – to be achieved through the attainment of individual national targets. All EU countries must also ensure that at least 10% of their transport fuels come from renewable sources by 2020.  In November 2016, the Commission published a proposal for a revised Renewable Energy Directive to make the EU a global leader in renewable energy and ensure that the target of at least 27% renewables in the final energy consumption in the EU by 2030 is met.

National action plans

The Directive specifies national renewable energy targets for each country, taking into account its starting point and overall potential for renewables. These targets range from a low 10% to a high of 50%. EU countries set out how they plan to meet these targets and the general course of their renewable energy policy in national renewable energy action plans – and the progress towards national targets is measured every two years when the EU countries publish national renewable energy progress reports.

The Directive promotes cooperation amongst EU countries and with countries outside EU (Norway) to help EU meet their renewable energy targets.

Norway – Hydrogen nation?

Norway would have a close cooperation with EU and will adapt to the Renewable Energy Directive by making national plans for Norway – especially for Hydrogen, where Norway would start to make a strategy for Hydrogen production and establishing Hydrogen Fuel stations  across the country from January 2017.

Norway is in a unique position as it has a surplus of renewable energy production, annually 20 Terrawatt hours, and limited grid capacity for export – which means trapped renewable energy production that could be used for Hydrogen production. There also exists a political will to support energy intensive industries such as hydrogen production. This means that hydrogen could play a significant role in the future – both as export of hydrogen and as fuel for national land transport (Network of Hydrogen fuel stations).

Hydrogen meeting in Narvik

The Narvik Hydrogen meeting was arranged by Narvik Science Park in cooperation with the Hydrogen production company; Glomfjord Hydrogen and the Hydrogen technology company; NEL Hydrogen – just to look into the interest for establishing Hydrogen fuel stations across Norway – and the local businesses interest for investing in Hydrogen fuel stations. 20 local companies say yes to hydrogen technology solutions and that Norway should become a hydrogen nation.

From Spring 2017 there would be a close cooperation between Narvik Science Park and ENOVA – to look closer into how local companies can contribute to investments in hydrogen technology solutions and establishing Hydrogen fuel stations in the Narvik region – as a bit of a national plan to become a hydrogen nation.

New energy and climate technology in Norway

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New technology in general, and energy and climate technology in the industry in particular, has been subjects of increased focus for the Norwegian Energy Department and ENOVA in 2015. The goal of the technology projects is to harvest experience that will contribute to expertise development, innovation and spread of the technology – both nationally and internationally. ENOVA’s role is allowing new technologies to be tested in the market, and then the market can determine the winners. The GREBE-Project would follow the development and results of this programme closely.

ENOVA was established in 2001 in order to drive forward the changeover to more environmentally friendly consumption and generation of energy in Norway. ENOVA promote more efficient energy consumption and increased production of ‘new’ renewable energy via targeted programmes and support schemes.  A number of energy and climate and projects received support in 2015.

Technology projects often have relatively modest energy results compared with the support they receive. Untested and immature technology will usually be significantly more expensive than standard solutions. The support need will therefore also be higher than for projects based on well-tested technology. The total, direct energy result for 2015 is thus modest compared with the support of NOK, but these projects are expected to result in long-term ripple effects and positive effects for the climate.

Selection of the 10 largest projects within energy and climate technology 2015:

  • Wave4power AS – Full scale demonstartion of 100kW wave power buoy
  • Agder Energi Vannkraft AS – Small scale power turbine
  • Kildal Kraft AS – Mini power station installed in container
  • Lyse Elnett AS – Grid technology – reduction of grid loss
  • NEL Fuel Norway AS – Energy efficient hydrogen filling station
  • Eidsvik Offshore ASA – Installation of energy system (battery) in supply vessels.
  • Glencore Nikkelverk AS – One-stage electrowinning process
  • Arba Follum AS – Production of bio-gas
  • Tizir Titanum AS – Verification of new furnace technology
  • Posten Norge AS – Low-energy logistics building based on RE

Development and introduction of New energy and climate technology in the market  – in 2015 a total of 54 projects were granted funding commitments from ENOVA.  Overall, this amounted to NOK 1,4 billion.

Climate Agreement in the Storting in 2012 

The development of new energy and climate technology is very important in order to solve the global climate challenges. However, these new technologies must reach the market in order to have the desired impact.

In the Climate Agreement in the Storting in 2012 – the Storting look upon the primary goal of investment in new energy and climate technology as investments that should contribute to reducing greenhouse gas emissions and support the development of restructuring energy end-use and energy production in the long term by developing and utilizing technologies and new solutions – that can contribute to this.

With its capital base and proximity to the market – they saw ENOVA as a instrument to bring technology initatives from the pilot phase and over to market introduction.

From 2012 ENOVA has the responsibility for management of the Energy fund. The Energy fund is the instrument that the Stortinget suggested as a solution for getting ideas and pilot projects on their way to market.

From the pilot phase – to market

The way from the pilot phase to the market – is a critical phase for the projects, where they will demonstrate to the market that the technology functions under normal conditions. This is also a capital intensive phase. When ENOVA awards support to technology projects, this is with the expectation that many of them will be successful, but not all.

Making it through the critical introduction phase is no guarantee for success in the market. Some technologies succeed and gain a foothold which can be built upon. However, for many technologies, the first encounter with the market will reveal a need to test new approaches and concepts, which may entail having to take one or more steps backwards in the innovation chain. Other technologies are weighed and found wanting in the competition with other technological solutions.

The Norwegian Government use public capital to trigger private investment for early stage innovative industry.

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The need for pre-seed funding and Business Angel Network has never been bigger in Norway, as it has become harder for early stage companies to mobilize private investors. The Norwegian Government has now accepted to use public capital to trigger private investment for early stage innovation – by establishing pre-seed funding and Business Angels Network.

The Business Association of Norwegian knowledge and technology based enterprises (Abelia) has for several years argued that the Norwegian Government should establish a new pre-seed scheme to mobilize private capital for early stage innovation. This argument has been supported by the Association for innovation companies in Norway; FIN – and they have together presented a proposal for the Ministry of Trade. The Government has now accepted the proposal – and explain this with the ambition to ensure that entrepreneurial businesses grow faster and succeed internationally at a time when the Norwegian economy need it.

The Ministry of Trade is interested in strengthening the incentives for moving private capital earlier along the startup chain, without generating more bureaucracy. For this reason the organizing of the pre-seed funding is done without establishing new organizations or structures – but by using the public agencies of TTO and incubators (NOK 50 millioner) and (NOK 48 millioner) to private investment fund to start up Business Angel Funding in Norway.

The Business Associations are very happy with this solution and see this as a strategy to make sure the incentives ultimately  benefits the targeted groups of startups. They see activation of private capital as a good thing and that this is the most effective path to get more value out of the significant investments already made in public research and development.

The problem for the startups in the NPA region – is that little of the pre-seed funding goes to Northern Norway, and nothing of the Business Angel funding. This is what we call an Mattheus-effect: They who already has capital funding- would get more, and they without would get nothing (or small amounts).

Is this a policy framework issue – that is similar in the NPA regions – and something that should be highlighted by the GREBE-Project?

White paper on New Norwegian energy policy

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The Norwegian government has this spring presented a White Paper on energy policy – ‘Power For Change – An Energy Policy Towards 2030’. The main message is that security of supply, consequences for climate and economic growth must be considered together to secure an efficient and climate friendly energy supply.  17 years have passed since the Parliament last received a broad overview of the development, status and perspectives of our national energy supply. Since the last White Paper in 1999, the energy markets and the policies of the countries around us have changed considerably. There now exists an international commitment to enhance efforts on emission reductions and climate adaption.

The renewable energy resources and a well-functioning energy sector are competitive advantages for Norway. An efficient energy market and access to reliable and clean renewable energy is crucial for a climate-friendly energy supply. The new Norwegian energy policy will enable increased use of renewable power in new areas.

The government wants the Norwegian energy supply to be the basis for continued growth and welfare. The new Norwegian energy policy would focus on four areas.

1. Enhanced security of supply

The societies focus on security of supply is growing. The government aims to uphold a satisfactory security of supply also in the years to come – and wants to make sure that market solutions enhance the flexibility of the energy system. The goal is to pursue a strengthened Nordic energy cooperation. The government wants a robust power transmission system on all levels, and will work for better coordination between transmission, consumption and production. New technology and the use of smart management systems will contribute to improved security of supply in the future.

2. Efficient production of renewables

Norway is blessed with huge renewable resources and the opportunity to make use of them. The governments energy policy should enable profitable production of renewable power in Norway.  The efforts in developing and using new technologies for renewable energy will continue. Stronger integration with other energy markets is important to maintain the value of Norwegian renewable resources. Therefore, the government aims to increase connections with European energy markets. The regulatory framework will be changed so that others than the state-owned TSO Statnett may own and operate interconnectors. To avoid reduced values of our existing renewable production, the government will not introduce new targets under the Green certificate system – and will also make the licensing process more efficient.

The government wants a long-term development of profitable wind power in Norway. The introduction of a national framework for wind power will contribute to dampen conflicts and contribute with appropriate choices of locating wind power.

3. More efficient and climate-friendly use of energy

The government wants to alter the focus from supporting mature production technologies towards innovation and the development of new energy and climate solutions. Our national agency for the support of green energy and energy efficiency, Enova, is our main instrument in this work. Enova’s overarching aims are reduction of climate emissions, strengthening security of energy supply and the development of technologies that in the long term contribute to lower climate emissions. The government has recently entrusted Enova with the responsibility of contributing to reduce climate emissions from transport. The development of new energy and climate technologies in the industrial sector will continue to be a main area of Enovas work. The government is proposing an ambitious national objective for energy efficiency.

4. Economic growth and value creation through efficient use of profitable renewable resources

The energy sector creates substantial values based on Norways renewable energy resources.

The use of renewable energy also enables value creation in other industries and sectors. The government will facilitate the development of our competitive advantages from deploying our renewable energy resources. The government proposes a new law that will enable industrial owners of hydropower to access predictable supplies in the future.

Future value creation based on our renewable resources is contingent on our ability for innovation and knowledge development. The government aims to achieve a smooth employment of tools from different institutions and innovation programs – building on the strategy “Energy 21” which is jointly developed by the industry, research institutions and public authorities.

Renewable energy focus

For the GREBE Project it is interesting to notice that 3 of 4 policy headlines in the new energy policy – directly focus on Norway’s renewable energy resources and how to make use of them and technological innovations to create renewable business.

GREEN ELECTRICITY CERTIFICATES IN NORWAY

NSP 09-08-2016

Hydropower is still the mainstay of the Norwegian power supply system, with other renewable energy sources such as wind and solar providing an important supplement. In the public debate, we often hear that Norway must become greener and make a transition to greater use of renewable energy. In fact, Norway is already leading the way in this field, since almost all our electricity production is based on renewable sources. Our power resources have been crucial for value creation, welfare and growth in Norway for over a hundred years, and will continue to play a vital role in future.

But this will require continued development of renewable energy sources. The green electricity certificates is an instrument intended to boost the renewable electricity production in Norway.  So what is an Norwegian green electricity certificate scheme?

Electricity certificates

The joint Norwegian-Swedish electricity certificate scheme is intended to boost renewable electricity production in both countries. Norway and Sweden have a common goal of increasing electricity production based on renewable energy sources by 26.4 TWh by 2020, using the joint electricity certificate market.

The electricity certificate market is a market-based support scheme. In this system, producers of renewable electricity receive one certificate per MWh of electricity they produce for a period of 15 years. All renewable production facilities that started construction after 7 September 2009, and hydropower plants with an installed capacity of up to 1 MW that started construction after 1 January 2004, will receive electricity certificates. Facilities that are put into operation after 31 December 2020 will not receive electricity certificates. The electricity certificate scheme is technology-neutral, i.e. all forms of renewable electricity are entitled to electricity certificates, including hydropower, wind power and bioenergy.

Norway and Sweden are responsible for financing half of the support scheme each, regardless of where the investments take place. The authorities have therefore obliged all electricity suppliers and certain categories of end-users to purchase electricity certificates for a specific percentage of their electricity consumption (their quota). This was 3 per cent in 2012 and will gradually be increased to approximately 18 per cent in 2020, and then reduced again towards 2035. The scheme will be terminated in 2036. A demand for electricity certificates is created by the quota obligations imposed by the government, so that electricity certificates have a value. In other words, the market determines the price of electricity certificates and which projects are developed. Producers of renewable electricity gain an income from the sale of electricity certificates, in addition to revenues from the sale of electricity. The income from the electricity certificates is intended to make it more profitable to develop new electricity production based on renewable energy sources. The end-users contribute to this through their electricity bills. In Norway, the framework for the scheme is governed by the Act relating to electricity certificates.

The Electricity Certificate Act  

An electricity certificate is a confirmation issued by the Norwegian State that one megawatt hour of renewable energy has been produced pursuant to the Electricity Certificate Act. The electricity certificate system is intended to promote investments in renewable energy. Electricity customers finance the scheme through their electricity bills. The electricity certificate market is a statutory market in that the market would not have established itself naturally, but that the need and demand has been created through the Electricity Certificate Act.

The Electricity Certificate Act has been supplemented by the regulations relating to electricity certificates of December 2011 – and will be supplemented by new regulations in 2016.

The Electricity certificate market

The electricity certificate market is based on an international agreement with Sweden, and the joint market makes use of a cooperation mechanism under the Renewables Directive. The goal is for the joint electricity certificate market to increase electricity production based on renewable energy sources in Norway and Sweden by 26.4 TWh by 2020.

To establish the joint market, it was necessary to ensure that electricity certificate obligations in Sweden can be fulfilled using Norwegian electricity certificates and vice versa.

Producers

The owner of a production facility is entitled to electricity certificates if specific conditions in Chapter 1 of the Electricity Certificate Act have been fulfilled. The production facility must produce electricity based on renewable energy sources (this is a technology-neutral requirement), be approved by the NVE and satisfy requirements for metering and reporting. Both expansion of existing facilities and new facilities may satisfy the conditions for receiving electricity certificates. Production facilities which become operational after 31 December 2020 will not be entitled to electricity certificates. Those subject to the electricity certificate obligation are primarily suppliers of electric energy to end-users. But, in certain cases, end-users themselves may themselves be subject to an electricity certificate obligation.

Producers entitled to electrical certificates must apply for approval of the facility to the NVE, which administers the electrical certificate scheme in Norway. In addition, the producer, or a registrar authorised by the producer, must apply for an account in the electronic electricity certificate registry.

Electricity certificate registry

Statnett SF is responsible for the electricity certificate registry, and has established and operates the registry. Statnett SF is responsible for registration and cancellation of electricity certificates in the registry. The electricity certificates are issued after production has taken place on the basis of actual metering data. Electricity certificates are issued by Statnett SF registering the electricity certificate in the certificate account of the entity entitled to electricity certificates. The scheme will be terminated on 1 April 2036 through the cancellation of electricity certificates for the year 2035.

Trading of the certificates

The electricity certificate scheme is based on trading of the certificates, so that the entities entitled to electricity certificates can capitalise the value represented by the certificates. Those subject to an electricity certificate obligation will have access to the electricity certificates that are necessary in order to fulfill their electricity certificate obligation.