Norwegian Energy Partners

NSP 06-11-2017

The establishment of the new organisation – Norwegian Energy Partners – is the result of a merger between INTSOK and INTPOW in 2017 given the name NORWEP. NORWEP will continue to provide support to the oil and gas supply industries in Norway, but will also now work with the renewable energy sector. The Norwegian Energy Partners will be combining the competence in previous INTSOK and INTPOW to mutual benefit for the whole Norwegian energy industry – as the international oil companies now reshaping and extending their investment strategies and the Norwegian supply industry looking to be well positioned to compete also in the renewable markets. In 2018 the Norwegian Government would give 3.7million Euro to NORWEP – to promote the Norwegian energy sector to the international market.  

INTSOK/INTPOW

INTSOK was an effective vehicle for promoting the Norwegian offshore industry’s capabilities to key clients in overseas markets and providing market information to its partners. The focus was on global opportunities, not only amongst large Norwegian companies but also amongst small and medium-sized enterprises. INTSOK was a network-based organisation where the partners exchange experience and knowledge of market developments internationally. INTPOW was the only national and the principal networking organisation for the Norwegian renewable energy industry. INTPOW’s members were Norwegian authorities, companies and other industry participants with an international expansion strategy. The joint forces between INTSOK and INTPOW will be an even stronger unit to open doors for Norwegian companies and technology.

The new organisation – NORWEP  

Norwegian Energy Partners will be combining the competencies of both organisations to mutual benefit for the whole Norwegian energy industry – building on:

  • The Norwegian energy sector has developed industry with experience, ideas, products and technologies – that are competitive in the most demanding global markets.
  • International oil companies are now reshaping and extending their investment strategies in to the renewable energy sector.
  • The Norwegian industry, known for its safe, reliable and energy efficient solutions, could also have a competitive edge with the increasing awareness around climate change.

The Norwegian Energy Partners role will be to continue the effective work done by INTSOK/INTPOW – for promoting the Norwegian energy industry’s capabilities, technologies and competence to key clients in the overseas markets and providing market information to the partners. NORWEP would still be a network-based organisation, facilitating dialogue between energy companies, technology suppliers, service companies and the Government.

New possibilities – Investment in renewable energy

Investment in renewable energy, energy efficiency and low carbon solutions are rapidly increasing. The Norwegian supply industry has a lot to offer in this changing energy landscape. The petroleum industry has solved technological challenges in a demanding environment on the Norwegian continental shelf since the very beginning of the oil production in Norway. The Norwegian supply industry has over 100 years of experience in developing hydropower, and is increasingly delivering technology to solar and wind development projects. The supply industry’s valuable competence is utilised across sectors. In fact, half of the members of former INTSOK – traditionally delivering to the petroleum sector, also delivers equipment, services and technology to the renewable energy sector.

  • Solar energy
  • Hydropower
  • Wind energy

 

Arctic and cold climate solutions

The Norwegian Energy Partners would also have a special focus on arctic and cold climate solutions – to strengthen Norwegian arctic related technology and competence. NORWEP wants to pave the way for Norwegian industry delivering world class technology and solutions for arctic and cold climate areas, as well as infrastructure – looking at international markets as USA (Alaska), Canada and Russia.

This is of course a very interesting focus for the Northern Periphery and Arctic Programme, NORWEP and the Norwegian Government discussing arctic and cold climate development projects.

Fast track internationalisation

NORWEP will assist the participating companies from the energy sector – in identifying their most optimal international markets based on the products and services the individual companies offer, as well as connect the companies to their respective markets. The result is an internationalisation strategy with defined activities and action plan on how to achieve the objectives. All done to reach a higher level of internalisation of the Norwegian energy business – building on fast track solutions.  

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Canada needs EU for the development of bioeconomy

ceta

According to the Conference Board of Canada, Northern peripheral areas in Canada have about 300 distant communities, where sustainable development for energy, waste management and clean water could be developed much further than where they currently are. Natural Resources Institute Finland sent Dr. Lauri Sikanen to Ontario to Lakehead University for four months to investigate renewable energy opportunities in distant communities.

Dr. Sikanen sees a great potential to support Canada in their development and to open also markets for European advanced technology of bioenergy and cleantech. Dr. Sikanen hosted the visit of Finnish Minister of Foreign Trade and Development Mr. Kai Mykkänen and a delegation of about 20 leading Finnish bioeconomy companies in Thunder Bay 10.-12. of October and now further steps of most promising leads are in his schedule.

Distance communities are producing their energy by transported diesel and that takes energy price in communities sky high. It is normal to pay five or even ten times higher price for energy in those communities than elsewhere.  Large numbers of communities are located in forested areas and have remarkable amount of solar and wind available as well. Using biomass, solar and wind would also bring more economic activity into communities.

EU and Canada just recently made a CETA agreement to harmonize regulations in trade between them. Now export of good and services should be easier for both, but bioeconomy development in Northern areas in Canada needs an extra attention. NPA programme already welcomes some areas of Canadian Maritimes into projects but the need for the development supported together is actually also (and even more) elsewhere. It would be good to have northern areas of provinces like Quebec and Ontario included and joint programme with Canadians could be created.

Another “extraordinary month” for renewable energy in Scotland

ERI June 2017
Source: Scottish Renewables (2017) https://www.scottishrenewables.com/sectors/renewables-in-numbers/?utm_source=Twitter&utm_medium=Social%20Post

The month of May showed that renewables can still play their part in providing large amounts of electricity even in summer months. Wind turbines alone provided enough electricity to supply 95% of Scottish homes thanks to windy weather. The 863,495MWh of electricity provided to the grid was an incredible increase of 20% compared to May 2016.

Solar energy was also increasingly able to supply 100% of electricity needs to houses fitted with panels across a number of areas in Scotland. Aberdeen, Dumfries, Dundee, Edinburgh, Glasgow, Inverness and Lewick houses fitted with photovoltaic panels benefited from 100% of their average use generated from the sun. Solar hot water panels also provided 90% of household’s average hot water needs in the same Scottish areas.

Across the United Kingdom there was also records broken on the 26th May with the National Grid reported a peak of 8.5GWh over a half hour period at midday. This was almost a quarter of total UK demand.

Scotland continues to increase its renewable energy capacity with an average annual increase of over 660MW since the end of 2008. Total installed renewables capacity sat at 8642GW at the end of 2016 of which the breakdown can be found below. This ever-increasing renewables capacity allows Scotland to reach renewable energy targets and climate change targets whilst still exporting low carbon electricity to its neighbours.

Renewable energy demonstration network to be established in North Karelia, Finland

Solar PV Joensuu
A Solar PV of 27 kW, Etra / Green Park, Joensuu.

Poveria Biomassasta Project (Power from the Biomasses), collaborating with the NPA Project GREBE, is establishing a network of renewable energy demonstration sites in North Karelia, Finland.

Several of the sites, such as Eno Energy Cooperative or small-scale combined heat and power of Kuittila Power Ltd., are already famous examples of sustainable energy at the local level. Together with updates of current sites, there are number of new examples for demonstrating new technologies and business models. Poveria Biomassasta will gather the energy sites as a demonstration network and provide access to them through the GREBE Renewable Energy Business Portal.http://www.renewablebusiness.eu/

The energy enterprises in North Karelia have joint development on the integration of solar energy solutions into district heating plants – and a new project, Poveria auringosta (Power from the Sun), has been launched for the purpose. The project will support attending enterprises in energy system planning and carrying out the investments and follow-up. In addition, there has been new interest in energy storage opportunities in the region, and several investments for energy storage are prepared. The practices in wood energy, technology manufacturing, and hybrid systems will also be demonstrated through the network.

The renewable energy demonstration network in North Karelia will be launched at the end of 2017. Karelia UAS will provide further information of the demonstration network and available case examples through the GREBE and Poveria Biomassasta projects.

Become a procumer, a game changer in the energy market

The combination of increased use of solar energy and new technology makes it possible for everyone to become both producers and consumers of solar energy – and this situation would lead us to start talking about procumers, game changers on the energy market.

GREBE 09-05-2016

Solar PV – Attractive business investment

Solar PV has evolved from a niche technology with off-grid solutions and a very limited market – very unattractive business for investors – until the mid-2000s when the solar PV industry entered a phase of rapid and sustained growth in globally installed capacity, driven by:

  • Falling technology cost
  • Strong support mechanisms
  • Rising electricity prices
  • Rising consumer engagement

The strong support mechanisms in the European market created a wave of demand that developed a solar PV industry, a growth that has gradually shifted from an European business to include China and the US in a global market. In 2015 investments in solar PV accounted for nearly half of all investments in renewable energy globally. By 2020 global installed solar PV capacity is expected to triple relative to today’s level, and reach about 700 GW.

The solar resources in Norway

Developments of Solar PV market are lagging behind neighboring markets. At the end of 2015 the total installed capacity was:

  • Norway – 15 MW
  • Sweden – 160 MW
  • Denmark – 790 MW (holiday home off-grid segment)

Do this situation exist because there is less sunshine in Norway than in rest of Europe? No – the solar resources in Norway are comparable to those of central Europe. Lower solar insolation is compensated by cooler ambient air tempratures, which increase solar PV system efficiency. So the development of the Norwegian solar PV market is significantly less attractive than in the neighboring markets because of the economic factors – rather than the solar resources.

 The economics of solar PV in Norway

The economics of solar PV in Norway are significantly less attractive than in neighboring markets:

  • Low electricity prices – 50% below EU average.
  • High technology costs – 60% above EU average.
  • Low levels of financial support

In addition to neighboring markets – the absence of a simple and consistent regulatory framework makes it more difficult for potential customers to move from idea to investment decision. Yet – the last two years there have been an higher activity in the commercial building segments, why?

The main reason is that adopters look beyond economics when opting for solar PV investmets. For today’s adopters economics are only one of several sources of motivation – curiosity play a role in the decision to go solar – curiosity about:

  • New technology
  • Environmental benefits (Local RE Production/Local employment)
  • Emotional values (sustaiability strategy)
  • Self-produced renewable electricity (avoid electricity network bills)

 The support mechanisms has contributed to lowering the up-front investments cost of solar PV in Norway, but in spite of this the profitability of solar PV in Norway remains low, due to record- low electricity prices and high technology cost.

Rising electricity prices – opportunities for the Norwegian solar PV market 

The economics of solar PV in Norway are set to improve significantly over the next 15 years, making solar PV relevant for the majority of the market. There are to major reason for this:

  • Electricity prices – By 2030 retail electricity prices are expected to nearly double relative to todays’s level (Statnett longtime forecast). The spot prices would increase from 20 EUR/MWh in 2015 to 60 EUR/MWh in 2030.
  • Electricity network bills – Investments in the distribution and transmission electricity grids are estimated to increase the electricity network bills with 25% by 2025 relative to today’s level (2015).

At the same time – technology prices are expected to fall by 30-40% relative to today’s level. This is driven partially by a global trend of continous cost reduction for modules and inverters, as well as cost reduction of installation, as the market and solar industry mature.

If this analysis is correct – the payback time for residential solar PV systems in Norway are set to fall to about 10 years (subsidy free payback time). With existing investment support in place, a 10 year payback is expected already sometime around 2023, falling to 7-8 years in 2030.

Transformation of the market

The rising of electricity prices and the falling of technology cost in the solar PV market would be the key factors that gives birth to the Norwegian procumers.

  •  Consumers – will become procumers; today’s passiv consumers will become active producers of electricity from renewable energy sources – with options:
  1. Sales of electricity to grid/power-network
  2. 100% self-suppliers of electricity (cost-cut of electricity network bill) Solar PV
  3. Combination of solar PV electricity production and energy storage (Hydrogen)
  4. Private grids/power network (small society solutions – Solar PV + Hydrogen)
  5. Solar PV electricity production for Hydrogen production (energy storage and sales)
  • Companies – investment and use of local produced RE/storage of RE (SME procumers)
  1. SME’s most reduce their electricity costs
  2. SME’s can’t afford increased electricity bills
  3. Automation of the production would increase the need for electricity
  4. Reduction of electricity cost by investment in RE-systems
  5. Possibility of becoming 100% self-suppliers by investment in RE-systems and storage of energy (Hydrogen-production/Battery)
  • Energy producers – must create strategies to meet the transformation of the market
  1. Export of renewable energy (long term contracts – «Battery strategy»)
  2. Investment in small Solar PV installation (market segment)
  3. Solar PV as electricity suppliers (add to portifolio – smart home/electric vehicle)
  4. Not very happy with giving RE producers access to the grid/power network
  5. Need to develop customer loyalty solutions
  6. Facing low margins and high marketing cost
  • Solar PV Systems – Sustainable market growth and new business opportunities
  1. Delivery models – all in one systems solutions with complementary services
  2. Financing – making it possible to produce electricity without access to upfront capital/Providing capital to SME investment in building solar PV systems
  3. Maintenance – Solar PV Service suppliers
  4. Market integration – Connection to Solar PV eco-systems/Energy sales
  5. Storage solutions – Battery or Hydrogen solutions
  6. Key question information – covering technology, cost, support, finance etc so that customers could understand the cost-benefit equation of Solar PV.
  7. Standardization – the need to deal with multiple actors and bureucratic rules:

-PV providers

-Network companies

-Regulators

 Procumers – the game changers

The Solar PV market will continue to grow, as profitability improves over the coming years. As key stakeholders the network companies and regulators should assess to what extent the existing capabilities are sufficient to support the development of Solar PV. At the same time, they should consider how they can help simplify the process for customers as individuals and for SME/Industry as a whole.

Solar PV commercial customers, individuals and SME’s, look upon Solar PV as a sustainable energy strategy – and they would soon be joined by lager players wanting to enter the market. The procumers has start to ask questions that makes it necessary for actors in the energy sector to define the roles they wish to have in the emerging market. The procumers asking key questions as:

  • What are the direct and indirect benefits of Solar PV for me/my business?
  • Can I /we /my business start renewable energy production?
  • Can I/we/My business start energy production and sell it?
  • Can I/we/My business start energy storage (battery, hydrogen) from RE systems?
  • How will technology cost and energy prices develop in the future?
  • How can solar PV benefit my competitive positioning in the market?
  • What are my retur on investment?

A profitability analysis alone does not provide a complete answer to all the procumers questions, but the Norwegian solar PV market shows growth and the profitability analysis gives answers that indicates that the market would increase over a relatively short periode of time. The procumers would stay in the market driven by both rational-economic facts and non-economics considerations – this couls change the whole energy market in Norway. The procumers could become game changers.

It is therefore important for commercial and public actors to initiate a strategy process around solar PV – with a view to prepare for the future developments of Norwegian solar PV.