The Federation of Norwegian Industries has given wind power a very warm welcome. Alcoa, an aluminium giant, has secured over half of its power needs with wind power. And they want more.
“The more wind power we get into the system, the better it will be for industry”, says Ole Børge Yttredal, a director of the Federation of Norwegian Industries, which represents 2800 industrial companies in the NHO (the Confederation of Norwegian Enterprises).
Heavy industries, which are the major power consumers in this country, are the best friends of the wind power industry. During the past couple of years, both Hydro and Alcoa have entered into a number of long-term power contracts with wind farms, for a total of 6.7 TWh, according to figures from the companies. This corresponds to about three percent of the total power consumption of mainland Norway.
>Alcoa, the U.S. Aluminium giant, has now secured 55 percent of its power consumption through wind power.
“We are very positive to wind power. We have entered the contracts because they were the best available commercially”, says Toini Løvseth, the Director of Energy for Alcoa Nordics.
She says hydro power players with paid down power plants, are to a greater extent able to live with price fluctuations, while the wind power companies want long-term contracts with predictable earnings for new investments. Behind several of the wind power players are financial companies, such as Blackrock and pension funds.
“That is to our benefit. We have now covered a great deal of our power consumption going forward with long contracts for wind power. There may be some more. We will have to see what we are able to arrange.”
Hydro has secured four TWh annually through wind power and has also acquired a wind power company, Njordr, who developing wind power projects in Norway and Sweden.
“The energy sector is undergoing major changes, and the supply side is rapidly changing with the development of wind and solar energy. This offers opportunities for the whole of Hydro’s value chain with respect to costs, risk mitigation and reducing CO2 emissions”, writes Erik Brynhildsbakken, a Hydro communications advisor, in an e-mail.
“We can see that wind power offers different dynamics in the power market, and that is very good for the industrial companies. Before, there was only hydro power, so when wind power reaches full strength, it will be very positive for industry. The feedback from the players is that Statkraft and the other water owners are facing competition and are being challenged. We are also seeing owners with a different approach and other return requirements than the hydro power owners”, says Mr. Yttredal of Norsk Energi.
Norwea, the wind power association, has encountered a lot of headwind in recent weeks, with demonstrations at Frøya and a strong increase in the protests against wind power generally.
The resistance is unlikely to abate with the installed wind power doubling during the year to ten terawatt hours (TWh) when eight new, major wind farms will go operational. That means that Norway will fulfil its 2020 targets in the EU renewable energy directive.
The Norwegian Water Resources and Energy Directorate (NVE) has calculated that ten TWh will reduce total emissions by five million tonnes CO2, corresponding to ten percent of Norwegian emissions.
“It is far from enough for Norway to cut its emissions by 40 percent before 2030, as adopted by Parliament”, says Norwea boss Øyvind Isachsen.
Over half of the energy usage in this country is still fossil.
Statnett has declared that electrification is the solution. The central grid owner recently calculated that if Norway halved its emissions, it would require 30–50 TWh of new clean power.
“We have the solution. We know how to cut emissions by 40 percent by 2030, as Parliament has decided.”
“In order to reach the climate objective set by Parliament for 2030, we need an increase in power production of at least 20 percent. This is the equivalent to the production from 1,500 new wind turbines, Mr. Isachsen says.
Currently, there are around 625 turbines revolving in this country.
“We need politicians with the guts to brave the wind. It ought to occur to them that we cannot avoid developing more wind power”, he says.
Mr. Isachsen is also of the opinion that it is possible to develop more hydro and solar, but he is certain that wind power is the cheapest and best option that is no longer in need of subsidies.
“Industry wants to escape the hostage situation they have been in with Norwegian hydro power. They are entering into wind contracts in order to speed up the Norwegian electric power market. Increasing production has in itself a damping effect on the price of power.”
Mr. Isachsen thinks that without more wind power, the electric power rate will become so high that it will put a brake on the transition to lower emissions.
“If we don’t get more production, the price will increase so much that people would rather drive their diesel powered Audi than switch to electric. If industry is to cut CO2, it will have to run on water and wind.”
Everybody recognises that the climate changes require action and change, says Dag Terje Solvang, the General Secretary of the Norwegian Trekking Association (DNT).
“However, we have to manage to have two thoughts in our heads simultaneously. We have to manage to secure valuable nature areas at the same time as transitioning to a greener future. The General Secretary agrees that there is a need for 30–50 new TWh in order to achieve the ambition of a fully electrified Norway.
- However, with the current power surplus, the 86 plants that have already received permission, more efficient energy production and an improvement in existing hydro power production, we do in fact have the power we need to reach this target”, Mr. Solvang writes in an e-mail.
He thinks that NVE’s proposed 13 prioritised areas for wind power will destroy irreplaceable nature for future generations. He refers to new offshore wind power, where there are enough wind resources to cover Europe’s future requirements for renewable energy.
Norwea thinks this is unrealistic.
"Eventually, we will also get offshore wind power, but for the time being, it is still way too expensive, at around the double of the cost on land. Nobody will want to pay the price”, says Mr. Isachsen.
Written by: Ida Grieg Riisnæs
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