Norwegian state ‘betting on’ energy security – opposition
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ICIS Heren meets Ketil Solvik-Olsen, the man who could be in charge of Norway’s energy sector in 2013, to discuss his plans
17 Jan 2011 15:57:47 | edem
Norway could seek an alternative three-pronged approach to power generation after its next general election in 2013, ICIS Heren has learned.
The government is "betting on" its existing hydropower resources and capital-intensive plans to develop offshore wind to ease the country's tight supply outlook, the opposition has said.
But should the opposition - which commanded 53% of the vote in an opinion poll late last year - assume power in 2013, a sharp change of direction will take place.
The existing supply situation has led to high wholesale power prices in Norway, which means the newly operational 700MW NorNed link between the Nordic country and the Netherlands is unlikely to bring the two markets closer together (see EDEM 14 January 2010).
The existing administration - a left-leaning coalition of three parties - insists the situation will ease when hydrology patterns return to normal. A spokesman said 2010 had been "quite out of the ordinary for the Norwegian hydro system".
But Progress Party shadow energy spokesman Ketil Solvik-Olsen, who represents the largest parliamentary party among the opposition, told ICIS Heren that policy-makers were gambling with the state's energy security. "They are betting on things turning out right without doing anything about it," he said.
The government, which is highly sensitive to domestic environmental issues, recently reaffirmed its longstanding policy that no new gas-fired power plants would be built unless they were fitted with carbon-capture and storage technology from the outset (see EDEM 7 January 2010) despite Norway's vast natural gas reserves.
But according to Solvik-Olsen, Norway's energy security must be on equal footing with the low-carbon agenda.
The alternative
Should the Norwegian opposition win power in 2013, Solvik-Olsen is likely to become the next energy minister. His alternative three-pronged approach is:
• Support for building a small number of gas-fired power plants in specific locations - one in the north, one in the central-east region, and one in the central-west.
• Drive the development of the onshore wind sector by applying public subsidies. Solvik-Olsen cited a large number of potential sites and the less capital-intensive status of the technology compared with offshore wind.
• Further development of hydropower. Solvik-Olsen said the catchment area could be extended.
Power consumption in Norway totalled 130TWh in 2010, when Norway was forced to import 7.6TWh, or 6% of its total power consumption, from its neighbours.
Solvik-Olsen said an additional 50TWh could be developed from the country's hydro resources - including 10-15TWh through upgrading existing plants - "but that would require higher [wholesale] power prices".
Although Solvik-Olsen does not favour offshore wind power in Norway, he would use state funds to support Norwegian private-sector companies looking to develop offshore wind in other countries.
"We can prepare them for competing on the international market, rather than in the domestic market," he said. JS
This article was originally published at http://www.icis.com/heren/
The London-based ICIS Heren is the specialist information provider for the gas, power, carbon and coal markets. ICIS Heren publish price assessments, indices, news and analysis for the gas, liquefied natural gas, power, carbon and coal sectors.
