Opening address at German Norwegian Offshore Wind Energy Conference

Opening address by the State secretary Sigrid Hjørnegård at the German Norwegian North Sea Offshore Wind Energy Conference in Bergen, 04.05.2010.

The State Secretary's speech was based on the following:

Ladies and Gentlemen,
The North Sea offshore wind resources are substantial and many countries are developing ambitious plans for exploiting them. This is good news for the climate, for the energy security of Europe and for the European offshore wind supply industry.

Indeed, to be successful the industry and the European governments need each other. I believe that the challenges of developing these resources can only be overcome through constructive public and private interaction.   

Before I move on, I would like to thank the organizers of the seminar for inviting me and for taking this initiative to strengthen the German – Norwegian cooperation in this important field.

In this speech I will highlight the good relations between Norway and Germany, give you an update on what is currently happening in Norway in the renewable energy sector and especially on offshore wind power, and put this into a European energy perspective. 

Germany and Norway
The host city for this conference is well chosen. Bergen is historically a very important city for trade and international relations. It is a nice coincidence that we today are very close to Tyskebryggen – the German wharf.  Tyskebryggen consists of a series of Hanseatic commercial buildings with UNESCO World Heritage status. Around 1360, a Kontor of the Hanseatic League was established here, so it is fair to say that cooperation between Norwegian and German commercial interests go way back in time and the Hansa trade around the North Sea was powered by wind as well. 

One of the most important sectors in our bilateral cooperation today is petroleum. Last year, Norway exported about 100 billion cubic meters of gas, of which more than 98 per cent ended up in Europe. Norway is the second largest supplier of gas to the European market and a major contributor to the security of European gas supply.

Natural gas represents an important link between Germany and Norway. In 2009, Norwegian gas deliveries to Germany reached over 25 billion cubic metres, which is one third of Germany’s gas consumption.

Cooperation between our two countries in the energy sector has a long history. German companies have been vital for the development of the petroleum sector in Norway. We appreciate the presence of German oil and gas companies on the Norwegian Continental Shelf. They bring valuable knowledge and experience.

I really hope we will see a similar cooperation in the offshore wind sector.

Global perspective – the role of wind power
Globally, climate change and securing enough energy for people are probably two of the most important challenges of our lifetime.
 
Increased use of renewable energy is one very important part of the answer to these challenges.

Currently, renewable energy provides about 18 per cent of the world’s electricity. There is a substantial potential for increasing this share, and because of its availability wind power will play an important role.

We see positive developments. The world’s wind power capacity grew by 32 per cent in 2009, the highest rate since 2001.
We expect the offshore wind market to continue to develop rapidly.
The offshore wind potential is very substantial, but we need to get the technology and economy in these projects right. Here, the supply industry will have to play an important role.

On the international arena, Norway has substantially increased its funding for renewable energy in developing countries. Through the program “Clean Energy for Development”, we target areas where Norway has special competence, like in hydropower.

Last year the International Renewable Energy Agency - IRENA – was founded. IRENA’s existence is to a large extent thanks to the initiative from Germany and the hard work you have done to create this important organization. The founding of IRENA is further proof that the time is ripe for a major boost of renewable energy. Norway has already ratified the Statutes and we are committed to work with like-minded countries within the framework of IRENA.

Norway and renewable energy
Norway has been a major producer of hydropower for more than one hundred years, currently being the world’s 6th largest producer. Hydropower’s share of our electricity production is close to 100 per cent. The result is that the share of renewable energy in Norway’s total energy consumption is some 60 per cent.

Large reservoirs are vital for our energy security during cold and dry winters. They are also important outside of Norway as they provide peak power for our neighboring countries during the rest of the year. Actually, close to 50 per cent of the reservoir capacity in Europe is located in Norway. This has led some to brand Norway as the “Renewable Battery of Europe”.

In addition to our hydro power activities, Norway is also actively engaged in developing technologies to unlock the potential of other renewable energy sources, such as floating offshore wind generation, wave – and tidal power, as well as osmotic power.  Furthermore, we have a very strong industrial cluster in solar PV and abundant bio energy resources.

The potential for using wind energy – either on- or offshore - is huge in Norway. Looking some years into the future, I believe we can develop floating windmills which can harvest this resource in an economical way.

Government policies
Offshore wind power development is relevant for Norway because of three fundamental reasons:
1) We have vast offshore wind resources,
2) We have 50 per cent of Europe’s hydropower reservoir capacity and
3) We have the industrial know-how in important areas.

Our vision is that offshore wind energy shall become the next chapter in the great story of our energy industry. However, future large-scale development of offshore renewable energy production presents us with a number of challenges. The challenges range from technology development and economic viability, via grid capacity, to legal and regulatory issues.

To start with the last point:
An appropriate and efficient legal and regulatory framework is a necessary basis for developing this branch of the “green” energy sector.
Earlier this year, Parliament enacted the Ministry’s Draft Bill on offshore renewable energy and approved the strategy. 

Part of the strategy is to identify sea areas suitable for future development of offshore wind power. This work is based on collaboration between a wide range of stakeholders, and aims to identify relevant issues at an early stage. We have used the model from the petroleum sector

The strategy also discusses the importance of technology development and cost reduction.

Research and Development
In order for offshore wind to be attractive, costs must be brought down. This is a challenge that has to be addressed by the industry. But we will also contribute through support for research, development and demonstration.

We have therefore increased the research budgets for renewable energy with around 300 per cent from 2007 to 2010.

We have established Centres for environment-friendly energy research. As many as three out of eight of these centres have focus on offshore wind technology.

My government prioritises cross-border collaboration in energy research. This is because we believe this will make our industries more competent – and competitive. I am therefore pleased to see so many technical experts from both countries here today.

We are also supporting full-scale demonstration projects.  I would like to mention two projects that have received support the last few years:

In September 2009, the world’s first full-scale floating wind turbine – Hywind – was started up southwest of Haugesund, by Statoil. Haugesund is located south of Bergen on the west coast. The project was supported with about 7 million Euros. Hywind illustrates how we can benefit from the knowledge we have gained from our petroleum industry.

Another offshore wind company, Sway, has announced its plans to build a 10 MW wind turbine outside of Bergen. This turbine will be one of the world’s largest and the new technology will be tested on land over the next two years.

Norway and Europe
The European Union has set an ambitious target to reach a 20 per cent on average share of renewable energy within 2020.  To a large extent, this means large-scale development of wind and solar projects.  In contrast to hydropower with storage capacity, supply from wind and solar power will need back-up.

In recent years there has been a development towards greater integration of the European electricity markets. Such integration is important to ensure a high level of supply security. Furthermore, it facilitates an even better use of our combined energy resources.

Through combining our hydropower storage capacity with stronger interconnections, offshore wind power from the Norwegian Continental shelf may become a major source of supply for clean electricity to Europe.

Offshore Grid Cooperation
One essential element in reaching our common goal of more renewable energy generation in Europe is transmission grid planning and system development. The Nordic countries have a long history of cooperating in this field.

Stronger integration between the Norwegian and European electricity markets requires additional interconnectors. I am pleased to see that many projects are currently considered, also to Germany. I believe that connecting the Norwegian and German electricity markets would increase energy security and bring considerable benefits to both nations. 

European integration requires multilateral initiatives. Norway has joined the North Seas Countries’ Offshore Grid Initiative, together with nine EU-countries including Germany. A future grid in the North Seas requires international cooperation and Norway has a natural part in this cooperation. Our work with the offshore renewable energy strategy and the identification of sea areas suitable for offshore wind power are relevant for this initiative. The political declaration clearly reflects the fact that coordination among the different participants is necessary in the North Sea.

A common green certificate market with Sweden
An initial agreement between Sweden and Norway establishing the principles for a common green certificate market was signed in September 2009. The agreement establishes some key principles: equivalent ambitions in both countries, the time-schedule for implementation and non-discrimination between technologies.

The goal is to start the common green certificate market from 2012.

Business opportunities
The wind energy sector has grown to become a major industry. According to the World Wind Energy Association, the global wind market for turbine installations in 2009 was worth about 50 billion Euros. By 2012 it is expected that the wind industry will employ more than 1 million people.

The North Sea region is a good place to develop offshore wind resources.  The resources are vast and the geographical location is excellent with relatively close distance to the major European energy markets. 

We have a vision that Norway shall be a world-leading nation in terms of environmentally friendly energy and that this shall contribute to the establishment of green jobs. Germany is a source of inspiration to us in this respect. The German wind and solar industry is of world-class and I have heard that several hundred thousand jobs have been created as a result.

There will be plenty of opportunities when thousands of wind turbines are being built and installed offshore in the North Sea. To operate in this market, the companies have to be internationally oriented, competitive and flexible.

 Just before Easter, General Electric informed the Norwegian government and the public that it had decided to invest around 75 million Euros in Norway on offshore wind research and development over this coming decade.

This was very good news and I believe the fact that GE wants to establish new business in Norway is proof that Norway is seen as an attractive country to invest in.

Closing remarks
I have covered some of the many topics related to offshore wind. This illustrates the challenges we face but also the vast opportunities at hand if we – the industry and governments – do the right things together. International co-operation is vital, and conferences like this are important stepping stones.

With this, I wish you good luck with the Conference and I hope you will enjoy fruitful and interesting discussions today.

Thank you for your attention!