Innlegg på Paretokonferansen om fornybar energi

Oslo 16. januar 2014

Statsråd Tord Liens innlegg på Paretokonferansen om fornybar energi.

Check against delivery

Good morning and thank you for the invitation to speak here today.
Before starting my presentation, I would like to wish you all a happy new year, and I hope you have enjoyed the holidays as well. Now it is 2014, and the festivities are over. Now it is time for action and hard work.

This is our job, the Government, the Parliament and you; to deliver more renewable power production, not just more ambitions.

In that context, I wish I could come up with a very inspirational quote, but the famous inventor Thomas Edison said it clearly, perhaps not so inspiring as it is true: “There is no substitute for hard work”. We do need to increase our efforts. The world needs more energy, and it needs more sustainable energy.
 
As an introduction, let me begin with a brief look at the global situation, where energy, climate, competitiveness and welfare are all closely connected. 

The big picture

We are more than seven billion people on this planet. In 2035 there will be almost nine billion of us.
A growing population is one of the reasons why The International Energy Agency, the IEA, has calculated that by 2035, global demand for energy will rise by a third. 

We are not just talking about population growth. At the same time, more and more people are also getting out of poverty.In this context, access to energy is a precondition for economic development and thereby social welfare. 
 
Being an historian by education it is tempting to use the Norwegian experience to illustrate this vital link.
In the late 19th century, while countries in continental Europe started developing their industry based on coal, we developed ours on hydropower. Access to these tremendous resources gave the emerging industrial sector in newly independent Norway a real kick-start.

Politician, ship-owner and later Prime Minister for two periods, Gunnar Knutsen, was way ahead of his time, and saw the potential of this resource. Already in 1892, he suggested that the Parliament should buy waterfalls in order to supply the railways with electricity, and by that reducing the need for imported coal.

That example is interesting, as right now, parallel to the increased production of renewable energy, Europe is still very much depending on coal.

That was the historical perspective. What was true then is just as true today. Access to energy is as vital nowadays as it was a hundred years ago.However, I am not sure if those managing the coal-fired industrialization of Europe in those days did pay much attention to the downside of it – the high greenhouse gas emissions.

Now, the situation is different, with the climate challenge very much on the agenda. In that context, one of the positive news coming from the latest IEA report is the increased role for renewable energy. 
We need more renewable energy in order to provide sufficient energy to cover demand, while at the same time – caring for the climate. 
 
Europe and interconnectors

As you all know, the European Union is currently pushing hard to increase the electricity generation coming from renewable sources of energy. One important development in that context is the interconnectors linking Norway to Europe. 

At the moment, we are considering new interconnectors to the UK and to Germany. Many aspects will have to be considered when establishing a new interconnector, like environmental concerns, commercial viability, security of supply and domestic grid capacity. But there are some very interesting opportunities as well.

Much of the increased production in Europe comes from wind and solar power, so called intermittent power sources. 

The customers also need alternatives when the sun is not shining or when the wind doesn’t blow. Here, Norway can contribute with both renewable energy and natural gas. Norway can also import power from Europe in windy periods. 

Since we are so dependent on hydropower, such an exchange will make the Norwegian power system lessvulnerable to weather variations, like dry periods with no rain. This will lead to less variable prices.

That was Europe. Big things are happening when it comes to increased production of renewable energy. Norway will definitely continue to play an important role in this development.   

Globally, there is also a lot of potential for renewable energy, and much of it is in developing countries. 

Africa, for example, has vast hydropower resources, but only about ten percent has been developed. 

Norway has the experience, the competence and the know-how when it comes to different aspects of hydropower. For decades we have contributed to developing countries – especially through capacity- and institution building. 

In that context, Norfund plays an important role contributing with both knowledge and capital, together with private actors.

Renewable energy in Norway

So far I have talked about the big picture globally. What about Norway?
I have already talked about how Norway has traditions when it comes to renewable energy, especially hydropower. 

Renewable energy is a brilliant power source. Increased production of renewable energy is also an important instrument in order to lower emissions. Already, Norway has a high share of the renewable energy production in Europe.
 
Now the part that really matters; the results, where we are definitely on the right track. 
Today, we have, together with Iceland, the largest share of renewable energy production in Europe. Nearly all our electricity production comes from renewable energy sources.

Furthermore, by 2020 renewables will make up 67.5 percent of the total Norwegian energy mix. That is the highest figure in Europe, and we are well on track to reach that figure. However, we are not done, and there is still work remaining.

The electricity certificates

Our most important tool turning ambitions into results is the electricity certificates. 
We introduced this support scheme together with Sweden in 2012, and by 2020 this will lead to an increased annual production of 26,4 TWh of new renewable power.  
 
For many – this is just a number. But how much is 26,4 TwH? 
It is about three times the yearly power consumption in the two Trøndelag counties, or the yearly power consumption in our five most northern counties.

The certificate system is market based. The politicians have decided the production target, but the market decides the level of support, and which projects to realize. We closely monitor the functioning of the system, in order to make sure that we are on track with regards to the goal of 26,4 TWh. 

That´s why I have ordered a report from the Norwegian Water Resources and Energy Directorate, which I will receive on the 11th of February. I will invite the industry to comment on this report.

We are two years into the electricity certificate scheme, but it is a long-term commitment running until 2035. That gives a predictable framework for years ahead, which is important for the industry.More efficient licensing
 
If the certificate scheme is one important instrument to encourage more renewable power production, the more efficient processing of license applications is another. Together with the Directorate, we have significantly strengthened the capacity to process more applications, and we are currently granting more licences than ever before.

Just take a look at the chart. It shows a significant increase, especially for wind power. (the green bar)
We have given final licenses to wind farms with a total potential of more than 10 TerraWattHours. It is now up to the industry to follow up these projects.

It is quite common to complain about bureaucrats. Perhaps this sounds strange coming from a politician representing the Progress Party, but I actually think they deserve credit for the work they are doing, processing licence applications at a faster rate than ever before. 

However, it is not enough with just increased production of renewable energy. We also need sufficient infrastructure to make sure that the power can be efficiently transported from producer to consumer.

Grid capacity and security of supply

On Christmas Eve, around 12.000 households lost power for at least some time. For the majority, it was back within maximum an hour or two. 

It could have been a lot worse, but hopefully the recent storms, “Ivar” and Hilde” served one very useful purpose: Drawing attention to the importance of strengthening the grid capacity and the security of supply.
 
Contrary to the impression you may get from following the public debate; we are not there yet where we can send electricity by email. In less than two weeks I will attend the official opening of the Sima-Samnanger power-line. 
 
I am sure everybody still remembers the controversy stirred in the media as a result of that particular power-line. New words were introduced to the Norwegian language, and classic paintings were given a modern touch to protest this construction.

Of course, grid investments have consequences for nature and landscape, and it is important to take this into account. A thorough licensing procedure is therefore necessary and also beneficial. 

At the same time, we have to make people really understand that grid investments are needed. The understanding is growing, but there is still work to be done. Let me be clear about my views regarding this discussion: If we are to develop and produce more renewable power, and if we are to strengthen security of supply, we have to accept seeing a power line, maybe even in our own neighborhood. 

In the coming years large investments will be made in the Norwegian transmission grid. Statnett will invest about 6 to 8.5 billion euros in new capacity in the main grid in the next ten years.

Large investments in the main grid are needed because of more renewable power production, and in order to strengthen security of supply. Increased vulnerability for power shortages and more renewable power production contribute to a need for large investments in the lower voltage grid as well. 

Currently, an expert group is looking at how the distribution grid system can be better organised to ensure that the grid companies are able to meet the challenges ahead. The expert group will deliver a report to the ministry by the end of April.

Summary

It is time to summarize. We do what we can to encourage increased renewable power production. 

We have established the certificate scheme, creating a predictable long term framework for the industry.
We have strengthened the capacity for handling licence applications faster and more efficient than ever before.
And we have taken steps to ensure increased grid capacity and better security of supply. 

The new Government wants to continue doing what we can to increase efforts to enhance the production of renewable energy. That is a goal clearly stated in our policy declaration. 

We need more energy, and particularly we need more renewable energy if we are to meet the complex challenge of delivering enough energy and at the same time caring for the climate.
 
In the beginning of this presentation, I mentioned Thomas Edison. One of his many inventions was the electric light bulb, symbolized here by a lighthouse. My ambition is that Norway can contribute by delivering the renewable energy powering the European climate- and energy lighthouse, and by showing the way within carbon capture.

But it is very important to keep in mind that the Ministry did not invent wind turbins, nor do we build them. The same goes for construction dams.It is the industry that has to develop and produce more renewable energy, not the ministry. 

Also, we must dare to embrace the discussion – about renewable energy and about security of supply. 
Not just in theory, but also when it is actually happening; when hydropower is being developed, when wind turbines are being raised and when power lines are being built. 
 
Thank you for your attention and good luck with the rest of the conference!