Wind power - the paradox of plenty

Norway is blessed with abundant hydropower resources, holding approximately half of Europe’s reservoir capacity, and is the only industrialized nation meeting almost all of its domestic electricity needs through hydropower. However, Norway still needs to develop its wind power if it is to meet the EU’s 2020 goal for renewable energy and promote development of its power-intensive industries at home, says Øyvind Isachsen, Norwegian Wind Energy Association (NORWEA) secretary general.

Norway’s hydropower history dates back one hundred years. Today, industry accounts for one quarter of Norway’s hydropower electricity consumption, mostly from power intensive sectors such as aluminium and solar cell production. With the discovery of oil in the 1960s, the country has been able to sell its excess energy abroad as the world’s third largest gas exporter and fifth largest in oil.

Despite its energy self-sufficiency and high reliance on environmentally friendly energy, the country will still need to develop wind power if it is to fulfil the EU’s 2020 climate goals. It is believed that Norway may have to increase its renewables energy replacement rate from approximately 60% to 74%. If so, that would mean Norway would have to build 1,500 windmills by 2020, according to Isachsen. Norway currently has only 200 turbines.

The Norwegian Resources and Energy Directorate (NVE) believes it is technically possible to develop 30 TWh new electricity production by 2020. There are several ways of achieving that goal. Approximately 17 TW of that amount could come from wind power and the rest from hydropower, according to the directorate. A possible push will come from the recent agreement on a green certificate programme between Norway and Sweden to finance approximately 25 TW based on hydropower and wind power sources from 2012-2020.


Øyvind Isachsen, NORWEA secretary general.
© NORWEA



The Paradox

The problem is Norway is not developing its wind potential. The country produced 900 GWh of wind power in 2007 compared to top producers such as Germany with 39,712 GWh. So far, Norway has installed 431 MW of wind power divided among 18 wind power parks, a 2 MW increase from the previous year. The NVE estimates that the development potential for offshore wind power in shallow waters could be in the order of 6,000-30,000 MW.

Isachsen believes the country is stymied by this “paradox of plenty” whereby it does not feel the need to develop wind resources because of its large renewable energy production from hydropower. What’s more, by developing wind power, some fear it would increase supply and lower electricity prices, thus potentially jeopardizing part of the government’s income stream from hydropower. Norwegian electricity production and the national grid is almost 100% state-owned.

NORWEA argues that wind power would not pose a threat to hydropower. Rather, additional wind power would mean more hydropower for domestic use that could in turn encourage power-intensive industries to stay home, rather than build abroad. Norsk Hydro, for example, recently built the world’s largest primary aluminium plant in Qatar ever built in one phase, based on gas-fired power. More industries at home would mean more demand for power in general. Norwegian wind power would also help other industries make the switch from gas or coal to renewable hydropower energy.

“The story we are selling is that the Renewable Energy Directive is good for Norway, good for hydropower, good for new industry and the aluminium industry,” said Øistein Schmidt Galaaen, a NORWEA advisor.



 
Hundhammerfjell Wind Park in Nærøy, northern Norway, developed by Nord-Trøndelag Elektrisitetsverk. © Norwea




Save Europe, Get Paid

The other argument for developing wind is that it would enable Norway to serve as a battery for Europe. Additional wind power would make more hydropower available. Norway could use wind power for its own consumption and save the hydropower for export. It could even buy electricity at low prices when production is high on the Continent and sell high when wind turbines in Germany are not turning. That’s because Norway can more readily open and close a hydropower plant, whereas it can take 10 hours for a gas plant on the Continent to shut down.

“We can use wind for our consumption and save the hydropower and sell it (to Europe) when it has a very high price,” said Isachsen. “We have the resources. We have oil, gas, hydro and wind. We should utilize all these forms. The mixture of wind and hydro is a big asset. Europe needs it and we can use it.”

In order for this to happen, Norway sorely needs to build out its grid system. Statnett recently announced it had submitted a license application to the directorate for permission to build a new DC interconnector, NORD.LINK, between Norway and Germany. Once completed in 2016-2018, it will have a planned transmission capacity of 400 MW. NORD.LINK is one of Statnett’s four major cable projects planned for the coming decade. By 2020, interconnectors will be built to the Continent and UK with a total transmission capacity of up to 4,200 MW.

In addition, NorGer filed an application in April 2010 for building and operating an interconnector between Norway and Germany, potentially the first electricity cable connection between the two countries. The cable will have a capacity of 1,400 MW. NorGer, owned by Agder Energi, Lyse Produksjon and Elektrizitäts-Gesellschaft Laufenburg, said connecting the two markets would help reduce the overall price volatility in both countries and secure significantly lower prices for Norwegian consumers in extremely dry years.

“There is an understandable worry that more power will ruin the electricity price,” said Galaaen. “But with a sustainable business plan for domestic consumption, electricity-intensive industries and interconnectors to Europe, not only hydropower but also Norway as a whole would profit. The connection to Europe is very important.”

“We say save Europe and get paid,” added Isachsen.

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