January 30, 2023

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2030 – Demands more power towards E24

2030 – Demands more power towards E24

A number of recent reports have indicated that Norway needs large amounts of new energy until 2030 to meet climate targets and develop new industry. Now consulting firm Pwc is also joining the energy debate.

This picture was taken from the Skjerkevatn dam in Åseral.
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This autumn there have been several reports pointing to the need to increase power generation if Norway is to meet its 2030 climate targets and create new industry.

Now reports Consulting firm Pwc also joined the debate, “Is Power Enough for the Green Transition?”

Like previous reports, it says Norway will need more electricity until 2030, more than expected from new power generation.

– Assuming that Norwegian CO₂ emissions are to be halved while at the same time facilitating new green industry, according to our analysis, this would lead to an increase in Norwegian consumption of up to 70 TWh, which is about 50 percent. Current consumption of 135 TWh, a step says director Øystein Fossen Thorud at PwC news.

The report was not commissioned but prepared on the company’s own initiative.

From left: Pwc director Øystein Fossen Thorud, Pwc partner André Kopperud Gill and Pwc partner Stian Gårdsvoll.

– agreed

– Those who worked on mapping the electricity needs for the green transition agreed that new electricity was needed. “We feel that the discussion about power needs has somewhat deviated from climate aspirations,” Thorud explains to E24.

– We need to start having the courage to say how we are going to actually achieve the climate goals, because there is very little time left. For me, in order to meet climate goals and create new industries, we need to start setting targets for how much power different energy sources can give us and when they can be produced. Then we can evaluate whether what we are doing is enough, he adds.

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Many politicians believe that offshore wind will eventually provide Norway with new energy. This will probably cost money, because unlike some offshore wind power projects, offshore wind is not yet profitable at normal Norwegian electricity price levels.

– We also need to see what it costs to get this new power. A question is whether it will be competitively priced if you invest only in the most expensive forms of energy, for example industrial ventures, Thorut says.

– Offshore wind has some advantages compared to other forms of energy, but is more expensive to develop than some alternatives, he says.

Thorud is keen to think more about finance.

– We have to take nature into account when we make plans, he says.

Read on E24+

A new, large consumer of electricity

Pwc considers power demand going forward. The increase in consumption has been fueled by Norway’s plans to switch from fossil fuels to renewable energy and facilitate new industry.
Pwc estimates that if Norway is to continue to be power surplus at the same rate as today, around 75 terawatt hours (TWh) of additional power generation will be needed by 2030.

The surplus can be eaten

Last year, Norway had an electricity consumption of 140 terawatt hours (TWh), while generation was around 157 TWh, which means an electricity surplus of around 17 TWh.

Although consumption is expected to increase, little new production is being created. Grid operator StateNet recently estimated that the power surplus will be reduced by 2027. Consumption growth is expected from anticipated climate actions in existing industries, electrification of oil and gas facilities, and growth of new industries such as battery industries. and hydrogen production.

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For example, Yara needs four TWh to electrify the ammonia plant in Borskrun, and Equinor needs three TWh to electrify the Melkøya plant in Hammerfest. E24 recently surveyed some of the newer, larger power consumers.

According to Pwc, it will be difficult to do business in Norway if electricity prices are higher than before.

– If we want to facilitate the further development of this part of the industry, it must approach the power to compete with other countries in the future. The alternative is not power shortages, but the risk of industry closures and the failure to establish new industries, says Pwc partner André Kopperud Gill, according to a company news release.

Read on

StatNet’s new analysis: Power shortages likely by 2027

– Great political courage will be required

Pwc believes the political framework conditions are the biggest obstacle to new renewable generation, and lists several challenges:

  • Wind power is not favored in Norwegian nature (unless development is supported locally).
  • Subsidized development of offshore wind on a large scale is not desirable, and Pwc does not expect it to be commercially viable in Norway in the near future.
  • There is no option yet to connect offshore wind to the continent (hybrid cables) so that the profits are sufficient
  • The National Budget introduces a higher tax on hydropower, calling into question the profitability of many planned investments.
  • Power companies have limited investment potential after taxes and dividends to public owners
  • Ownership of hydropower is public, and it is difficult to raise reasonable development capital from private investors
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Pwc points out that if structural conditions are right, businesses and private capital are poised to develop more power.

– Investing in new power generation will require great political courage, but we are dependent on growth starting now. Alternatively, we can continue to push the problem in front of us with the risk that we will have to sacrifice both welfare, nature and the climate, says Pwc partner Stian Gårdsvoll in a news release.

– Difficult to estimate

On Wednesday, Storting representative Terje Halleland (FrP) received Answers Oil and Energy Minister Terje Ösland told (AP) how much electricity production is needed to meet Norway’s climate target of 55 percent emissions reductions by 2030.

“It’s difficult to estimate how much power generation will be needed in the future,” Ausland replies.

Minister points out that NVE Estimated last year Norway’s electricity consumption may increase to 159 TWh in 2030, roughly corresponding to today’s production level.

“As the government sees it, access to more renewable energy is a central prerequisite for many of the measures that Norway needs to implement to achieve our new, more ambitious climate goal,” Ausland writes.

“Today, Norway has a power surplus with normal weather this year. As a result of increased electrification of society, the government believes a change of pace is needed in terms of increased production of renewable electricity and increased grid capacity to meet increased demand,” he added.

Asland pointed out that the government has ambitious plans for the development of offshore wind. However, there is no government target for offshore wind in 2030. The 30 GW offshore wind target applies only to 2040. It can provide 120 TWh of electricity per year at full operation of 4,000 hours per year. . This corresponds to the current annual electricity consumption in Norway.

Ausland points out that the licensing process for wind power in the municipalities that agree should be restarted. However, so far few municipalities are interested in new wind power.

Asland pointed out that the government also wants to develop hydropower plants.

He also mentions the Energy Commission, which will evaluate Norway’s energy policy and issue a report in February.

Oil and Energy Minister Terje Ausland (Apr).