New Energy for Norwegian Industry

Ladies and Gentlemen!
Thank you for the invitation to speak to you here at the beginning of this conference/workshop on "New Energy for Norwegian Industry".

As you know, Norway is fortunate to be rich in primary energy – both renewable like in our waterfalls, and oil and gas on our continental shelf. These supplies of primary energy have been an important basis for the country ’s economic growth. It is important for us to administer these resources in accordance with our long term goals and our long-term energy policy is closely linked to our environmental policies at large.

Oil and gas have been produced offshore Norway for about 30 years now. We are the third biggest net exporter of hydrocarbons in the world, and still close to 80 % of the resources remain in the reservoirs.

Hydropower accounts for 99 per cent of the electricity generated in Norway. The average production capability is about 113 TWh/year, which is sligtly more than we use in an avarage year.

We use only slightly more energy in Norway than the average OECD consumer. However, electricity accounts for 65 % of the stationary energy end use. This is considerably higher than in other countries. Access to rich supplies of relatively cheap hydropower is the main reason why the energy mix has developed in this way in Norway. A large energy-intensive industrial sector has developed and electricity is widely used to heat buildings and tap water.

There are still opportunities for further hydropower developments in Norway, but not to the extent we have been used to. So we have to look for ways to curb demand for electricity in the future. And we have to look for alternative sources of energy (as well). The challenge facing us both at home and internationally is to build an environmentally friendly and sustainable energy future. One of the important elements I beleive, will be to take advantage of local resources and build small scale facilities of energy production.

In Norway this means that we want to

• increase annual use of district and central heating based on new renewable energy sources, heat pumps and waste heat by 4 TWh by the year 2010; and
• construct wind generators with a production capacity of 3 TWh/year by the year 2010.

To ensure that we focuse on this shift in energy production and use we will create a national energy fund, and a special body will be set up to design the programmes and administer the use of the energy fund. The new body, which will be located in Trondheim, shall invest in alternative energy production and carry out measures to limit energy end use.

Natural gas will play an important role in a more environmentally friendly energy policy and we all know that gas can replace more polluting energy sources. Natural gas represents a potential for new business development and increased employment. I then think about natural gas both for energy purposes like electricity production, for heating, as fuel for cars, buses and local ferries, and as raw material in the industry. Natural gas must become an integrated part of the Norwegian energy system, and of the industry and transportation policy. There are quite a lot of possiblities for large scale use of natural gas in Norway, and it is high on the agenda for this

Government to increase mainland use of natural gas. In next year's budget we propose to support a pilot project for construction of gas pipelines that will make gas accessible to new users in the Bergen area, and we propose to grant 20 million NOK for this purpose.

Also in the other areas where gas terminals are located, like around Tjeldbergodden further north, and Kårstø here close to Haugesund, there is a lot of interest in using natural gas. In addition plans are being made to expand the use of gas both for energy and for industrial purposes in the Grenland area and in Trøndelag (Midt-Norge). It is my view that we have to encourage these initiatives and activities.

An increase is proposed in next years R&D-budget in our ministry. This increase will mainly be used to develop technologies for reducing emissions from gas-fired power plants. The proposal is to grant a minimum of 20 million NOK for this purpose.

Let us now look at hydrogen as energy carrier.
Today, Hydrogen is primarily used as a chemical feedstock in the petrochemical, food, electronics, and metallurgical processing industries. However, Hydrogen is rapidly emerging as a major component of clean sustainable energy systems.

Hydrogen is regarded by many participants in the public debate as the "ultimate" energy carrier in both senses of the word – the cleanest, and the final. Despite the technical challenges that have to be solved to make Hydrogen competitive in the market, growing concerns about global climate change and energy security may cause it to be introduced earlier than many expect.

The Government supports promising research projects and basic research activities on Hydrogen through research programmes managed by the Research Council of Norway. The user-oriented NYTEK- or "NewTech"-programme for efficient and renewable energy technologies, is an example. So is the basic research programme "Energy for the future".

Norway participates in international research programmes where Hydrogen is on the agenda. Through the International Energy Agency (IEA), Norway takes part in the programme on Production and Utilisation of Hydrogen and in the Greenhouse Gas R&D programme, which include research activities related to Hydrogen and fuel cells.

As party to the EEA Agreement, Norway takes part as a full member of the Fifth EU Framework Programme for Research and Technological Development. I know that in the recent revision of the energy part of the work programme, Hydrogen and fuel cells are given priority as short- and long-term target actions.

For Norway, participation in international activities is very important. This is so not least in the field of Hydrogen where R&D is extensive and long-term, covers a wide range of topics and technologies, and where most of the research activities are carried out abroad. International co-operation is important because

• it gives us knowledge of other countries' Hydrogen policies and of new technological developments,
• it contributes to increase our own competence in different fields,
• and not least, it gives Norwegian companies and research institutes an opportunity to contribute on the basis of their own knowledge and experience.
  

In this respect, we do indeed have some very interesting and competent Norwegian companies and institutes, for instance Norsk Hydro, Kværner, The Institute for Energy Technology (IFE), The Norwegian University of Science and Technology (NTNU), Agder College and The Norwegian Hydrogen Forum, are leading companies and institutes in this field. They are all involved in Hydrogen related activities, whether it is production of Hydrogen, or research or promotion of specific Hydrogen technologies. I am happy to see that they are not only doing excellent work in their fields, but in some areas they are in the forefront world wide.

In my mind there are at least three major issues that have to be solved before we can expect to use Hydrogen directly on a larger scale:

• there must be a final break-through for fuel cell technology,
• Hydrogen must be produced based on renewable energy and/or generated from hydrocarbons without release of CO ₂ to the atmosphere, and
• there must be satisfactory solutions available for storage and distribution of large quantities of Hydrogen.

Looking at the potential and the growing interest world wide for Hydrogen as an energy carrier, and looking at the Norwegian know-how and the industrial opportunities in this field, I think it is important to increase our attention on Hydrogen and Hydrogen related technologies to help meeting these challenges.

So I welcome the new strategy of the Research Council of Norway, where use of natural gas is one of the subjects given high priority. I understand that Hydrogen will gain increased attention. I hope this new strategy will materialize in a larger project aimed at increasing the competence in Hydrogen, but as far as I know this will very much depend on you, the research community - on what you can offer, and on the continued and even increased industrial engagement.

I believe that these issues will be discussed during the rest of today and tomorrow. I wish I could stay on and learn more about this fascinating area of future energy production and supply, and wish you a productive conference. Thank you for your attention!