Foils from the speech in pdf

Ladies and gentlemen,
First of all, I would like to welcome you all to Norway and Oslo! I am very pleased to have this opportunity to open the Eurelectric Convention 2006.

Energy is important everywhere – in industry, in business and in the home. Secure energy supplies are on the top of the political agenda.

Norway is well-endowed by nature with a number of primary energy sources, including crude oil, natural gas and water and wind power.

I would like to use this opportunity to make some remarks about Norway as an energy nation. About our recourses, the Norwegian and Nordic power market, and the Governments ambitious goals regarding capture, use and storage of CO2.

A Nation of Energy – Oil and Gas
The petroleum sector is the largest sector in Norway, responsible for one fourth of all value creation, and one fourth of the state’s revenue. Both the European and the global society depend on Norwegian petroleum products, as we are the world’s third largest exporter of oil and gas.

As one of the key players in the sector, it is essential that the government work on basis of long-term perspective.

A Nation of Energy – Electricity
Hydropower accounts for 99 per cent of the electricity generated in Norway, with an annual average production of about 119 Terawatt hours. The installed hydropower capacity is 28 300 MW. This makes Norway the sixth largest hydro power producer in the world and Norway has the world’s largest per capita hydro power production.

Norway is also Europe's leading producer of electricity based on renewable energy sources. The annual production of about 119 Terawatt hours is equivalent to almost one third of the total production of electricity from renewable energy sources in EU.

Norway has a large unutilized renewable energy potential from various sources. Nearest to a commercial breakthrough are wind power and bio energy, while abundant tidal and wave power holds promises for the future. Norway’s wind resources are especially large along the coast and in Northern Norway. The high wind velocity and the large open areas in Norway make wind power particularly favourable for production of renewable electricity. The existing hydro electric power system could handle the natural fluctuations in wind power production, even in the case of a very substantial development of wind power.

The Norwegian Power Market
In 1991 Norway was one of the first countries to introduce a market for production and trade of electricity and give all the consumer access to the market. The Norwegian power market is a fully deregulated market for electricity, while the transmission and distribution networks remain regulated. For example, since 1998 all consumers may shift supplier without any cost and choose between different contracts and suppliers.

Unlike most other countries, we have restructured the electricity sector without privatisation. 85 per cent of the Norwegian hydropower production is owned either by the state or the regional and the local authorities.

We have in this process since the introduction of the market reform developed an extensive regulation on different areas within the power sector in order to take care of the very important issues for society which are related to this industry. As an EEA country, we are implementing EU regulation. Today, security of energy supply has a major focus in the Norwegian debate, as I will comment later on.

Norway is an integrated part of the Nordic and the Northern European power market, where substantial amounts of power are traded over the power exchange– Nord Pool – in Oslo. From 2007 on our power system also will be connected to the Continental Europe with a new interconnector to the Netherlands.

The Nordic Power Market
The Nordic electricity market is a well functioning electricity market in Europe. A well-functioning electricity market is required to ensure a high level of security of energy supply and it secures an efficient use of our diverse energy portfolio within the Nordic countries.

The Nordic Council of Energy Ministers has declared that a further and deepened integration and harmonisation of the Nordic electricity market is desirable. The co-operation focuses in particular on an increased coordination of system responsibility, a further harmonisation of the framework for the market, underlining the principles for determination of trade capacities and congestion management in particular, and the development of the vision of an integrated Nordic end-user electricity market.

The Nordic energy market actors, specifically the TSOs and the regulators, have delivered a number of important and very good responses as fruitful inputs to the process.

The on-going process of harmonisation has proven to be beneficial to the Nordic electricity market. As the Chairman of the Council of the Nordic Energy Ministers in 2006, I will contribute to further development in this process.

Focus on Security of Energy Supply - The need for more production capacity
Security of Energy Supply is a very important issue in the Norwegian energy debate. Hydro power will in the years to come continue to be our main source of energy. From having an excess production of electricity in a year with normal precipitation in the early nineties, Norway now has a deficit in the power balance in a normal year. Norway has a net import of electricity of 6-7 Terawatt hours per year.

The government will foster investment in increased power production with an emphasis on environmental friendly power sources. This implies first and foremost to utilize the potential for upgrading of existing hydropower facilities and stimulate to increased development of small scale hydropower.

The yearly electricity production in Norway may vary with as much as +/- 30 TWh dependent on the precipitation. We therefore also need to foster investments in other energy sources than hydro power, like wind power, bio energy and gas.

Gas fired power plants
With Norway’s vast resources of natural gas, gas-fired power plants could be an important supplement to the hydropower system. So fare four licenses are given and applications for several others are received. So far, only one investment decision has been made, for the power plant at Kårstø. The Kårstø plant is planned to be in operation in the autumn of 2007

Energy requirements for the Snøhvit gas liquefaction project in Northern Norway are to be met by an integrated gas-fired power station providing 215 MW of electricity and 167 MW of heat. Plans call for an annual output of about 1,5 TWh. The gas fired power station is due to be completed before the Snøhvit gas liquefaction plant comes on stream in 2006.

There are a number of plans to build gas-fired power plants both in the southern, western and northern part of Norway. The use of natural gas in power production can contribute to a larger domestic market of natural gas. Further, gas fired power plants can give important contributions to a better security of supply of energy and to the generation of national earnings.

CO2-capture at Kårstø
Construction of Naturkrafts gas fired power plant at Kårstø has started. According to the company, the plant will be in operation in the autumn of 2007. It will produce 3,5 TWh a year, which is about 3 percent of the total yearly electricity production in Norway. The plant is covered by the Norwegian quota system for CO2 in the period 2005-2007.

The government has started the planning of capture of CO2 at the plant with the aim of establishing a CO2-capture facility at the sight by the end of 2009.

Ambitious goals to realize CCS…
The Government has ambitious goals regarding capture, use and storage of CO ₂ with a demanding timetable

In addition to the CO2-capture plan at Kårstø where the Government will contribute financially are there initiated two projects:

Cooperate with industry on realizing capture of CO ₂ at gas fired power plants as soon as possible – the Government will contribute financially.

A state corporation will be given the job of establishing a value chain for transportation and injection of CO ₂ – the Government will contribute financially

…and the work has started
The implementation of these projects has started. The Government has allocated 80 million NOK to this work in 2006.

The aim of the industry cooperation project is to bring the commercial actors together - going beyond the assessment and study-phase. The idea is that initial negotiations between potential sellers, i.e. industry point sources and potential buyers of CO ₂, i.e. the oil companies, will give a clearer picture of and willingness to pay for CO ₂, in short: the commercial interest in the CO ₂-chain.

The timetable to establish a capture facility at the Kårstø gas fired power plant is tight – As I said earlier the Government's goal is 2009. The project will be conducted in close cooperation with potential suppliers of post-combustion capture technology.

The value chain project will be important as a basis for decisions on the best organisation of state involvement in the CO ₂-chain. Extensive legal assessments will be conducted on the opportunities and boundaries for Government involvement – in particular on state aid regulations.

TheKyotochallenge
As I said earlier Kårstø is covered by the Norwegian quota system for CO2 in the period 2005-2007. The national quota system for CO2 was established in 2005 as a follow-up to the Kyoto Protocol and includes several industries.

Norway is fully committed to reach our Kyoto target. The Norwegian Kyoto target allows for a maximum 1 percent emissions increase relative to the base year of 1990, equivalent to 50.6 million tons CO2 per year. We have to reduce today's emissions by 8 percent to reach the Kyoto target.

Drivers for promoting energy efficiency
and renewable energy
The basis in the Norwegian electricity production is hydropower. This makes the electricity production emission free, but dependent on fluctuation in the precipitation. Norway needs to increase the energy production and the possibilities for new large scale hydropower production are limited.

To meet this challenge we must look for new renewable energy sources and more efficient use of existing resources.

We must:

• Diversify the energy sector
• Create a market for new energy solutions
• Focus both on the supply, transport and demand side

The authorities' role is to push the market and arrange the necessary framework for the market development. It is now necessary to give financial support to new energy solutions so that they can be offered in the market.

The energy agency Enova is the Government's main instrument to promote this policy.

Yesterday I proudly presented a new state fund for renewable energy and energy efficiency. The fund amounts to 20 billion Norwegian kroner or 2.5 billion euro. The proceedings from the fund will be disposed of by government agency Enova. The size of the fund implies that effort in promoting renewable and energy efficiency will be more than doubled.

Today the Energy fund is based on a levy on the transmission tariff for electricity. In 2006 this levy is approximately 700 mill NOK or € 90 million.

The aim is to increase the production of new renewable energy and energy efficiency to 30 terawatt hours in 2016.

The new fund will give a predictable, long term framework for the industry in this field. The Ministry will explore and implement a feed-in system for renewable electricity within this framework of the fund. A new feature is that hydropower projects will get support up to 3 MW. There is no support for small scale hydropower today.

Importantprinciples for Enova
I will add that Enova work according to some important principles:

The most important criteria for project selection will be kilowatt-hours saved in energy saving projects) or new capacity installed in energy supply projects in proportion to the amount of support.

Enova evaluates energy efficiency and renewable energy, heat and electricity in the same framework and evaluate them equally.

Ladies and gentlemen,
The next coming years will indeed be a watershed period for European energy policy.

We have to use our knowledge to develop technologies and solutions which do not conflict with consideration for the environment.

So once again I would like to welcome you all to Oslo! And wish you all some stimulating, valuable and enjoyable days!