Speech at the Scan-REF conference

Ladies and gentlemen,

I would like to thank the organisers of Scan-REF to let me speak to you today.

It is a pleasure for me to address this audience, gathered to discuss alternatives for future, cleaner, energy alternatives.

The world is facing serious challenges.

The global economy is projected to grow four-fold between now and 2050.  This means that a lot more energy is needed.

Nearly all of the increased energy use will come from developing countries, as a result of economic growth and improved standards of living in these countries.

Given the current energy mix, a vast increase in energy consumption will result in dramatically higher CO2-emissions levels. 

This summer the International Energy Agency published a study that estimates what needs to be done in order to return CO2 emissions to current levels by 2050, and details for what could be done to reduce them by 50 per cent in the same timeframe.

The study concludes that a global energy revolution is needed if we are to prevent unsustainable pressure on natural resources and the environment.

In Norway we have been lucky when it comes to energy resources, both fossil and renewable ones. This has left us in a situation where we are now the world’s fifth largest oil exporting nation and third largest gas exporter.

For Norway it is not a question of either petroleum or renewable energy, but both. We have launched ambitious goals to reduce our environmental footprint.

And Norway, as an important energy producer, will do its part to overcome the challenges represented by an increasing demand of energy.

This means we ought to orient ourselves towards several goals: how to stimulate a quicker phase-in and development of renewables, how to ramp up energy efficiency and how to achieve a step change in the development of carbon capture and storage technologies.

Considering the fact that the world will have to rely on fossil fuels for a long time ahead, we have to acknowledge that carbon capture and storage will have to serve as the bridge connecting our current energy systems with a large-scale implementation of low-carbon solutions.

Nature has provided Norway with abundant reserves of renewable resources like water, wind and bioenergy.

We are the world’s sixth largest producer of hydropower, and number one in Europe. This actually covers about 99 per cent of our electricity consumption.

The use of renewable sources apart from hydro power, however, is limited compared to other countries.

Together with technologies for carbon capture and storage, the development of these renewable energy sources is vital to the Norwegian Government’s mission to achieve a low carbon energy future.

The Norwegian Government has responded to the challenge posed by rising CO2-emissions: 

-          By 2020 we shall have reduced greenhouse gas emissions by the equivalent of 30 per cent of our 1990 emissions. 

-          About two-thirds of our emission reductions in 2020 will be cuts in domestic emissions, bringing Norway on the path to a low carbon society.

-          And, we intend to become a carbon neutral nation within 2030.

As a large supplier of oil and gas, Norway has a responsibility to develop environmentally friendly technologies and policies.

In my view it is necessary that we welcome, promote and contribute to fund research, innovation and technologies that will help us mitigate climate change.

Additionally, we have industrial and technological competencies which put us in a very favourable position:
We have century long experience in hydro power development.

We have world class petroleum and marine industries.

We have a solid and highly skilled process industry.

And we have developed advanced competence in such areas as material technology and solar cells.

CCS

CCS technology is one of several possible alternatives which the Norwegian Government is actively pursuing.

According to the International Energy Agency, about one-fifth of the necessary reductions in order to avoid a 2-degree Celsius temperature increase, can be accomplished through CCS.

Norway already has extensive experience with CO2 storage. Every year since 1996, one million tons of CO2 have been separated from the gas production at Sleipner and stored in the Utsira formation. Multinational research projects have collected relevant data in the formation, and developed and demonstrated prediction
methods for the movement of the CO2 for many years into the future .

The data show the precise subsurface location of the CO2 plume and confirms that there is no sign of leakage.  
The Norwegian Government’s policy is that all new gas fired power plants shall be based on technology for CO2 capture.

The Government has initiated several CCS-projects already:

In 2006, the State and StatoilHydro agreed on developing CCS technology at Mongstad in two stages: First, a CO2 capture test center, TCM, with start-up in 2011. Second, the TCM is to be followed by the construction of a full scale carbon capture plant at a later stage.

The purpose of the test centre is to develop, test and qualify CCS technologies, and with that reduce the costs and risks related to full-scale carbon capture.

The development of cost-effective technology is imperative to making CCS an attractive and effective means to combat global warming. The planning of TCM is in progress with Dong, Shell and Vattenfall, in addition to StatoilHydro, as involved participants

Later this year, these companies will decide on their involvement in the actual construction and operation of the test centre, in cooperation with Gassnova and StatoilHydro.

And through the planning of a full-scale CCS retrofit solution at Kårstø, we will attain valuable knowledge on how CCS can be implemented on a large scale.
But we will not come very far without somewhere to store the CO2.

The Government is working actively towards establishing a CO2 transport and storage solution. Gassnova, in collaboration with the Norwegian Petroleum Directorate and Gassco, are now in the process of analysing various solutions for safe storage of CO2.

Renewable energy and energy efficiency

Improving energy efficiency and increasing production of renewable energy are two other obvious options in order to move our energy usage in a more sustainable direction.

As I said, almost all of our electricity consumption is based on renewable energy: hydro power. And we are proud of that fact.

But I strongly believe that we still can realise important contributions in this area.

A core element of the Government’s policies is to be in the forefront when developing our renewable energy resources and using them efficiently.

This includes a continued development of hydro power as well as increased development of other renewable energy resources.

In 2006, the Norwegian Government established a national combined target of 30 Terra Watt hours of increased annual production of renewable energy and energy efficiency (from 2001 to) by the year 2016. This is a highly prioritised area for the Government – which is why we increased the funding levels dramatically this year.
Enova, the state enterprise for renewable energy development and energy efficiency, is our most important instrument in this respect.

Specifically, we have high ambitions regarding bio-energy and land-based wind power development. We have launched a strategy for bio-energy which will not only increase the utilisation of our bio resources in Norway, but contribute to our security of supply situation on the whole.
Moreover, our ambitions regarding a three terawatt-hour development of wind power is well on the way to be met. By January 2008, licensing applications totalling around 4000 mega watts had been registered with the authorities.

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We are all part of the total pattern of consumption.  The beneficial effects of introducing energy efficiency in homes, public and business buildings and in industry is often underestimated.

According to the International Energy Agency, the global potential for energy saving is massive.

For instance, if China replaces all air-conditioning and refrigerators with the most energy efficient option, it would be saving energy equivalent to the capacity of the Three Gorges by 2020.

This example illustrates the potential of energy efficiency, but to trigger this we need millions of households to actively make changes. It goes without saying that this is not an easy task. We politicians need to implement policies that promote this change.
We have a large unrealised potential for energy efficiency here in Norway as well, and the issue remains high on the Government’s agenda. 

In 2007, Enova signed contracts which will secure reductions in energy consumption corresponding to 1.2 terawatt hours. The largest part of the reductions will come from improved energy management in industry.

Research and technology development

Norway is an energy nation. We are well-positioned technically, politically and socially to use our renewable energy capacity to serve the common good.

Norwegian companies within the energy sector are strong, both at home and abroad.

As part of an agreement between the Government and most of the opposition parties, it was decided to increase spending levels considerably on research on renewable energy sources and CCS. Next year public funding will increase by 36 million Euros. This is a political milestone for me and my government.
But the money is not well spent if we do not have a clear idea of where it is put to good use. We have to lend ears to the industry and the actors who perform the actual R&D work. The stakeholders.

Together with the industry and the research community, we have come up with a common strategy for research on energy efficiency and renewable energy, Energy 21. Energy 21 is a result of a unique cooperative effort.

The Government’s ambition is to become a net exporter of renewable energy and green technology.

Energy 21 will help us realise our ambitious objectives for the energy sector. Novel energy technologies may provide us with new industrial opportunities, much like the petroleum sector has been – and still is.

Energy 21 highlights five specific areas for where R&D resources should be spent:

-  Energy efficiency

- Renewable power production – specifically hydro power, wind offshore and onshore and solar power.

- Low emissions heating

- An energy system for future needs

- Business framework and society impact

The wind power potential is vast in Norway. Both on land and off shore.

The Ministry of Petroleum and Energy is now working on a national strategy for power production from marine energy sources.

Offshore windmills are a very clear example where technology transfer from the petroleum and marine industries benefit renewable energy production.

An exciting scenario is a future European Super Grid where European electricity infrastructure is linked together on a large scale. Off shore wind can supply large parts of the electricity demand, with Norwegian hydro power serving as back-up batteries.
There is no doubt that a large scale development of floating offshore wind turbines off the coast of Norway would be a quantum leap for renewable energy production.

Solar energy is in abundance globally. And there are numerous ways to tap this resource. Norwegian companies have been able to enter this market successfully, thanks to a combination of entrepreneurship and key competencies.

It is not a coincidence. As I said earlier, we have a large process industry sector and as well as highly skilled competence in material technology. 

This has proven to be solid stepping stones towards the establishment of what are now global companies: I think it is impressive that we now see Norwegian companies setting up facilities in Singapore. REC is a good example.

In order to strengthen our best research and development institutions, the Government has chosen to set up Research Centres for Environmentally Friendly Energy.

Following the Energy 21 strategy, these Centres are supposed to support our best qualified R&D establishments within CCS and renewable energy.

The first call for proposals was held earlier this year. To my pleasure, there was a rather overwhelming interest from the research sector.  Five to seven of the applicants will achieve Centre status and the successful ones will be selected early next year.

The world still needs oil and gas in the decades to come.

But we have become acutely aware of the climate challenges.

We need the same initiative and the same boldness to face today’s challenges as the petroleum pioneers proved forty years ago

There remains much to be done until renewable alternatives will make a very substantial difference in the energy mix. Many obstacles will have to be overcome if we are to realise a scenario where offshore wind parks are connected to Europe in one, large grid.

And before then, other alternatives which we do not see as clearly today might have come up.

However, no progress will be made without the industrial strength and know-how which is represented in the industries and research institutions.

I hope and believe that ScanREF can be a part of the process where ideas and visions turn into reality.

Thank you for your attention!