Norway and China – market opportunities and industrial collaboration

Opening address by State Secretary Sigrid Hjørnegård at Offshore Wind China 2010 in Bergen, Norway, 15.03.2010.

The State Secretary Sigrid Hjørnegård's speech was based on the following:

Ladies and Gentlemen,
It is an honour for me to open this conference. I am pleased to see such a distinguished gathering, many of you making the long journey from China to Bergen

First, I would like thank the organisers; China Renewable Energy Industry Association, the Norwegian Consulate General in Guangzhou, World Wide Fund for Nature and Innovation Norway Hordaland. 

This seminar on offshore wind here in Bergen marks the first step in establishing a closer Sino-Norwegian partnership in this particular field.
It coincides very well that Parliament last Thursday enacted a major new piece of legislation on development of offshore energy.

Norway and China
There has been close co-operation between the Ministry of Petroleum and Energy and China for many years. In September 2006, NDRC and MPE signed a Memorandum of Understanding on Enhancing Cooperation in Energy Conservation and Renewable Energy. Offshore wind power fits well in here.

China is a major global player in renewable energy. China is already number 1 in the world in hydropower production and is rapidly developing it’s vast windpower potential. The newest figures form the World Wind Energy Report 2009 shows that China climbed to the second place in 2009 among the world’s leading wind power producers. China added close to 14 Gigawatt, and more than doubled the total capacity just in one year!

Starting in Shanghai 1 May this year, EXPO 2010 will gather millions of visitors from all around the world to familiarise themselves with technical innovations under the theme “Better City, Better Life”.

In connection with Norway Day 28 May, there will be several seminars on renewable energy. Wind power will have a  central place, and I hope many of you present here today will find time to attend these events.

The Minister of Petroleum of Energy will visit China on this occasion, and he will use the opportunity to enhance the good relationship with NDRC.

Why focus on windpower?
One fifth of the world’s population lacks access to electricity. At the same time the world faces a serious climate change challenge, which to a large extent is caused by the increasing demand for energy.

The twin challenges posed by climate change and securing enough energy for people are probably the most important challenges of our lifetime.
We must therefore seek to explore all options of developing the various sources of renewable energy.

Currently, renewable energy provides about 18 per cent of the world’s electricity. Worldwide, there is a call for large-scale deployments of renewable energy.

The world’s wind power capacity grew by 32 per cent in 2009, the highest rate since 2001. More than 38 Gigawatt were added, bringing the total installations up to 159 Gigawatt. A third of these additions were made in China, which experienced yet another year of more than 100 per cent growth.

Wind energy is now an important player in the world’s energy markets. The global wind market for turbine installations in 2009 was worth about 50 billion Euros. More than half a million people are now employed by the wind industry around the world. By 2010 it is expected that the wind industry will employ more than 1 million people.

So far, most wind farms have been developed onshore, but there is an increasing trend towards more projects being developed offshore.
We will learn more about this during today’s conference.

Norway and renewable energy
Norway has been a major producer of renewable energy for more than one hundred years. This is thanks to our hydropower resources, making Norway the world’s 6th largest hydropower producer. Hydropower’s share of our electricity production is close to 100 per cent. The result is that the share of renewable energy in Norway’s total energy consumption is higher than 60 per cent.

If you compare this to the European Union’s target of a 20 per cent share by 2020, you will realise that Norway has advanced quite far in developing renewable energy. In addition, close to 50 per cent of the reservoir capacity in Europe is located in Norway. Some has branded Norway as the “Renewable Battery of Europe”.  This function is important in order to provide peak power for our neighboring countries. 
 
The future role of renewables in Europe and Norway
The potential for producing more renewable energy in Norway is huge. Offshore wind has an enormous potential we can tap into if we get the technology and economy in these projects right. Looking a decade or so into the future, I believe we can develop floating windmills which can harvest this resource.

Offshore wind power development is important and relevant for Norway because of two fundamental reasons:
o We have the industrial know- how and
o We have vast wind resources

With our hydro storage capacity and stronger interconnections, offshore wind from the Norwegian Continental shelf may become a major supplier of clean electricity to Europe in the future.

Given the right circumstances, offshore wind energy may even become the next adventure for the Norwegian industry and energy sector.
However, a future large-scale development of offshore renewable energy production presents us with a number of challenges. The challenges range from technology development and economic viability to legal and regulatory issues.

What must be in place?
Legal framework
As I briefly mentioned in my introduction, the Ministry has presented a Draft Bill to Parliament on offshore renewable energy. Such a legal and regulatory framework is a necessary basis for developing this branch of the “green” energy sector. In addition, we put forward a strategy for developing offshore wind power. I am very pleased that Parliament last Thursday enacted the Draft Bill.

The Act is an important milestone in the long-term efforts of the Government to develop our offshore renewable energy resources. . The new Act points out the direction for the long-term efforts needed in the offshore wind power sector. We want to use this as a basis to develop “new” Norwegian technologies and sustain a thriving energy industry.

Offshore Grid
Offshore wind power cannot be developed without also taking into account an offshore grid development. International cooperation is of great importance concerning development of a North Sea grid. It is also important in our work with the offshore renewable energy strategy and the identification of areas suitable for offshore wind power.

Research and Development
In order for offshore wind to be truly competitive, costs must be brought down and new ideas developed and implemented. The industry has to take the major responsibility for this but the Government will also play an active part. It is important that the public and private sector work hand in hand.  The Government has therefore increased research budgets on renewable energy with around 300 per cent from 2007 to 2010.

To underpin this effort, we have also set up a new instrument: Centres for Environment-friendly energy research. As many as three out of the eight centres focuses on offshore wind energy.

Public financial support
We have spent 880 million Euro through our public agency Enova to support renewable energy and energy efficiency since 2006. Support for demonstration of new offshore technologies is given priority, and budgets for new technology demonstration have been considerably strengthened
A dedicated program for the demonstration of marine energy technologies has also been established.
 
Some projects:
In September 2009, the world’s first full-scale floating wind turbine – Hywind – was started up southwest of Bergen, by Statoil. The project was supported with about 7 million Euros.

Hywind illustrates how we may benefit from the knowledge we have gained from our petroleum industry, to develop innovative technology concerning renewable resources.

Another offshore wind company, Sway, recently announced its plans to build a 10 MW wind turbine in Øygarden, just outside of Bergen. The new technology will be tested on land over the next two years. The wind turbine will be the world's largest of its kind, with a rotor diameter of 145 meters.

The 2 largest Norwegian energy companies, Statkraft and Statoil, recently won concessions to build offshore wind parks in the UK.  A consortium called Forewind has gained rights to the Dogger Bank area – by far the largest area in licensing Round 3, which aims to deliver a quarter of the UK electricity needs by 2020.

I am pleased to see that Statoil and Statkraft decided to take part in this large offshore wind power development in UK. Participation in such large developments will give a boost in the offshore wind power competence for the Norwegian companies involved.

Cost effectiveness
To be more cost effective means that you will be more competitive. You must be competitive both in the global wind market, but also competitive with other energy sources. Being “only” green and clean is not enough in the long run. It is therefore vital that companies and research institutions now position themselves in order to enter the offshore wind market.
A closer cooperation between China and Norway in this area could benefit both countries and bring down costs.

Closing remarks
This Sino-Norwegian collaboration will continue at the Offshore Wind China 2010 in June in Shanghai. I am proud that Norway, through our Consulate General in Guangzhou and Innovation Norway, is chosen as overseas co-organizer together with CREIA, Global Wind Energy Council and Shanghai International Exhibition. By organising this conference, China is showing a true commitment to developing offshore wind power. I hope that these events will strengthen the relations between our authorities and industries.

I will conclude by expressing my sincere belief in a bright future for offshore wind power.

I wish you good luck with the Conference and I hope you will enjoy fruitful and interesting discussions.

Thank you for your attention!