Opening address at Offshore Wind China 2010

Opening address at Offshore Wind China by State Secretary Robin Martin Kåss, Ministry of Petroleum and Energy, Shanghai, 07.06.2010.

Ladies and Gentlemen,
It is an honour for me to open this conference and a pleasure to visit China. This is my first visit, but definitely not the last. I really enjoy being here in Shanghai.

In connection with EXPO, the Ministry of Petroleum has been involved in several activities to promote co-operation with China in the energy field. Two weeks ago, the Minister of Petroleum of Energy visited and  met with key players in the energy field, including the petroleum sector.  He was very impressed with EXPO, and came back with inspiration and enthusiasm.

Today’s  seminar  is another  step in enhancing  Sino-Norwegian co-operation in the energy field.

China is large in most areas, whereas Norway is very small. However, in the two fields of  offshore activities and energy Norway is also a giant.

I would like thank the organisers; China Renewable Energy Industry Association, Shanghai International Exhibition and the Norwegian Consulate General in Guangzhou for organising this event.

Global perspective – the role of wind power
Before I talk about Norwegian policies in the field of offshore wind, I would like to say some words about the role of wind power in a global perspective.

Today 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 main challenges of our lifetime.

Increased use of renewable energy has to be part of the solution, including investments in production, grid and energy efficiency.

Currently, renewable energy provides about 18 per cent of the world’s electricity. There is a substantial potential for increasing this share. Because of its availability, we expect wind power to play a vital role.

The offshore wind potential is substantial and the market is developing rapidly. Wind turbines offshore seem to be more publicly acceptable than onshore. However, we need to get the technology and economy right. Both Chinese and Norwegian supply industry can play an important role in this.
Prospects are indeed good: The wind energy sector has already grown considerably. According to the World Wind Energy Association, the global wind market for turbine installations in 2009 was worth more than 60 billion US dollars . By 2012 it is expected that the wind industry will employ more than 1 million people. These numbers may seem modest in a Chinese context, because you are such a big country. But we must not forget that this industry is in its early dawn.

Norway and China
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 latest figures form the World Wind Energy Report 2009 shows that China is second 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! This is impressive.

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

I also think the good relations between China and Norway in the petroleum sector can underpin industry collaboration that is highly relevant for offshore wind energy. There is a lot of valuable experience to be drawn from the petroleum sector when it comes to managing complex projects at sea. Many Norwegian companies involved in oil and gas activities diversify into offshore wind power.

Norway 
Norway has been a major producer of hydropower for more than one hundred years. 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 about 60 per cent.

Offshore wind power development is relevant for Norway because of three fundamental reasons:

• First, we have vast offshore wind resources,
• Second, we have 50 per cent of Europe’s hydropower reservoir capacity and
• Third we have industrial know-how in important areas.

Offshore wind power from the Norwegian Continental Shelf may become a major source of supply for clean electricity to Europe.  By combining our hydropower storage capacity with stronger interconnections, this is possible to achieve.

Government policies
Our vision is that offshore wind energy should become the next chapter in the history of our energy industry. However, 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.

We politicians must do our part. So far we have delivered on a range of issues. To illustrate, I will highlight the following: legal framework, offshore grid co-operation and Research and Development

Legal framework
An adequate legal and regulatory framework is necessary for developing this branch of the “green” energy sector.

In March this year, the Parliament enacted the Ministry’s Draft Bill on Offshore renewable energy.  We are confident that this legal framework will be seen as a historic milestone 50 years from now. 

Offshore Grid Cooperation
There will be little utilization of offshore energy sources without a parallel development of a grid system that can transport the electricity. This is a challenge facing all nations.

International cooperation will therefore play an important role.
Thus, Nine European countries have signed a declaration called «The North Seas Countries Offshore Grid Initiative».  The goal is to coordinate the development of an offshore grid in the North Sea and to connect it to installations on the mainland.

Research and Development
In order for offshore wind to be attractive, costs must be brought down. This is a challenge that has to be addressed by the industry. The public sector should also contribute. Government funding for research, development and demonstration is a priority.

Thus, our R&D budget for renewable energy has been increased from about 25 million US dollars in 2007 to around 100 million today.

This includes three Centres for Environment-friendly energy research that target different aspects of developing offshore wind energy.
In September 2009, the world’s first full-scale floating wind turbine – Hywind – was successfully started up by Statoil offshore western Norway. Hywind illustrates how we may benefit from the knowledge gained from our petroleum industry.

Another offshore wind company, Sway, recently announced its plans to build and test a 10 MW wind turbine offshore Bergen. This will be the world’s largest in its kind.

Both these demonstration projects have received government funding.
 General Electric recently chose to invest about 95 million US dollars in Norway to develop offshore wind technology, including demonstration.  This I find very encouraging because we would like Norway to be an attractive country to invest in. 

Internationalisation
The Government is also wants to facilitate the internationalisation of the Norwegian renewable sector. To promote Norwegian renewable industry in international markets, we have established INTPOW – Norwegian Renewable Energy Partners.

INTPOW is a private-public partnership where the Government works very closely with the industry. INTPOW has members representing different energy sectors like hydropower, wind, solar and power market operations.

INTPOW organised the seminar Norwegian Energy Day here in Shanghai just a week ago. This is another sign of the importance Norway attaches to China in the energy field.

Closing
During EXPO 2010,  millions of visitors from all around the world will familiarise themselves the theme “Better City, Better Life”.

In this lies tremendous room for innovations  - and I am sure that Sino-Norwegian partnership will help such innovation take place.
The  companies present here today, I am sure, will bring about new business models and technology to make it happen.

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

I wish you all good luck with the conference!

Thank you for your attention!