Global and European Energy Challenges: Viewpoints from Norway

Global Challenges
Securing energy supply is a major challenge in a world where energy demand may increase by more than 50 per cent by 2030. Fossil fuels will, according to what we know today, have the same relative importance in the energy mix in the years to come as they have today – approximately 80 per cent.

An overriding challenge is to ensure the most environmentally friendly production and use of fossile fuels, and at the same time pave the way for renewable energy to cover a growing and noticeable share of the energy mix.

To reduce the global gap between rich and the poor is essential and developing countries must be allowed access to energy.

 

The Norwegian point of view
Norway is the only large energy producer that is fully a part of EU Single Market through our association agreement with the EU – the EEA agreement.

Norway is an essential supplier of gas to North Western Europe and we currently supply around 16 % of European consumption. Our gas production today is 3 times higher than it was in 1995 - and it is still increasing i.e. from 85 bcm. to 120 bcm in a few years. Norway adds noticeably to the security of supply in Europe and it is of crucial importance for us to remain a secure supplier of gas.

Norway – despite and because of our role as a big producer of fossil fuels – wants to be part of the global efforts to reduce GHG emissions.

 

Responsible partners and European energy policies
We need to balance our energy policies between the aims of security of supply, competitiveness and sustainable energy. Sustainable energy policies on energy efficiency, renewable energy and the active policies of promoting energy technologies must be kept high on the agenda. In addition we need a global commitment for an ambitious climate policy regime beyond 2012 and increased international cooperation. More countries must join a post-Kyoto regime.

In the meantime we should continue testing out Kyoto mechanisms amongst others in this region. The Baltic Sea Regional Energy Cooperation has been a useful tool for this. We look forward to see the concrete results.

The EU “policy packages” implementing European energy policies in key areas address sustainable energy on energy efficiency, renewable energy and energy technologies (including CCS). Norway has a firm commitment to contribute to and impact the results. Policies to promote energy efficiency leads to a “win-win situation”. This will be beneficial to the end user, the economy and the environment. Successful full-scale CCS is necessary to reach common goals on reducing emissions. We must facilitate framework conditions which clearly promote and facilitate CCS projects. Best practices should be shared in wider international and pan-European cooperation like here today, and keeping an open mind as to what technologies will be the most efficient in the end.

A new EU energy market package has been submitted. Norway supports framework conditions for efficient and functioning sustainable energy markets. The Nordic regional market is a relevant example. Our focus, working with the EU in this respect, will be threefold (1) Promoting reduction of GHG emissions /implementation of CCS project and technology development, (2) developing the integrated market balancing industry, environment and development and (3) to ensure open, transparent and predictable market conditions.

 

Energy efficiency and renewable energy
We have already a very high share of renewables in Norway with hydropower for electricity production. We see a future potential for energy companies to invest in wind (including offshore wind), bioenergy and small hydro.

A key feature in Norway is to achieve our long term combined target of 30 TWh productions from renewable energy sources and energy savings per year in 2016, compared to the 2001 level.

 

Energy technologies and CCS
Recognizing the huge risks in global warming brings, the Norwegian Government aims to make carbon capture and storage (CCS) a reality and to contribute financially to this purpose.  This must go hand in hand with development of new, renewable energy sources to substitute an increasing amount of fossil fuels in the future.

Half of the fossile fuel emission comes from fossile fuel power plants. The International Energy Agency (IEA) has estimated that Carbon Capture and Storage can contribute with as much as up to 30 per cent of total emission reductions by 2050 as compared to business as usual. Increased energy efficiency, increased use of renewable energy sources and CCS will provide sustainable contributions. CCS may prove a very efficient means to achieve a more environmentally friendly fossil fuels future.  

Presently there is no real, commercial market for CCS solutions. CO2 capture technology has not yet been applied to full scale power plants. CCS technology development is further complicated by our strong drive to find solutions applicable to more than one fossil fuel energy source. The cost of CCS must be brought down for these technologies to be deployed on a global scale.

To facilitate the development of large scale commercial deployment of CCS, the Norwegian Government’s firm conviction is that state support is necessary. Hence, at this stage it is vital that the state is allowed to finance up to 100 percent of the investment and operational cost of running a full-scale CCS facility to prove and verify the technology – without being barred by regulatory constraints. There is a need for European wide support to this thinking to secure that framework conditions are facilitating technology demonstration.

 

Transparency
We believe in non-politicized framework conditions. Transparency and non-discrimination are key tools to realize this goal. Norway supports the EITI (Extractive Industry Transparency Inititiative on transparency in income flows stemming from extractive industries. We now accommodate the international EITI secretariat and we have decided to implement EITI transparency principles – hoping to encourage countries and companies do the same.