Clean and reliable energy in Norway

Introduction

Your Excellencies, ladies and gentlemen,

I am pleased to be here today and to address you at the opening of this seminar.

Introduction
I am very pleased to visit Indonesia for my second time and to be here with a highly qualified delegation from the Norwegian renewable industry. Indonesia is endowed with renewable energy sources like hydropower, solar and geothermal energy. Two days ago, I visited the hydropower plant Manipi on the island of Sulawesi. We were very well received and I was impressed by the results of the cooperation between the local districts and Norwegian hydropower developers KF Group and Tinfos.

In my meetings with the Governor and local authorities I got a better understanding of what can be achieved through such a bilateral cooperation.  I hope this example will inspire other Norwegian companies to look to Indonesia and be a model for future cooperation.

Our two countries have had a close and constructive energy dialogue since 1995. I appreciate the good cooperation between the Ministry of Energy and Mineral Resources and my Ministry of Petroleum and Energy. I believe that this mutual exchange of experiences between industry leaders and government officials will be a catalyst in unlocking the vast potential of renewable energy. This seminar on Building tomorrows renewable energy system and infrastructure will further strengthen this dialogue and hopefully lead to more projects being developed.

On a global level, there is huge need for more energy. The reason for this is twofold; population growth and economic development. Hundreds of millions are lifted out of poverty. Universal access to energy is vital. It is a close connection between energy consumption and economic development.

However, there is also a close connection between energy use and carbon emissions.  It is a big challenge to balance the increasing need for energy, economic development and climate considerations.

To meet these challenges, energy efficiency, carbon capture and storage, as well as the further development of renewable energy options are all part of the solution. These are measures that will benefit both the environment and improve the domestic security of supply.

Globally, there is a call for large-scale deployments of renewable energy. Renewable energy provides about 18 % of the world’s electricity supply today. Hydropower alone is responsible for producing 16 per cent of the world’s electricity. Hydropower is the leading source of renewable energy. 

A steady increase in hydropower and the rapid expansion of wind and solar energy has cemented the position of renewable as an indispensable part of the global energy mix. In its new report World Energy Outlook 2012, the International Energy Agency predicts that by 2035 renewables will account for almost one-third of total electricity output.

Norway as an energy nation                                              
Norway is in most ways in a unique situation when it comes to energy. Our exports of oil and gas are substantial, even in a global perspective. Being the world's sixth largest hydropower producer, we are one of very few industrialized nations meeting the domestic electricity demand almost exclusively through this clean and renewable source.

From around 1900, hydropower was the catalyst for bringing Norway from being a poor agrarian country to become a wealthy, industrialised nation. We developed an industry built on cheap and abundant electricity, but we also developed a skilled and competitive supply industry. Based on our topography, we developed certain areas of expertise in hydropower, especially connected to high head and underground plants. Some of our companies were leading suppliers of turbines also world-wide. In addition, the local municipalities and other stakeholders have shared the benefits from the hydropower production.

Another major benefit of supplying our electricity consumption with domestic and clean renewable energy is that this allows us to export almost all of our oil and gas production. Thus, we increase the state’s revenues and secure energy independence. We do not subsidize the use of petroleum products domestically. On the contrary, we tax gasoline in order to increase revenues to the state and secure a level playing field for all types of energy, and renewable energy in particular. These price signals are important also for incentivizing energy efficiency and stimulate other climate-friendly solutions.

We have always had a clear focus on finding efficient, environment friendly solutions in order to secure sustainable projects. In addition, transparency and public involvement has been key factors in securing public acceptance.

Developing a sound legal and administrative framework has been very important factors in attracting long-term and responsible investors.

Recently, Norway has set a target of a 67,5 per cent share of renewable energy in our total energy consumption, up from about 60 per cent today. This reflects an ambitious policy. In comparison, the European Union has set a target to increase to 20 per cent in the same period.

In the years to come, we will therefore see a large increase in renewable energy projects in Norway. A major instrument for achieving our renewable goal is the bilateral electricity certificate scheme, which started operating this year. Through the joint Norwegian-Swedish electricity certificates market, we will have in place 26,4 Terrawatt hours of new production at the end of 2020 in our two countries. This will be an increase in production of 10 per cent from today.

The certificates scheme is technology neutral, and will award certificates to all types of new hydropower production as well as wind and bio. Due to the differences in the natural resources base, I expect to see more hydropower and wind power in Norway, and more wind power and bio energy in Sweden. However, it is for the market to pick the winners, not the Governments.

When it comes to the grid, major investments are needed in Norway, both for upgrading of the existing infrastructure but also for facilitating access for the new power projects. A precondition for more renewable energy is therefore a better and more integrated grid

On the international arena, we see more Norwegian renewable companies entering international markets, both in Europe and in emerging markets in Latin-America and here in Asia. This is mainly within the hydropower sector, but our experience with an open electricity market since 1992 has given us a competitive edge when it comes to power market and grid operations.

The Government and the industry are working together in order to promote Norwegian energy capacities in international markets.  Three Ministries work together with the industry through INTPOW – The Norwegian Renewable Energy Partners. The aim is to further promote the Norwegian competence and industry in international markets.  We believe that an arena where everybody joins forces is a good way to share knowledge with the aim of promoting widespread use of renewable energy.

Conclusions                                                             
There are no easy solutions to the world’s energy challenges. We need to do several things in parallel.

In the renewable energy sector, there are huge opportunities for investments. This will benefit the business community, but also, more importantly all the local stakeholders that will benefit from clean energy.

Bilateral cooperation, like the one between Indonesia and Norway, is important to speed up this process.

Finally, I wish you all the best for an interesting conference and thank you for listening!