Speech held at seminar on wind power

Check against delivery

Ladies and gentlemen.

I have come here to give you three messages today:

• The government has done its part, as a new support scheme for renewable energy now is in place and running.
• Now you have to do your part. You need to find the best projects, and start building!
• The remaining challenges are now related to grid and licenses. We are working on full speed with this.

As you know, Norway now has very ambitious renewable targets in place. The renewable directive lays down a target for Norway’s renewable energy share of 67.5 percent by 2020. This represents an increase of around 9.5 percentage points from 2005. Renewable energy will thus account for more than two-thirds of Norway’s energy consumption in 2020. This is a far higher proportion than in any EU country.

A major instrument for achieving this ambitious target is the new support scheme which started operating this year. On the 1st of January Norway and Sweden established a common market for green certificates with a common goal of developing 26,4 TWh of new electricity production based on renewable sources by the end of 2020.

The new scheme will be in operation until the end of 2035. This gives a stable and predictable framework for the industry. The scheme is an important tool to unlock the large potential for renewable electricity production, be it hydropower, wind power or bioenergy.

In Sweden, the system has existed since 2003 and it has proven successful in promoting renewable electricity production. The renewable electricity production in Sweden has increased with ten percent since 2003. Several energy sources have benefitted from the support: electric heating from biofuels, new hydropower and wind power.

The Norwegian-Swedish system is the first cross-border support scheme for renewable energy that has been established by two countries. Norway and Sweden have for a long time been closely connected through a common electricity market. We are hence obvious partners in this respect.

We have agreed with Sweden to split the bill, and to finance half of the certificate system each – regardless of where the actual projects will be built. Both countries gain, by getting more climate friendly and renewable energy and a more efficient and liquid certificate market. 

The Norwegian Water Resources and Energy Directorate is now receiving applications from electricity producers eligible for certificates. The scheme had only been in operation for 16 days, when the first power plant was approved. This was Kvassteinåga hydropower plant in the Nordland county.

By the end of January, the Directorate received a total of 125 applications (of together 509 GWh), where one application is from a wind power plant. Until now, the Directorate has approved 12 power plants. This is only the beginning.

Let me be frank: The goal is very ambitious. 26,4 TWh equals ten per cent of the total energy production in Norway and Sweden altogether. And it is only 9 years until the end of 2020.

Several actors will have to contribute for the market to work well: investors, entrepreneurs, consultants, providers of technical equipment, financial institutions, grid operators and electricity producers.

I firmly believe that we will reach the goal, but we need to act now.

There is an important challenge which needs to be addressed to reach our goal. The new resources are often located far from the users. This means that a crucial task is to strengthen the grid. The existing grid is not fully in shape to deal with the task.

We will therefore invest heavily in the national grid in the years to come. A better grid is necessary to improve security of supply and to increase renewable energy production. An important decision was taken before Christmas, when we finally approved the building of a new line from Ørskog to Sogndal.

The government is at the moment working on a White Paper on the development of the grid. We need investments both in the central grid, and in regional and local grids. Here the different grid operators have an important responsibility.

To reach our ambitious targets, we also need to focus on the licensing process. This is high on my agenda.

Several measures are already implemented in order to improve and speed up the licensing processes. Some of the more important are that;

• the capacity of licensing in the Norwegian Water Resources and Energy Directorate, counted in man-labour years, is doubled since 2005 and a strengthening of the capacity also in the Ministry is in progress,
• criteria for prioritizing between the wind power projects is introduced and ensures that the better projects are given priority, and
• co-ordination between new production and grid capacity and development is strengthened.

We will also in the years to come continue to work to improve and speed up the licensing processes even further.

Now, to another of today’s key topics: Financing. The certificate system is a market based system. On the one hand, the politicians decide the targets and the level of ambition. On the other, the market decides the price, which projects will be realized and how.

The certificate system will increase profitability in renewable energy projects, but it doesn’t finance the projects up front. The industry needs to bring about the necessary funding.

That ball is in your court! You may have to review your projects. You may have to educate the banks. You may have to invite new partners. However, you may NOT come to me for more money.

With the introduction of the electricity certificate system, we expect that there are many wind power projects that now will start looking for financing. Several of them may perhaps find their partners here in this room? We gratefully welcome and are dependent on professional investors that can contribute with their knowledge and experience to realise wind power projects.

And let me be clear. It does not matter to me whether financing is coming from Norwegian sources or from abroad. What matters to me is that the projects are built.

We therefore need you onboard. You – sitting here in this room –are key actors on the wind power projects. I am confident that you will help us reach our goal.

In Norway, we have the luxury of having an abundance of possible projects. Wind power projects corresponding to more than 4 TWh already have a valid licence. An additional 4,2 TWh have been given licence from The Directorate, but is appealed to the Ministry. The Ministry is giving these projects high priority.

The Directorate have received applications or reports form wind power projects corresponding to another 65 TWh. It is expected that wind power will play an important role in reaching the goal that is set for the green certificate market, but not all projects can be realised in the few years until 2020.

I encourage and trust that Norwea and their members will contribute in the search for the good projects that deserve the right to a licence and green certificates.

When evaluating projects you – as rational actors – should look at future price estimates, and not today’s prices. It is this that will decide whether your investment will be profitable or not.

The electricity certificate scheme is a long-term commitment, running until 2036. The Norwegian parliament has given its unanimous support. This is good. It gives a predictable framework for years ahead, which is exactly what the industry needs to take its investment decisions.

We have discussed support schemes for renewable energy for many years. We have discussed targets – at length. We have discussed burden sharing – at length. We have discussed transition schemes – at length. These discussions are now behind us. The support scheme is in place. It has been a long and cumbersome road towards the establishment of the common certificate market, but now you have a beautifully paved road ahead of you! It allows you to realize your projects! I urge you to pursue these opportunities.

Seminars like this are indeed helpful in this respect. I would therefore like to commend NORWEA for bringing important players together. It is now up to you!