The Need for more Renewable Energy Sources

With record high electricity, oil, gas, coal and CO2 prices, the energy markets is currently experiencing the perfect storm. In addition, Germany, UK, and Sweden are decommissioning base load capacity in record number by retiring nuclear and coal-fired power plants. Such substitution of baseload with intermittent power will increase power price volatility further. This situation sat the backdrop for our 24th annual Power & Renewable Energy Conference on February 3rd 2022. To discuss how to continue to build renewable capacity, decrease price volatility and Norway’s competitive edge, we invited a panel of industry experts, all with their unique take on and position in the renewable space:

• CEO Christian Rynning-Tønnesen in Statkraft - the largest producer of renewable energy in Europe.
• CEO Hilde Tonne from Statnett - the owner and operator of Norway’s power grid.
• VP Arvid Moss in Norsk Hydro - the largest consumer of renewable energy in Europe.
• CEO Siri Kalvig in Nysnø Climate Investments - the Norwegian state's climate investment company.

The panel debate was moderated by Lars Ove Skorpen, Director of Power & Renewable Energy Investment Banking, Pareto Securities. 

Rynning-Tønnesen in Statkraft reminded us that the amount of renewable energy needed globally is about six times what we have today only 28 years from now. Discussing what technologies and investments that are necessary to keep up supply to reach net zero goals by 2050, the panel pointed to increased offshore wind in the North Sea. When rigging the power market for the inclusion of more renewable power, there is no time to waste. “2030 is today, 2050 is tomorrow”, said Hilde Tonne in Statnett.

With the prerequisites in place to make offshore wind power one of the most important future export products, the panel agreed that Norway can be more ambitious. The Norwegian offshore wind areas SN2 (3GW) and UN (1.5GW) are relatively small and very late out in time. Scotwind is 25GW, so why should Norway as an energy nation be less ambitious? The panel agreed that investments on the Norwegian continent shelf will need to happen now, and Norway must think big and long term. 

The panel agreed that we have the knowledge, experience, and infrastructure from the oil & gas sector as a solid foundation, and that we should plan for the new infrastructure to rival and over time perhaps overtake the existing infrastructure in terms of size and importance. Then, Norway could be a supplier of hundreds of TWh of electricity to the continent and UK.

With high volatility in the power markets, why not build out more pump storage to help bring down the volatility, asked moderator and Director of Power & Renewable Energy at Pareto Securities, Lars Ove Skorpen.

The panel agreed that lowering the volatility is essential, but first and foremost must the amount of renewable energy be increased rapidly. Arild Moss from Norsk Hydro was clear:

We do not see pump storage as something big for Norway the coming years. That is not the solution to the balance in Norway. We just need to build more renewable power over the next 5 to 10 years, and we do not have much time. I think that is the main concern to the authorities as well – how do we get concession processes going again, get more onshore wind, more hydropower and so on. We just have to get this going again. If not, Norway will not be the host for green industries.