Norway ponders energy dilemma

Reuters News Service
NORWAY: November 8, 1999 
Story by Jeff Coelho

OSLO - Norway, with its many rivers, fjords and waterfalls, is lucky enough to be able to generate almost all its electricity from relatively clean hydropower.

But because the country uses more power than a normal year of snow and rain is capable of creating, it must either cut usage, develop alternative electricity sources or continue to import energy from abroad.

A political battle has blown up over how Norway can find a way to avoid reliance on cheaper electricity in the winter from places like neighbouring Denmark, where coal-based power is still prevalent despite big efforts to clean it up.
                                                            
The minority centrist government, with just 42 seats in the 165-member parliament, believes Norway can maintain its green  image by discouraging usage with higher taxes and subsidising new renewable energy sources, such as bio-energy and wind power.
                                                       
At the same time, a growing number of members of parliament say Norway, one of the world's leading exporters of oil and natural gas, ought to build gas-based power plants which would be more efficient and less costly than renewable energy.
                                                    
"It is a real dilemma," said energy analyst Jan Arild Snoen at Norway's ECON Centre for economic analysis. "You have this goal of self-sufficiency...but the reality is that importing will be the solution in the near future."                          
  
IMBALANCE OF HYDROPOWER
                                                   
Norway has had more snow and rain than usual so far this year which could give production a slight edge over consumption. But the normal trend tells a different story.                               
                                                     
Norway generated almost 117 terawatt hours (TWh) of electricity in 1998, although it used nearly 120 TWh. In 1997, Norway had to import just over four TWh.
                                                   
"The normal situation is that we are under about eight TWh," said Agnar Aas, director general at Norway's Water Resources and Energy Administration (NVE).              
                                                        
Denmark is an exchange partner because it usually has an over capacity of relatively cheaper coal-based power in the winter when the cost of Norway's water is higher because of increased demand.
                                                            
But capacity limitations over transmission lines could cause problems in periods of very cold weather when demand is robust.
                                                           
"If there is a big gap between what we produce and what we consume, especially in cold winters, there can be problems in the technical system," Aas said, noting Norway's theoretical import capacity of about 20 TWh.                          
                                                          
Planned subsea power cables linking Norway to Germany and the Netherlands and Sweden to Poland will help expand its electricity exchange potential, but it will probably take several years before energy flows between them, he said.                   
                                                         
Aas said Norway can get around 15 TWh from new hydropower projects, although local environmental and economic factors would  probably reduce that figure.              
                                                           
The government also aims to eke out an additional three TWh from wind power and four TWh from alternative heating by 2010.
                                                     
But other methods for producing power will still be needed to meet the growing rate of consumption.                             
                                                             
 "If we are going to produce all the power ourselves in Norway in the future, we have to build gas power," Aas said. "But in the short-term it is not necessary for us."   
                                                          
FUMING OVER GAS-BASED POWER

Since taking office in 1997, the three-party minority government has said it would invest five billion crowns ($649 million) in renewable energy over a 10-year period.                                

It said "a drastic transformation towards renewable energy and reductions in consumption" was necessary because of the stricter environmental demands it faced.    

"The development of gas-power plants is not consistent with such a transformation," it said in a white paper on energy presented in April last year.                        
                                                          
The government is not totally opposed to power derived from gas, as long as the method of output does not hinder Norway's international commitment to cut greenhouse gases or compensate carbon-dioxide (CO2) emissions through emission quota trading.

The Norwegian company Naturkraft was granted a licence by Norway's State Pollution Control Authority (SFT) in January to generate electricity from two planned conventional gas-based plants in west Norway.

But Naturkraft has delayed the $470 million project, saying the cost of meeting SFT's strict CO2 and nitrogen oxide (NOx) emission requirements was too high.

It said the only alternative was to cut emissions by swapping them in a quota scheme but no such scheme existed.

Several other Norwegian companies have plans for gas power projects but are waiting for either a surge in power prices seeking approval for output.

The opposition Conservative Party earlier this year proposed relaxing strict environmental laws saying they stifle the growth of gas power and called on other parties to support its fight.

Local media say the far-right Progress Party will back the Conservative-led proposal but the clincher will be a final decision from Labour, the largest group in parliament.

Olav Akselsen, a Labour Party spokesman on energy, said a Labour decision will be made no later than January so parliament could review the Conservative plan by the end of February.

"It will be very hard to find a solution which will gain full support within the (Labour) party," he said, referring to an apparent split in its position.

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