Report: Norway has ‘everything it needs’ to become offshore wind major

The report, The Energy Industry Of Tomorrow On The Norwegian Continental Shelf: Climate Strategy Towards 2030 and 2050, was produced by KonKraft, a collaboration forum for the Norwegian Oil and Gas Association, Federation of Norwegian Industries, Norwegian Shipowners’ Association, Norwegian Confederation of Trade Unions and members the United Federation of Trade Unions and Norwegian Union of Industry and Energy Workers.

The report focuses on the need for the oil and gas industry in Norway to reduce greenhouse gas emissions by 40% by 2030, compared with 2005, and reduce them to ‘near zero’ by 2050, but anticipates that, in addition to cutting emissions, Norway can “create a new and forward-looking energy industry on the Norwegian continental shelf (NCS).”

This new energy industry will include offshore wind, hydrogen and carbon capture and storage, which “will facilitate significant emissions reductions in Norway, Europe and the rest of the world” and “provide the basis for further value creation and jobs in an industry with expertise and technological strengths,” the report said.

“Good wind resources on the NCS, combined with Norway’s strong position in maritime, offshore and land-based industrial sectors, mean that offshore wind power has all it needs to become a large and important new Norwegian industry.”

Among the goals laid out in the report are making growing use of Norway’s existing position in offshore wind power and floating wind in particular.

“Floating wind and conventional bottom-fixed offshore wind will play an important role in tomorrow’s energy system,” said KonKraft. “Europe has taken a lead in developing the technology, with big projects in the UK, Germany and Denmark. Such developments are also being stepped up sharply in Asia and the US.

“According to the IEA’s sustainable development scenario, the global market for offshore wind power will grow by more than 13% per annum. That would result in a combined installed capacity of 560 GW by 2040.

“The International Renewable Energy Agency also believes the market for offshore wind power will increase substantially over the next three decades, to a total installed capacity of 228 GW in 2030 and almost 1,000 GW in 2050,” KonKraft said.

“How much actually gets developed will depend on such factors as costs, technological progress and the competitive position of offshore wind power compared with other energy sources.”

The report highlighted that the European Commission recently presented proposals for a European Green Deal, which aims to make the EU climate-neutral in 2050. An important component is harnessing the full potential of offshore wind power in Europe. Several hundred GW from this source are incorporated in the commission’s scenarios for net zero emissions by 2050.

“Offshore windfarms also have significant potential for the electrification of offshore oil and gas installations, offshore hydrogen production, energy supplies to ships and rigs, and a range of other applications in areas such as aquaculture on the open sea,” said KonKraft, noting that offshore wind power employed more than 1,600 people in Norway in 2017 and created Nkr3.9Bn (US$414M) in value, a figure that is expected to increase in the future.

“Pure oil and gas companies will become broad energy enterprises, while suppliers to the petroleum sector increase their involvement in renewables,” KonKraft said. “Equinor, for example, has ambitions to invest Nkr100Bn (US$11Bn) in renewable energy up to 2030. Kværner’s strategy is to grow in renewable activities alongside its existing involvement in oil and gas, while Aker Solutions has unveiled a plan to derive almost half its turnover from renewable energy and what the company considers ‘low-carbon solutions’ by 2030. Renewables now account for 40% of Aibel’s order backlog, compared with less than 5% a year ago.”

The authors of the report said floating wind power has “big value creation potential in Norway” and cited a report by Menon Economics that assumed a base scenario for this sector with a global capacity of 60-140 GW in 2050.

Its calculations indicate that industry based in Norway could take up to 20% of the world market. Assuming that the latter will reach 140 GW in 2050, this corresponds to value creation of Nkr117Bn (US$12Bn) and significant cumulative employment effect.

“Local production of renewable energy from offshore wind power could contribute to reductions in petroleum industry emissions on the NCS and exciting new industrial development in Norway,” said KonKraft, highlighting Equinor’s commitment to floating wind power in the Tampen area.