Norway Energy efficiency report

Objective: 40 TWh of renewable energy and energy savings by 2020

Overview

2011

Primary intensity (EU=100)¹

117

CO 2 intensity (EU=100) CO 2 emissions per c apita (in tCO2 /cap)

66 7.7

Power generation

2011

Efficiency of thermal power plants (in %)

50

Rate of electricity T&D losses (in %) CO 2 emissions per kWh generated (in gCO2/kWh)

7.6 13

Industry Energy intensity (EU=100)

84

1

The European Union, as the best performing region, is used as the benchmark.

0.3% -0.1% 0.5%

---

2000-2011 (%/year)

++ ++

2011

++ Among the best performing countries + Above the EU average1 - Below the EU average1

Latest update: March 2013

2000-2011 (%/year)

++ -

4.0% -2.1% 22.8%

++ + --

2000-2011 (%/year)

+

-1.4%

--Among the worst performing countries

-

1. Overview 1.1. Policies: 40 TWh of renewable energy and energy savings by 2020 The promotion of energy savings is managed by the government-owned enterprise Enova. It administers the fund for the promotion of energy efficiency measures and the use of renewable energy (along with a broader Energy Fund financed through an electricity tax). Enova’s contractual goals involve increasing the contribution of renewables and energy savings by 30 TWh by 2016 and by 40 TWh by 2020 (compared with 2001). A new fund for climate change mitigation, renewable energy and energy conversion will be established on the basis of the Basic Fund for Renewable Energy and Energy Efficiency. The Government is going to inject NOK10bn ($1.7bn) into the fund in 2013 and NOK5bn ($850m) in both 2014 and 2015.

1.2. Energy consumption trends: increasing energy consumption per capita In 2011 energy consumption per capita recovered and exceeded its pre-crisis level with 6.5 toe consumed per capita, which was double the EU average (3.3 toe). Total energy consumption grew by 1.9 percent/year, on average, between 2000 and 2011 with almost no drop in 2009 in spite of the economic downturn. In 2011, industry accounted for 26 percent of energy consumption, down from 35 percent in 2000. The contribution of oil in total energy consumption rose from 2000 to 2005 and has remained stable at around 40 percent ever since. On the contrary, the country’s second main energy source, which is hydropower, has seen its share fall over the 2000 decade, from 47 percent in 2000 to 33 percent in 2011. The share of natural gas reached 20 percent of total consumption in 2011 (16 percent in 2000). The shares of the other energies have stayed relatively stable (5 percent for biomass and 4 percent for coal in 2011).

Figure 1: Energy consumption trends by sector 35 Other

30

Industry

Power generation

Mtoe

25 20 15 10 5

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

0

Source: Enerdata

Electricity plays a major role in meeting Norway’s energy needs, since it accounts for over 45 percent of energy consumption. The country’s per capita consumption is among the highest in the world, at approximately 23,000 kWh. It is over four times higher than the EU average. Between 2000 and 2011, electricity consumption developed at a much slower pace than total energy consumption, at 0.2 percent/year, with a 6.6 percent drop in 2011, mainly due to the residential sector. Industry Norway | Country reports

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saw its electricity consumption decline by 0.4 percent/year, on average, between 2000 and 2011, but continued to be the main electricity-consuming sector with a 45 percent market share in 2011. Figure 2: Electricity consumption trends by sector 140 Industry

120

Others

TWh

100 80 60 40 20 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

0

Source: Enerdata

1.3. Energy efficiency trends: industry drives reduction in energy intensity Primary energy intensity, ie total energy consumption per unit of GDP, measured at purchasing power parity, is 17 percent higher than the EU average. Between 2000 and 2011 it increased by 0.3 percent/year while, on average, EU countries achieved a 1.6 percent/year reduction over the period.

Figure 3: Energy intensity trends 2000-2011 1.5%

%/year

1.0% 0.5% 0.0% Total -0.5% -1.0%

Power generation Industry Other sectors : buildings, transport and agriculture

Source: Enerdata

Norway | Country reports

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2. Power generation: high efficiency thanks to hydro The efficiency of the Norwegian power sector is, on average, close to 97 percent, since hydropower is the dominant mode of electricity generation. The efficiency of thermal power plants has increased since 2006 as a result of new, highly efficient combined cycle power plants. Before 2006 thermal power was used only very rarely for peak generation.

Figure 4: Efficiency of power generation and thermal power plants 110

Figure 5: Thermal electricity capacity, by technology

60

100

50

90

2.0

Steam

Gas turbines

Combined cycles

1.5

30

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

0.0 1996

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

0

1995

30

10 1994

40

0.5

1993

Thermal power plants

20

1992

Total power generation

50

1991

60

1.0

1990

% 70

GW

40

80

Source: Enerdata

The rate of transmission and distribution losses (T&D) stood at 7.6 percent in 2011, ie 17 percent above the EU average.

Figure 6: Electric T&D losses

10 9 8 7

%

6 5 4 3 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

2

Source: Enerdata

Norway | Country reports

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3. Industry 3.1. Policies: funding support for energy-efficient projects Via the “Reduced energy use – industry” program, all companies that have projects with a total energy savings potential of over 0.1 GWh can apply for investment support. Eligible projects include energy-efficient solutions or processes, measures for energy recovery or the use of waste heat and conversion to renewable energy sources. The maximum grant level is 20 percent of the approved project costs. Pulp and paper companies can participate in a five-year program which requires certain energy efficiency obligations to be fulfilled, and which stipulates penalties for the failure to meet those obligations. Those commitments replace an electricity tax: the participating companies are granted full exemption from the tax for the electricity used in the industrial production process during the program period. The program is aimed at companies characterized by high energy consumption and which, therefore, have a high energy saving potential.

3.2. Energy consumption trends: electricity plays a major role in industrial energy consumption Industrial energy consumption decreased by 1.3 percent/year between 2000 and 2011, with an acceleration over the last four years of the period (-3.5 percent/year).

Figure 7: Trends in industrial energy consumption 8 7 6

Mtoe

5 4 3 2 1

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

0

Source: Enerdata

Electricity is the main energy source in industry. Its share has decreased slightly, from 66 percent in 2005 to 62 percent in 2011. The share of oil is stable at around 15 percent while the shares of coal and biomass have declined over the past decade and stood at 11 percent and 7 percent, respectively, in 2011. On the contrary, the share of industrial gas consumption has doubled, growing from 2 percent in 2000 to 4 percent eleven years later. Energy-intensive industries account for half of the country’s overall industrial energy consumption. The chemical industry is the largest energy consumer: it represents 23 percent of the total and its share is increasing (17 percent in 2000). The shares of the other energy-intensive industries are all declining: the share of paper has decreased but remains substantial, with 13 percent of the sector's overall consumption; steel and ferrous metals currently account for just 12 percent, approximately, compared with 19 percent in 2000; and, finally, non-metallic minerals represent 4 percent of industrial energy consumption.

Norway | Country reports

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Figure 8: Energy consumption of industry, by source

Figure 9: Energy consumption of industry, by branch

100%

100%

90%

90%

80%

Biomass

70%

Heat

60%

Electricity

50%

Gas

40%

Coal/Lignite

20%

70%

Other

60%

Paper

50%

Non metallic minerals

40%

Oil

30%

80%

Chemical

30%

Steel

20% 10%

10%

0%

0% 1990

2000

2005

1990

2011

2000

2005

2010

Source: Enerdata

3.3. Energy intensity trends: large structural effect in energy intensity reduction The energy consumption per unit of industrial value added (energy intensity) has decreased by 1.9 percent/year since 2000. This reduction is due to the manufacturing industry sector, and more specifically to the sectors other than the energy-intensives sectors (steel, chemical, cement, paper). The energy consumption per ton of cement produced increased by 3.1 percent/year over the period. The paper industry performed slightly better although its energy consumption per ton produced still rose by 1.3 percent/year.

Figure 10: Trends in the energy intensity of industrial branches 5% 4%

%/year

3% 2% 1% 0% -1%

1990-2010

2000-2010

-2% -3% -4%

Total*

Chemical

Cement

Paper

*Incl uding construction and mining

Source: Enerdata, Odyssee

The energy intensity of manufacturing (excluding mining and construction) decreased by 3.3 percent/year between 2000 and 2010, mainly due to changes in industrial manufacturing activities. That structural effect explains more than 65 percent of the reduction in the total energy intensity of manufacturing between 2000 and 2010. At constant structure, energy intensity decreased by 1.2 percent/year.

Norway | Country reports

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Figure 11: Trends in the energy intensity of manufacturing and structural effect 1991-2010

2000-2010

2% 1%

%/year

0% -1% -2% -3% -4%

Real variation

Change at constant structure

Structural effect

Source: Odyssee

Norway | Country reports

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