Perspectives in Norwegian Energy Politics Future Challenges
Perspectives in Norwegian Energy Politics – Future Challenges
State Secretary Oluf Ulseth Ministry of Petroleum and Energy First Securities´ Nordic E...
Enovas is to achieve 12 TWh in improved energy efficiency and increased use of renewables by 2010
•
The operational goal of 5,5 TWh by the end of 2005 is already achieved
•
A market for green certificates will promote investments in renewable energy further and create opportunities for the Norwegian power sector
Ministry of Petroleum and Energy
Targets and results for Enova
www.mpe.dep.no
Large interest in small scale hydro power •
Hydro power will in the years to come continue to be our main source of energy
•
Continue to facilitate investments in hydro power
•
The Government has given licenses to a number of new hydro power projects, especially small scale hydro power plants
Ministry of Petroleum and Energy
www.mpe.dep.no
Further investments in wind power •
Norway has favorable wind conditions
•
A combination of hydro and wind power gives an efficient use of resources, due to the flexibility of hydro production
•
Potential for further cost reductions
Enegy cost [øre/kWh]
35 30
Expected cost development
25 20
Ministry of Petroleum and Energy
20 04 20 06 20 08 20 10 20 12 20 14
20 02
15
www.mpe.dep.no
A well functioning Nordic market.. •
•
A well functioning Nordic market is the foundation for Norway's energy policy
50 MW
Existing lines Planned lines
120 MW
Dependent on exchange both within the Nordic area and with continental Europe – Nor-Ned cable
Russia 1100/1500 MW 1000 MW
1560 MW
Sweden
Finland
550 MW
Ministry of Petroleum and Energy
Norway
670 MW
Holland
1350/ 1700 MW 600 MW
Denmark
Germany
450 MW
600 MW
800/1200 MW1000 MW
Nordic energy ministers meeting on Greenland: – Vision of a common power market for consumers – Common understanding of need to increase production – Agreement of next steps to improve Nordic market (grid investments, bottleneck pricing)
700 MW
•
2200/2600 MW
Poland
www.mpe.dep.no
.. supported by EU initiatives •
Norwegian green paper on the organization of power companies – Strengthened demands regarding separation of grid operation and production and supply of electricity – The green paper prepares for a functional unbundling of vertically integrated businesses with more than 20 000 grid customers, but also opens for a limit at 10 000
•
Goal: A more effective power market – A more independent grid operation – Reduce the possibility of cross-subsidization
•
The hearing period is three months with a deadline for submissions on October 17th 2005.
Ministry of Petroleum and Energy
www.mpe.dep.no
.. with some structural challenges •
Current regime of different regulation for public and private ownership in the hydropower industry reduces Norwegian power industry competitiveness
•
The current legislation is in the ESA’s opinion in conflict with the EEA agreement
•
Wide public hearing on Commission for Reversion (NOU 2004:26 Hjemfall) and the Ministry has received more than 400 statements
•
The Ministry is now preparing new legislation
Ministry of Petroleum and Energy
www.mpe.dep.no
Increased domestic use of natural gas.. •
Gassco is coordinating a process with industries in Grenland and Trøndelag about pipelines for supplying natural gas.
•
The company is due to submit a report to the Ministry of Petroleum and Energy by January 1st 2006.
•
New signals from the industry foster increased optimism
Ministry of Petroleum and Energy
www.mpe.dep.no
.. with gas-fired power plants •
4 licenses given, corresponding to a yearly production of 16 TWh
•
Investment decision made by Naturkraft for the plant at Kårstø, and new signals from Skogn (IMN)
•
Application received for plants at Tjeldbergodden, Hammerfest and Mongstad – notification for Grenland
•
Gas fired power plants are covered by the Norwegian quota system for CO2 in the period 2005-2007 Kilde: Naturkraft
Source: Naturkraft
Ministry of Petroleum and Energy
www.mpe.dep.no
CO2 capture and storage •
Gassnova, a public facility promoting innovative, sustainable and cost effective gas technologies established January 1st 2005
160 140 120
•
Financed through the returns on NOK 2 billion fund
Mill. NOK
100
Current government
80 60 40
•
Administer NOK 150 millions in 2005 in co-operation with the Norwegian Research Council
20 0 1997
1998
1999
2000
2001
2002
2003
2004
2005
Allocated funds to R&D on CO2 capture and storage
Ministry of Petroleum and Energy
www.mpe.dep.no
Oil and gas Ministry of Petroleum and Energy
www.mpe.dep.no
Strong growth in demand..
Energy development 2002-2030
Biomass 10 % Hydro 2% Nuclear 5%
New renew able 1%
Biom ass 11 % Hydro 2%
Coal 23 %
New renewable 2% Coal 22 %
Nuclear 7%
+ 60% Gas 25 %
Gas 21 %
Oil 34 %
Oil 35 %
2002
2030
Source: IEA
Ministry of Petroleum and Energy
www.mpe.dep.no
…and oil and gas consumption will increase
7000
Gas: 2,3 % p.a.
6000
Oil: 1,6 % p.a.
mtoe
5000 4000
Oil Gas
3000 2000 1000 0 1971
2002
2010
2020
2030
Source: IEA Ministry of Petroleum and Energy
www.mpe.dep.no
… followed by huge investments in energy Energy investments 2003-2030: 16 trillion USD Coal 2% Gas 18 %
Oil 18 %
Electricity 62 %
Source: IEA Ministry of Petroleum and Energy
www.mpe.dep.no
Norway 2005: High activity level 90 80
M rd 2005-NOK
70
Record investment levels of NOK 90 bn
60 50 40 30 20 10 0 2000
40
2001
2002
Besluttede prosjekter og rør/land
2003
2004
2005
Ikke besluttede prosjekter
35 30 25
Planned wells at 1 January
20 15
New optimism, but rig capacity a real constraint
10 5 0 2000
Ministry of Petroleum and Energy
2001
2002
2003
2004
2005
www.mpe.dep.no
An attractive resource base.. Petroleum resources on the Norwegian Continental Shelf 12,9 billion Sm3 o.e.
Produced and sold
26 % 31 %
Reserves
Discoveries and increased recovery Undiscovered resources
New frontier areas: The Barents Sea 25% of world´s remaining petroleum resources are in artic waters (USGS)
Kilde: Statoil
Ministry of Petroleum and Energy
www.mpe.dep.no
…with an extensive 19th Round •
64 blocks announced in the Barents Sea and the Norwegian Sea
•
Large interest from the oil companies through the nominations
•
Gradual and efficient exploration of resource potential
Ministry of Petroleum and Energy
www.mpe.dep.no
.. and a close dialogue Norway/Russia
• • • •
Arctic Energy Agenda 2005 Russian-Norwegian Joint Declaration on Energy White Paper on the Northern Areas The dialogue has a broad perspective and includes: – Energy policies and legislation – Petroleum activities in both countries – Norwegian oil companies' and supply industry's activities in Russia – Petroleum related environmental issues
Ministry of Petroleum and Energy
www.mpe.dep.no
Attracting new players.. • •
An active policy to attract new players Tax regime changed to promote new entrants
Pre-qualified/new Pre-qualified/newcompanies companiessince since2000: 2000: Sumitomo OER Petoro Sumitomo OER Petoro Paladin Talisman Mærsk Paladin Talisman Mærsk Aker Energy * Ruhrgas Anadarko Aker Energy * Ruhrgas Anadarko Dong Kerr McGee CNR Dong Kerr McGee CNR Pelican * Pertra Lasmo* Pelican * Pertra Lasmo* GdF Oranje Nassau Revus GdF Oranje Nassau Revus Lundin Endeavour Centrica Lundin Endeavour Centrica DNO BG Norge Wintershall DNO BG Norge Wintershall Altinex Noble Altinex NobleEnergy Energy * *Companies which do no longer exist as separate entities Companies which do no longer exist as separate entities
Ministry of Petroleum and Energy
Source: NPD 2005
www.mpe.dep.no
Increasing the recovery factor..
100 %
•
Recovery factor oil 2001-2004: – Increased by 0,5 p.p. per year – + 140 mill Sm3
80 %
Left Leftininthe theground ground
60 %
•
•
1 % increase today equals 95 mill Sm3 more oil New target: 5 bn barrels of increased reserves by 2015
40 % 20 %
34 %
46 %
50 %+
Produced Producedresources resources 0% 1991
Ministry of Petroleum and Energy
41 %
1996
2004
Target
www.mpe.dep.no
.. adding reserves… … in and near producing fields
•
Incremental recovery
•
Develop discoveries
•
Extend field life
•
Explore near infrastructure
Ministry of Petroleum and Energy
www.mpe.dep.no
.. building on petroleum R&D Government spending on Petroleum R&D increased by 80 % 2004-2005
Ministry of Petroleum and Energy
OG 21 – National R&D Strategy
www.mpe.dep.no
.. with a clear focus
R & D/Competence Petromaks
Ministry of Petroleum and Energy
5 Main Focus Areas, OG 21
New technology
• Environment • Enhanced Recovery • Deep Water • Small Fields • Natural Gas Value Chain www.mpe.dep.no
.. as a driver for Norwegian industry internationally 120 100
mrd NOK
80 60 40 20 0 1995
1997
1999
2003
2005
2010
The supply industry's international sales and future ambitions (Source: INTSOK/SNF) Total market on the NCS - CAPEX and OPEX (Source: MPE)
Ministry of Petroleum and Energy
www.mpe.dep.no
Unlocking the Norwegian energy potential Perspectives on Norway and Energy • • • •
abundant natural resources strong companies and industrial clusters world leading research institutions energy focused capital markets
• • •
a prudent fiscal policy an active and attractive licensing policy increased energy R&D spending
