NORWAY: May 27, 2008


OSLO - Norway could become "Europe's battery" by developing huge sea-based wind parks costing up to $44 billion by 2025, Norway's Oil and Energy Minister said on Monday.


Norway's Energy Council, comprising business leaders and officials, said green exports could help the European Union reach a goal of getting 20 percent of its electricity by 2020 from renewable sources such as wind, solar, hydro or wave power.

"Norway could be Europe's battery," Oil and Energy Minister Aaslaug Haga told Reuters after she was handed the report, which will be considered by the centre-left government in coming months.

"The thinking is that Norway is blessed, is lucky, to have big energy resources. There is undoubtedly a large potential for wind power," she said. Norway says it has the longest coastline in Europe, from the North Sea to the Arctic Barents Sea.

The 30-page report, mapping out a big shift for the world's number 5 oil exporter, said: "Norway ought to have access to up to 40 terrawatt hours of renewable energy in 2020-2025, of which about half would come from offshore wind power."

Sufficient wind parks -- totalling 5,000 to 8,000 megawatts installed capacity -- would cost between 100 billion Norwegian and 220 billion Norwegian crowns ($43.89 billion) assuming prices of 20-28 million crowns per installed megawatt.

The energy would be equivalent to up to about eight nuclear power plants. Norway pumps about 2.2 million barrels of oil per day -- $44 billion represents the value of about half a year's output.


WIND, HYDRO

Haga said offshore wind parks -- which would stop on calm days -- could be supplemented by hydro-power reservoirs which can be turned on and off to turn them into a battery storing power. Norway has about half Europe's reservoir capacity.

"We can deliver a product whether the wind is blowing or not," she said. Haga will meet EU Energy Commissioner Andris Piebalgs in Brussels on Thursday, partly to discuss the report.

It said Norway still needed new laws, competitive subsidies and more infrastructure. Norway sometimes has problems supplying even its own electricity needs with its existing hydro-power.

And it said that Denmark, Germany and Britain had done much more to develop wind power, both on land and in shallow waters. Norway's advantage was wide experience from deeper offshore oil and gas installations.

StatoilHydro said last week that it will invest $80 million to build the world's first full-scale floating wind turbine to start up in 2009. Power from such installations is likely to be more costly than on land.

The report said that Norway would have to agree long-term wind supply contracts with EU countries, including access to EU subsidies. But Haga also said: "I don't expect Europe to subsidise Norwegian wind power production."

"It's not a first choice to import power," said Steinar Bysveen, who led the report. He said EU nations such as Germany might need imports because of a lack of space to build wind parks at home and plans to phase out nuclear power.

The Energy Council report said that 40 terrawatt hours of electricity from wind could cut 20 million tonnes of heat-trapping carbon dioxide emissions, blamed for stoking global warming. Norway's 2007 emissions were 55 million tonnes.

Editing by William Hardy


Story by Alister Doyle


REUTERS NEWS SERVICE