Why NHO is wrong

Thor Otto Lohne

Thor Otto Lohne

Chairman of the Board Norsk Havvind

We are questioning the NHO's low level of ambition for how much offshore wind will be developed. The development of offshore wind as a Norwegian export industry must build on wise national decisions. Stable framework conditions and diversity have been central to Norwegian industrial policy for half a century. That must be the foundation when drawing up the roadmap for offshore wind. Sadly, the newly presented strategy from NHO points in a different direction.

We must build on experience

The NHO has presented a comprehensive input to the government. Behind it you find oil interests such as Aker, Equinor and Norsk Olje og Gass who want offshore wind to be taken under the oil tax regime, so that the State and the community take at least 78 percent of the bill. Such a strategy is socio-economically unprofitable, provides low value creation for Norway and does not promote the most important projects.

The development of offshore wind as a Norwegian export industry must build on the experience we have acquired as one of Europe's leading energy nations. We did the right thing when we found oil and it brought industrial growth, value creation and a boom for our prosperity. The wise political decisions were passed on when the Oil Fund (GPFG) was established, and the rule of action was adopted.

When developing offshore wind, we can draw a parallel to the development of Norwegian gas exports. In the eighties, the state adapted to the market changes at the time with a new policy. In the Troll negotiations, Norwegian gas sellers received a breakthrough so that deliveries could take place from a number of fields under the Troll contracts. This made it profitable for fields with smaller amounts of gas to develop and sell the gas under larger contracts. The result was a large number of production units, an integrated gas infrastructure and high value creation. This shows the importance of making the right political decisions.

Similarly, we need a large number of offshore wind farms on the Norwegian continental shelf, connected in a network. Increased transmission capacity will enable the adjustable hydropower to deliver balancing energy on the continent to a greater extent, which is increasingly important and more valuable. Norway can become a stable and central supplier of renewable energy to the European restructuring. Such a political vision will make a contribution to the decarbonization of Europe and significant export revenues to Norway.

We need a good framework

To succeed, we need a large and diverse Norwegian supplier industry. This requires a national strategy that provides frameworks and guides for individual projects and individual decisions, early-stage financial support schemes, a clear goal of long-term development and, last but not least, a regulatory framework that ensures equal treatment, diversity and technology development. A smooth access to new areas can, over time, give the current supplier industry predictability, and thus the incentive to adapt its production to a new domestic market.

What seems to be the guiding principle of the NHO's proposal, however, is a desire to electrify oil installations. If petroleum activities are to have power from shore anyway to ensure operational regularity, it is difficult to understand the societal profitability of connecting offshore wind farms to oil platforms. Offshore wind should only be used if it is cost effective. This means that the allocation of areas must take place in competition with solutions that are also aimed at onshore power systems. The best project should be realized regardless of where the power goes.

Through government subsidy of licensees in the petroleum licences, the NHO's proposals will distort competition and reduce the opportunities for developing solutions aimed at the Norwegian power system at an early stage. And that's exactly where the greatest market potential lies.

Low ambitions from NHO

We also question the NHO’s low level of ambition for how much offshore wind will be developed. The proposal to set a target of building 500 MW of floating offshore wind at Utsira by 2030, suggests there are considerations other than the future power needs that are playing in. The NHO seems to be characterized by internal medical considerations and has negotiated its own ambitions to avoid resistance within the NHO family from the onshore power industry.

Once again, Norway can harvest the riches from its natural resources. This time from the strong wind blowing through the seas and along our coast. If we are able to build on our offshore expertise, we can have a new offshore industrial adventure in Norway. The Norwegian authorities will now create the roadmap for the development of offshore wind. It must be done correctly from the beginning. We believe the NHO's input violates our country’s historically wise national strategies in the energy field.

Thor Otto Lohne
Chairman of the Board Norsk Havvind


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