The Norwegian government’s decision to fund half if not all of a huge offshore wind power project for state oil company Equinor is stirring up both praise and criticism. Critics believe the highly profitable Equinor should pay for the pioneering project itself, while others are glad the state is supporting wind energy that won’t involve more controversial windmills on land.
Government officials announced late last week that the state agency Enova, set up in 2001 to prod restructuring of energy production and usage in Norway, had agreed to help fund NOK 2.3 billion (USD 250 million) of Equinor’s Hywind Tampen project. It’s billed as the world’s largest floating windmill park and due to be built in the middle of the North Sea.
Equinor (the former Statoil) plans to generate electricity from the project’s 11 turbines that in turn can help power its Snorre and Gullfaks oil platforms. Equinor called the funding assurance “an important step forward in realizing the project,” with a “final investment decision” to be made this autumn.
It’s the biggest single grant ever made by Enova, which is officially owned by Norway’s government ministry in charge of climate and environmental issues. The Norwegian government also still owns and controls 67 percent of Equinor’s stock, with the Oil and Energy Ministry to grant final approval for the project to proceed.
Letting taxpayers assume the risk
Critics note that in addition to securing the NOK 2.9 billion grant, Equinor and its partners in the huge offshore windmill project can also likely write off 90 percent of the rest of the costs of the project over six years, meaning that the Norwegian state and taxpayers are assuming financial responsibility and risks. Equinor had made it clear from the start that it wasn’t keen on risking its own profits and capital on the project, and that it could only proceed if the state put up the money.
“It’s legitimate to raise questions over the sincerity of Equinor’s motivation to go in a greener direction,” editorialized newspaper Dagsavisen on Monday. “The oil and energy giant has not, at any rate, been willing to invest its own money in this project.”
It’s also been pointed out that the huge outlay from Enova will tap much of Enova’s resources for other projects proposed by players who lack Equinor’s financial muscle. “But most problematic is that Enova doesn’t have more money from the government and its energy fund to fuel more projects,” Dagsavisen wrote.
Nils Kristian Nakstad, chief executive of Enova, counters that creation of the world’s largest offshore wind energy project can be “especially important in the transition towards a low-emissions society.” Increased production of renewable energy will form the foundation of the future economy, and can provide a “critical means of cutting both Norwegian and global carbon emissions,” Nakstad says.
The Hywind Tampen project is expected to reduce carbon emissions by 200,000 tons every year. Nakstad thinks it’s most important, however, that it can help commercialize floating wind production and make it more common in the years ahead. He defended the huge outlay to Equinor, saying that Enova’s role is to promote the transition to a low-emission society and be a catalyst for change that the Hywind Tampen project represents. He also stressed that Enova hasn’t “emptied its pot of money,” with more state infusions expected on an annual basis.
Equinor has also received NOK 566 million in support from the Business Sector’s NOx Fund. That support was made in the belief that “realization of the Hywind Tampen project can lead to more development of floating offshore wind technology …. offering new industrial opportunities for Norway,” according to Hywind Tampen’s project director Olav-Bernt Haga.
No final decision yet
It’s ultimately Equinor and its six other partners holding the Snorre and Gullfaks oil field licenses that will decide whether to go ahead with Hywind Tampen. The partners include the state’s own direct holder of oil interests, Petoro, along with OMV (Norge) AS, ExxonMobil Exploration and Production Norway AS, Idemitsu Petroleum Norge, DEA Norge and Vår Energi.
After months of bitter protests and demonstrations against windmill projects on land, the prospect of developing wind energy offshore has been viewed much more positively within the environmental movement, and among Norway’s more climate-friendly political parties. Prime Minister Erna Solberg firmly denied that her own support for Hywind Tampen was aimed at placating the Liberal Party or making her government coalition appear more “green” in the run-up to local elections September 9.
Seabirds can still be at risk when flying around offshore wind turbines, but offshore wind energy that also could be sent ashore can reduce the need for construction of large turbines along the Norwegian coast that scar the landscape, pose a threat to birds and especially eagles, and often noisly tower over communities. Equinor’s wind energy projects can also contribute towards Norwegian innovation and expertise in the field, thereby creating another new source of economic development and jobs while cutting emissions at the same time.
newsinenglish.no/Nina Berglund
