Norwegian Cleantech Ccfn 14.Oct2010 Anders Nordeng

NORWEGIAN CLEANTECH IN A GLOBAL MARKET

Photo: SEA

Renewable FutureChambre de Commerce Franco-Norvégienne

Oslo, Oct 14, 2010.Anders Nordeng, Project Manager, Oslo Teknopol

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1. The context of Norwegian cleantech2. The Market – estimates and reported figures

3. Important segments in Norway

4. International cleantech investment trends

5. Key export markets for Norwegian cleantech

THE CONTEXT OF NORWEGIAN CLEANTECH

• Norway’s emissions 2009: 51,5 m tonnes CO2 equiv. Transport 17, oil/gas production 13,5 , industry 13.

• Per capita emissions: USA 17, Norway 11, France 6, China 6. • Climate Bill 2008: Norway to be carbon neutral by 2030. 2/3 of

emission cuts domestically, the rest by buying emission quotas.• Priorities in international climate negotiations:

– Reduce deforestation (substantial aid packages to Brazil and Indonesia)

– Promote carbon capture and storage (CCS)

– Financial mechanism for cleantech investments in developing counties.

• Cleantech is defined as key industry for post-petroleum Norway• Big public business-oriented R&D programmes: Renergi (clean

energy), Climit (CCS),...

Sources: SSB, Netherlands Environmental Assessment Agency

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1. The context of Norwegian cleantech

2. The Market – estimates and reported figures3. Important segments in Norway



THE CLEANTECH MARKET: VARIOUS ESTIMATES

• MandagMorgen/Menon (for Oslo-region): 721 companies, turnover 101 bn NOK, value added 46 bn, employs 12 000 (all figures for 2008).

• Menon (for Norway) : 2015 companies, turnover 167 bn NOK, value added 62 bn, employs 40 000, export 23 bn (all figures for 2008).

• UNEP/Bloomberg (World):collected data show 162 bn $ in new investments (2009).

• ECON POYRY: Green investments acounts for 1 per cent of global GDP. In Norway this would mean a value added of around 30 bn NOK.

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STUDY OF CLEANTECH IN THE OSLO REGION

• Quantitative and qualitative analysis by Mandag Morgen Analysis and Menon Business Economics. Sept 2009 – Jan 2010.

• Made for Oslo Teknopol and OREEC.• Based on reported turnover, employment and added value of

cleantech companies registered in and around Oslo.• Wide definition of cleantech, strict selection of companies to

include (must have cleantech as main activity).• Figures adjusted to reflect degree of involvement in cleantech.• Oslo plus eight surrounding counties.• E-mail survey (questionnaire) to 300 most important companies• In-depth interviews with 10 key experts.

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KEY FINDINGS (2008 figures)

• 700 companies.• 12 000 people.• Turnover of 100 bn NOK (12,5 bn €).• Value added of 46 bn NOK (5% of total in region).• Hydro power is by far the most important segment in

terms of revenue.• Cleantech turnover has grown by 150 per cent from

2000 to 2008.• Solar segment has grown by more than 15 000 per cent.

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Sector Number of companies

Employees Turnover in million € (1 NOK=0,125€)

Part of total %

Growth 2000-2008 %

1 Solar 16 343 1106 8,8 15 565*

2 Wind 22 92 108 0,9 315

3 Stationary bioenergy (not including biofuels) 50 111 56 0,4 485

4 Other renewable (wave, osmotic, etc) 10 4 2 0,1 110

5 Carbon Capture and Storage (CCS) 6 580 249 2,0 289

6 Emission reduction from transport 15 156 64 0,5 79

7 Water treatment 91 738 225 1,8 200

8 Energy efficiency 30 777 571 4,5 98

9 Consultancy/Analysis 38 3133 539 4,3 185

10 Hydro Power 213 1583 6975 55,4 145

11 Waste management 222 4186 2363 18,7 105

Other 8 304 341 2,7 8

Total 721 12 007 12 599 100 152

* REC accounts for nearly the whole of this sector. This producer of silicon and wafers enjoyed a massive growth in the early 2000s

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2. The Market – estimates and reported figures

3. Important segments in Norway4. International cleantech investment trends


Hydro power

• Competitive without subsidies. • 99 % of Norway’s electricity production.• Concessions in early 1900s (French

investors). Little development since 1980.• End-user market liberalised in the 1990s... • ...except for heavy industry which still

benefits from cheap subsidised power.• Common Nordic Electricity Exchange (Nordpool). • Power production remains in the hands of public service companies

(State or municipal).

Export advantage: flexible storage capacity. Quick to turn on and off, power generation, hydro can supplement less reliable sources.

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Solar

• Companies positioned along the value chain, from silicon processing to photovoltaic power plants.

• REC is one of the world’s biggest producers of silicon wafers. Plants in USA, Singapore and Norway.

• Other notable companies: Elkem, Innotech Solar, Norsun, Scatec Solar.

• Made for export, little use domestically. • World class research at University of

Oslo (UiO) and Institute for Energy Technology (IFE).

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Wind

• Norway has a long and windy coastline but local resistance and poor profitability hamper local development and forces the companies to invest abroad.

• No major equipment maker, but promising companies in the offshore segment:

• Operating offshore wind parks: Statkraft/Statoil (major contracts in UK).

• Subcontractors for offshore: Aker Verdal, Seatower, Master-Marine, Odfjell,,…

• General Electric locates offshore wind research institute close to Trondheim.

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Carbon capture and storage (CCS)

• Statoil has 20 years experience in separating CO2 from natural gas, and in storing under seabed in North Sea.

• Focus is now on testing capture from flue gas from gas fired power plants (much lower concentration than in natural gas – thus more complicated).

• Aker Clean Carbon and Alstom (France) are testing two different amin-solutions at Mongstad.

• Government has high hopes in carbon capture as a future export.

• If capture becomes economically viable, Storage could become a more important revenue source for Norway (deposit European CO2 under the North Sea).

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Analysis and Consultancy

• Three main sub-sectors:– Risk analysis, verification, classification. Leading

company: DNV. – Information/analysis on energy markets and derivates

(i.e. emission quotas). Point Carbon, Navita, Viz.– Technical-environmental consultancy. Sweco, Asplan

Viak, Multiconsult, Norconsult.

• Promising segment for Norwegian engineers:– Brain intensive, not labour intensive. – Quick international expansion possible in niche services.

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Energy efficiency

• Heavy industry: much in-house development to optimise processes and reduce the need for input electricity. Hydro, Elkem, Alcoa, ...

• Buildings: various suppliers of isolation and solutions for low emission buildings.

• Dematerialisation /smarter offices: reduce the need for travel, i.e. videoconferences (Tandberg).

Promising segment for foreign suppliers with the right technology, especially in Energy Savings Certificate (“White certificates”).

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Emission reductions from transport

• Transport accounts for 1/3 of Norwegian emissions. • Biofuels subsidies abolished 2009.• Strong fiscal incentives for choosing electric vehicle. • Around 3000 pure electric vehicles circulating in 2010,

high number of hybrids.• Three small scale producers of

electric vehicles.

Promising segment for foreign suppliers with the right technology

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Stationary bio energy and waste

• Veolia has taken a leading position in waste management and reprocessing.

• Two main markets for stationary bio energy: district heating (power utilities) to homes and heat/power made from surplus wood in pulp/paper industry .

• Several big projects over the last few years, but much of the technology is imported.

Promising segment for foreign suppliers with the right technology

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4. International cleantech investment trends 5. Key export markets for Norwegian cleantech

GLOBAL INVESTMENTS: RESILIENCE DESPITE DOWNTURN

• 162 bn $ in 2009, down from 173 bn in 2008. Still above 2007-level.

• Renewable electricity catching up on fossil competitiveness.

• Strong sectors 2009:

– Wind farms China– Offshore wind

North Sea– Power storage– Electric vehicles

UNEP/New Energy Finance 2010

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WHERE IS RENEWABLE ENERGY HEADING?

Negative side (since 2008): • Financial crisis demotes

climate from top priority.• Yet no cap-and-trade in US

and Australia. • No binding agreement in

Copenhagen.• Uncertainty about feed-in in

Spain and other countries. • Flaws revealed in CDM

verification.• 2nd phase of financial

crisis: less liquidity for european cleantech investments?

Positive side:• Even without climate challenge,

scarcity and security of supply lead to more renewables.

• Major investments go ahead: China, US, North Sea,…

• Support mechanisms for renewables spread to new countries, i.e. feed-in in Malaysia.

• Shift towards technology development in Asia, the most dynamic ecomonic region (leading companies in China and India).

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POLICY, NOT ECONOMICS, WILL DRIVE INVESTMENTS

• Most renewable energy is not competitive with fossil sources. The ”market” will continue to depend on the political will to subsdize and support cleantech.

• Democratic challenge: Subsidising will turn politically controversial if at the expense of welfare or competitiveness.

• In Europe the single most important factor is the price of emissions quotas in the EU trading scheme (ETS). A price increase would trigger vast private investments.

• China on the other hand can act upon decisions in the politburo. Will take the lead in investments, and possibly also in technology development.

• Growing perception worldwide of the need to use less fossil fuels and pay more for technology development. We might have reached the point of no return in our (slow) path towards a low carbon society.

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KEY NORWEGIAN EXPORT MARKETS

• Offshore wind: UK (Sheringham Shoal, Doggerbank)

• Solar (silicon PV): Germany, Asian countries. small scale PV in developing countries.

• Hydro: Turkey, Balkans, France, developing countries.

• CCS: Aker Clean Carbon testing large scale capture at Longannet coal power plant in Scotland.

• Emission trading/analysis: several companies with world wide presence,

Competition is fierce in some markets:

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SOME NOTABLE NORWEGIAN CLEANTECH COMPANIES

Name Product/Sector Localisation Ownership

Silicon, wafers and PV panels

HQ Oslo, production Norway, USA and Singapore

Listed on Oslo Stock Exchange (OSE)

Power generation from hydro and wind

HQ Oslo, production and sales in Norway and Europe

100 % government owned

Offshore wind, bio fuels, CCS

HQ Stavanger (west coast), production North Sea,

Listed on OSE, Gov holds around 66 %

Production of small electric vehicles

HQ Oslo, assembly plant in Finland

Mainly American equity investors

Amin-based carbon capture and storage from gas power plants

HQ Oslo, test centres Mongstad (Norway) and Longannet (Scotland)

Subsidiary of Aker Solutions (listed on OSE)

CDM assessment ¾ of world market, R&D renewables

HQ Oslo, Worldwide presence, 22 offices in in China.

Foundation

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CLEANTECH ON THE AGENDA

• Series of seminars Oct 18-23. • Opening symposium - Engines of change: energy, maritime and marine• With Jonas Gahr Støre, Sov Jensen, Alf Bjørset, Idar Kreutzer,…• See more information: www.oiw.no

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OSLO TEKNOPOL – WE KNOW OSLO

Questions?

YOUR LOCAL HOST:

Oslo TeknopolP.O. Box 527 SentrumN-0105 Oslo, Norway Project Manager: Anders NordengTel: +47 22 00 29 90 Tel:+47 90 51 20 71Visit: www.oslo.teknopol.no [email protected]

Photo: Ida Næss Wangen

OSLO IS STRONG IN CLEANTECH COMPETENCES

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Services/ Consulting

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OSLO TEKNOPOL: FOCUS ON FIVE KEY CLUSTERS

Government

Private industry

Higher Education and research

Maritime Clean Tech (Energy and Environment)

ICT

CultureLife science

Innovation Norway

State-owned company for industrial development

Financial tools for:

• Innovation

• Internationalisation

• Promotion

Oslo Teknopol

Governance bodies set up for:

• Management and

coordination

• Marketing and

communication

• Innovation project

development

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Norwegian Cleantech Ccfn 14.Oct2010 Anders Nordeng