In less than a century, electricity has gone from having minor importance for Norwegian society to becoming increasingly important. This also means that we will become more vulnerable to interruptions in the electricity supply.
“Electricity is a critical infrastructure in society. It is essential for our well-being and value creation. When looking at the future need for electricity, it might be useful to divide it into household consumption and industrial consumption,” says partner and General Manager Håkon Taule of Thema Consulting Group.
He has followed developments in the power sector for the past 10-15 years and is one of Statnett’s partners. According to Taule, two trends will affect consumption in the next years and decades.
“One main trend is digitalisation. Just look at what is taking place in our homes. In the last decades, there has been a rapid development in the use of white and brown goods. In the future we will most certainly have even more electronic appliances for more uses than we can imagine,” Taule says.
The same trend applies to business, industry, and the public sector. According to Taule, there is hardly an industry that does not depend on electricity to supply goods and services.
What distinguishes us from other OECD countries, is that we have been very lucky with our energy resources. However, we are also very vulnerable to lower oil prices.
The trend continues
The other main trend is climate change.
“It’s all about replacing fossil energy with energy from renewable sources. One of the focus areas in this respect is transport. The number of electric cars used for passenger transport keeps increasing. The government incentives for electric cars have been effective, which makes them highly competitive for consumers, compared to normal cars,” Taule says. Electricity consumption is also likely to increase in other transport areas.
“Electric ferries are already under construction, and these will become more common. Also other, larger vessels will use increasingly more electricity – not necessarily as fuel, but for all the other equipment on board that uses electricity. They charge their batteries when they are docked, so they have enough electricity for the crossing,” Taule says.
Most of the railways in Norway are electric. The remaining sections in Norway, and not least in other countries, will use an increasing amount of electricity. The same will probably be the case for utility vehicles.
“Diggers, bulldozers and cranes can be charged on the construction site overnight and used during the day. Taxis and buses are other examples of transport that will use more electricity. Long-haul lorries on the other hand are more likely to make increasing use of biofuels and other technologies,” says Taule.
Energy peaks require more grid capacity
Another factor is that our consumption pattern is changing. Many households already use induction cookers and timed heating. Such appliances will reduce electricity bills, but result in more frequent energy peaks, which the grid must be able to handle. This means that energy efficiency measures could actually require more output – as well as more grid capacity to handle the peaks. In the future, it will be increasingly more common to be so-called prosumers.
“This means that each household both produces and consumes electricity. We will have electric cars that can draw power from the batteries when prices are high and store energy when prices are low. Furthermore, the use of solar panels and perhaps small wind turbines means we can generate electricity and feed surplus power back into the grid,” Taule says.
In terms of value creation, Norway has the potential to attract power-intensive industry from other countries.
“For other European countries, as well as China and the US, it will be a huge task to reconstruct their energy systems to reduce emissions over time. I hope and believe that Norway, which already has a more efficient power system based on renewable power, will become more competitive, and thus more attractive for power-intensive industry, such as, for instance, data storage,” Taule says.
The petroleum sector will also largely rely on onshore electricity. According to Taule, the Norwegian Shelf uses, and is planning to use, increasingly more power from renewable sources onshore, instead of gas turbines commonly used up till now. Taule estimates that by 2020, Norway will have a major power surplus.
“What distinguishes us from other OECD countries, is that we have been very lucky with our energy resources. However, we are also very vulnerable to lower oil prices,” Taule says.
Text: Sissel Fantoft Photo: Bo Mathisen