Floating offshore wind turbines call for a small but very expensive climate cut

Hywind Tampen is Norway’s first investment in offshore wind power – 140 kilometers off the Norwegian coast.

The facility outside Floro consists of 11 floating wind turbines that will provide 35 percent of the power supply for the five Snorri and Gulfax platforms in the North Sea.

Today, Prime Minister Jonas Gahr Stöhr traveled to Gulvaxe, where Crown Prince Haakon will preside over the official opening.

Hywind Tampen is:

The largest floating offshore wind farm in the world.
Norway’s first offshore wind farm.
The world’s first floating wind farm providing power to oil and gas platforms.

The facility will account for nearly half of the world’s currently available floating offshore wind capacity.

Emission reduction: 4 parts per thousand

The project contributed to reducing the use of gas turbines in Gulfax and Sunuri.

According to Equinor, emissions will be reduced by 200,000 tons of carbon dioxide and 1,000 tons of nitrogen oxides annually. This corresponds to the pollution caused by 100,000 fossil fuel cars.

Put another way:

Hywind Tampen removes 4 per thousand of Norway’s total carbon dioxide emissions of 50 million tons.
Or 7.5 per thousand of the 27 million tons of carbon dioxide emissions that the country has promised the United Nations to reduce by 2030.

Norway’s greenhouse gas emissions and climate targets
It is measured in million tons of carbon dioxide equivalent

Norway’s climate goals23.1 million tons annually

Go to the state of the climate in NRK

What are Norway’s climate goals?

by 2030 Norway has to cut at least 55 percent of its greenhouse gas emissions compared to 1990 levels. The goal is to achieve it in cooperation with the European Union. by 2050 And 90 to 95 percent of Norwegian emissions must be cut.

This means that we must reduce emissions at record speed. In the past ten years we have been able to reduce about 5 million tons, and in the next ten years we will reduce about 25 million tons.

How will Norway achieve its climate goal?

Norway has to reduce emissions in two ways, because the sources of emissions can be divided into two parts:

Quota emissions: In particular, emissions from industry and oil/gas platforms. Emissions are covered by the EU’s quota system: in order to emit greenhouse gases, industry must purchase permits (quotas) in the EU at the price determined by the quota market. Steadily higher prices and lower quotas will force emissions cuts where they are easiest to implement.

Non-quota emissions: These are greenhouse gas emissions from transportation, agriculture, waste, and heating in buildings, among other things. This is called the non-compulsory quota sector because you don’t need quotas to emit greenhouse gases. How Norway can reduce emissions in this sector is described in the specialized report “Climate Therapy 2030”. Politicians decide which of the measures in the report will be implemented.

Norway could also reduce emissions that are not mandatory under quotas by paying for emissions reductions in other European countries. The government says it plans to meet the targets without using this option, but it could be used if it becomes “absolutely necessary”.

For Norway, the emissions in the two sectors are about the same: in 2019, they each released about 25 million tons of greenhouse gases.

What happens if Norway does not reach its climate target?

It could be politically awkward. A possible solution is for Norway to choose to bear the costs of reducing emissions in other countries. Norway Can We will also be subject to sanctions if we do not achieve the goals we agreed with the European Union.

Norway must report regularly on the cuts to the United Nations, in line with the goals set out in the Paris Agreement. There are no penalties here for those who fail to fulfill their obligations.

Small and expensive climate change

Thena Saltvedt, senior sustainable finance analyst at Nordea, says Hywind Tamben is “an important signaling project for Equinor”, but it has “very little impact on total emissions, both for Equinor and for Norway as a whole”.

However, it can become an important technology and energy source that has the potential to compete internationally in the green transition, and a good contribution to reducing carbon dioxide emissions.

The premise is that they were able to both increase and decrease costs.

The first current production started at Hywind Tampen in November 2022.

The entire facility is now fully operational, but there have been accidents at sea:

The COVID-19 pandemic added to costs, as did the Ukraine war, delaying deliveries and quality defects in steel. The weak exchange rate of the krone also made development more expensive.

Last year, the price rose from NOK 5 billion to around NOK 6.5 billion. Now in August, Equinor reported that The cost of Hywind Tampen was NOK 7.4 billion.

If all of the climate reductions that Norway has committed to were to be equally expensive per ton of carbon dioxide, they would cost more than NOK 1,000 billion in total.

– It’s as expensive as it is today. Saltivet believes that continuing with this project is too expensive, whether to produce electricity in competition with other energy sources, or as a measure to reduce carbon dioxide emissions.

It gives 3 percent of the offshore wind aspiration

Hywind Tampen is also small in terms of energy production compared to the political ambitions of Norway’s offshore wind investments.

The total capacity of the project is 88 megawatts. By comparison, the government’s goal is to allocate an area equivalent to 30,000 MW of offshore wind by 2040. Thus Hywind Tambin provides less than 3 per thousand of this area.

Many have previously expressed doubts about whether the ambitions are realistic.

Equinor is pleased to say that Hywind Tampen “demonstrates the potential for renewable energy production on the Norwegian continental shelf.”

Offshore wind resistance

In the offshore wind debate, several objections have been raised:

Electrification of oil and gas platforms will require electricity that can be used for green industrial development on the mainland.
Wind turbine installations at sea could cause damage to the fishing industry, and harm bird migration.
Critics of the persistent oil industry believe that replacing gas turbines with wind power as the power source on platforms is “greenwashing” of the polluting industry.

On the other hand, Saltvedt believes it is important to reduce greenhouse gas emissions from Norwegian oil and gas production, which emits the most carbon dioxide in Norway.

– You say that offshore wind energy is a better alternative than sending hydroelectric power in cables to platforms, because it will deprive the mainland of the energy needed for the new green industry, and contribute to an increase in energy prices.

State-backed investment

Much of the total cost of Hywind Tampen is covered by the Norwegian taxpayer.

The state fund Enova and the NOX Business Norwegian Fund respectively provided NOK 2.3 billion and NOK 566 million to stimulate technology development in the field of offshore wind and emissions reduction.

In addition, the oil tax system means that developers can deduct 78 percent of their own costs on a project.

As a result, Equinor and its partners received approximately NOK 4 billion from the state. The entire development of Hywind Tampen thus cost the oil company “only” around NOK 1.1 billion.