Building on Norway’s Energy Goldmine: Policies for Expertise, Export, and Market Efficiencies

Abstract

This chapter deals with the governance of renewable energy in Norway. The Norwegian case is a peculiar one. Norway has been blessed with an abundance of waterfalls, which for the past 100 years have been used to produce cheap and renewable electricity. In addition, Norway has vast oil resources which have been exported to generate national wealth. How does Norway’s odd position of on the one hand being one of the most renewable nations in Europe, while fuelling the world with hydrocarbons affect the governance of ‘new’ renewables? Does the fact that Norway is already one of Europe’s largest producers of renewable energy make a transition toward more renewable policy and production, easier or harder? What cultural, political, and financial factors seem to influence Norway’s strategies in the area of renewable energy production? Historically, energy in Norway has been both cheap and profitable, and Norwegian energy policies have traditionally been geared toward this goal: energy use and production should first and foremost be cost-effective. This situation has been challenging for the implementation of new renewable energy technologies. In the liberalized Norwegian electricity market, the governance of renewable energy has largely been left in the hands of the market participants. The low electricity prices over the past years have not attracted investment in renewables. In an attempt to mitigate this, Norway recently introduced electricity certificates in a joint market with Sweden, thereby creating a new class of incentives for investment in renewable energy generation. Further, to increase Norwegian renewable energy deployment, the Norwegian government has funded research and development projects and a number of large research centers for environmentally friendly technologies. However, there appears to be challenges in transferring the R&D activities to commercial products that could reach the market.