Norway Energy efficiency report
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1 Norway Energy efficiency report Objective: 4 TWh of renewable energy and energy savings by 22 Overview - (%/year) Primary intensity (EU=1)¹ % -- CO 2 intensity (EU=1) % -- CO 2 emissions per capita (in tco2/cap) % - Power generation - (%/year) Efficiency of thermal power plants (in %) % ++ Rate of electricity T&D losses (in %) % + CO 2 emissions per kwh generated (in gco2/kwh) % -- Industry - (%/year) Energy intensity (EU=1) % - ++ Among the best performing countries + Above the EU average 1 - Below the EU average 1 --Among the worst performing countries Latest update: March The European Union, as the best performing region, is used as the benchmark.
2 1. Overview 1.1. Policies: 4 TWh of renewable energy and energy savings by 22 The promotion of energy savings is managed by the government-owned enterprise Enova. It administers the fund for the promotion of energy efficiency measures and the use of renewable energy (along with a broader Energy Fund financed through an electricity tax). Enova s contractual goals involve increasing the contribution of renewables and energy savings by 3 TWh by 216 and by 4 TWh by 22 (compared with ). A new fund for climate change mitigation, renewable energy and energy conversion will be established on the basis of the Basic Fund for Renewable Energy and Energy Efficiency. The Government is going to inject NOK1bn ($1.7bn) into the fund in 213 and NOK5bn ($85m) in both 214 and Energy consumption trends: increasing energy consumption per capita In energy consumption per capita recovered and exceeded its pre-crisis level with 6.5 toe consumed per capita, which was double the EU average (3.3 toe). Total energy consumption grew by 1.9 percent/year, on average, between and with almost no drop in in spite of the economic downturn. In, industry accounted for 26 percent of energy consumption, down from 35 percent in. The contribution of oil in total energy consumption rose from to and has remained stable at around 4 percent ever since. On the contrary, the country s second main energy source, which is hydropower, has seen its share fall over the decade, from 47 percent in to 33 percent in. The share of natural gas reached 2 percent of total consumption in (16 percent in ). The shares of the other energies have stayed relatively stable (5 percent for biomass and 4 percent for coal in ). Figure 1: Energy consumption trends by sector 35 3 Other Industry Power generation 25 Mtoe Electricity plays a major role in meeting Norway s energy needs, since it accounts for over 45 percent of energy consumption. The country s per capita consumption is among the highest in the world, at approximately 23, kwh. It is over four times higher than the EU average. Between and, electricity consumption developed at a much slower pace than total energy consumption, at.2 percent/year, with a 6.6 percent drop in, mainly due to the residential sector. Industry Norway Country reports 2
3 saw its electricity consumption decline by.4 percent/year, on average, between and, but continued to be the main electricity-consuming sector with a 45 percent market share in. Figure 2: Electricity consumption trends by sector Industry Others TWh Energy efficiency trends: industry drives reduction in energy intensity Primary energy intensity, ie total energy consumption per unit of GDP, measured at purchasing power parity, is 17 percent higher than the EU average. Between and it increased by.3 percent/year while, on average, EU countries achieved a 1.6 percent/year reduction over the period. Figure 3: Energy intensity trends 1.5% - 1.% %/year.5%.% -.5% -1.% Total Power generation Industry Other sectors : buildings, transport and agriculture Norway Country reports 3
4 2. Power generation: high efficiency thanks to hydro The efficiency of the Norwegian power sector is, on average, close to 97 percent, since hydropower is the dominant mode of electricity generation. The efficiency of thermal power plants has increased since as a result of new, highly efficient combined cycle power plants. Before thermal power was used only very rarely for peak generation. Figure 4: Efficiency of power generation and thermal power plants Figure 5: Thermal electricity capacity, by technology % Total power generation Thermal power plants GW 2. Steam Gas turbines Combined cycles The rate of transmission and distribution losses (T&D) stood at 7.6 percent in, ie 17 percent above the EU average. Figure 6: Electric T&D losses % Norway Country reports 4
5 3. Industry 3.1. Policies: funding support for energy-efficient projects Via the Reduced energy use industry program, all companies that have projects with a total energy savings potential of over.1 GWh can apply for investment support. Eligible projects include energy-efficient solutions or processes, measures for energy recovery or the use of waste heat and conversion to renewable energy sources. The maximum grant level is 2 percent of the approved project costs. Pulp and paper companies can participate in a five-year program which requires certain energy efficiency obligations to be fulfilled, and which stipulates penalties for the failure to meet those obligations. Those commitments replace an electricity tax: the participating companies are granted full exemption from the tax for the electricity used in the industrial production process during the program period. The program is aimed at companies characterized by high energy consumption and which, therefore, have a high energy saving potential Energy consumption trends: electricity plays a major role in industrial energy consumption Industrial energy consumption decreased by 1.3 percent/year between and, with an acceleration over the last four years of the period (-3.5 percent/year). Figure 7: Trends in industrial energy consumption Mtoe Electricity is the main energy source in industry. Its share has decreased slightly, from 66 percent in to 62 percent in. The share of oil is stable at around 15 percent while the shares of coal and biomass have declined over the past decade and stood at 11 percent and 7 percent, respectively, in. On the contrary, the share of industrial gas consumption has doubled, growing from 2 percent in to 4 percent eleven years later. Energy-intensive industries account for half of the country s overall industrial energy consumption. The chemical industry is the largest energy consumer: it represents 23 percent of the total and its share is increasing (17 percent in ). The shares of the other energy-intensive industries are all declining: the share of paper has decreased but remains substantial, with 13 percent of the sector's overall consumption; steel and ferrous metals currently account for just 12 percent, approximately, compared with 19 percent in ; and, finally, non-metallic minerals represent 4 percent of industrial energy consumption. Norway Country reports 5
6 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Figure 8: Energy consumption of industry, by source Biomass Heat Electricity Gas Oil Coal/Lignite 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Figure 9: Energy consumption of industry, by branch Other Paper Non metallic minerals Chemical Steel 3.3. Energy intensity trends: large structural effect in energy intensity reduction The energy consumption per unit of industrial value added (energy intensity) has decreased by 1.9 percent/year since. This reduction is due to the manufacturing industry sector, and more specifically to the sectors other than the energy-intensives sectors (steel, chemical, cement, paper). The energy consumption per ton of cement produced increased by 3.1 percent/year over the period. The paper industry performed slightly better although its energy consumption per ton produced still rose by 1.3 percent/year. Figure 1: Trends in the energy intensity of industrial branches 5% 4% 3% %/year 2% 1% % -1% -2% -3% -4% - - Total* Chemical Cement Paper *Incl uding construction and mining, Odyssee The energy intensity of manufacturing (excluding mining and construction) decreased by 3.3 percent/year between and, mainly due to changes in industrial manufacturing activities. That structural effect explains more than 65 percent of the reduction in the total energy intensity of manufacturing between and. At constant structure, energy intensity decreased by 1.2 percent/year. Norway Country reports 6
7 Figure 11: Trends in the energy intensity of manufacturing and structural effect 2% - - 1% % %/year -1% -2% -3% -4% Real variation Change at constant structure Structural effect Source: Odyssee Norway Country reports 7
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