Norway gets moving on climate
Mundus Nordic Green News
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Commentary
It was another frantic week of green news.?
Globally, several new pieces of information came in. The most dramatic was September’s average temperature anomaly. The chart below shows that not only was last month the hottest September ever, but it was a statistical freak. By now, most people seem to shrug off such news, but there’s reason to be concerned about what might follow.
Secondly, the USA avoided a shutdown. But, part of the compromise reached by the dysfunctional US Congress seems that even though President Biden has promised the US would spend $11.4bn annually by 2024 to help developing countries tackle climate change and transition to clean energy, that may not happen. Congressional Republicans have thwarted the president’s efforts to secure the money. A spokesperson for the National Security Council said the US was “steadfastly committed” to “Biden’s pledge to increase US climate finance to help developing countries tackle the urgent threat of climate change, but unfortunately is not in a position to make a pledge to [the GCF’s second replenishment] at the October 5 pledging conference”. With the developed world having promised to deliver $100 billion per annum to the developing world [by 2020], this will look a lot like non-delivery to the 'global south', further souring the mood for COP28 negotiations.
Thirdly, Europe's new Carbon Border Adjustment Mechanism (CBAM) came into force on 1 October and the EU approved its new climate tsar, former Dutch Finance Minister and ex-McKinsey partner, Wopke Hoekstra. Climate NGOs were sceptical, but evidently Hoekstra did enough in his hearings to convince lawmakers of his convictions. He stated, "I will not be a caretaker. It simply wouldn't do justice to the scale, to the magnitude of our challenge.” With Hoekstra coming from the centre-right European People's Party political group, and given his Dutch and McKinsey heritage, one could expect that he will bring a strong market-driven focus to EU solutions. Given that 'scarce economic resources' will be even scarcer [see Rishi Sunak’s U-turns], this can be an important point for credibility and sustainability.
In a final global highlight, Sultan al-Jaber, president-designate of this year’s UN climate summit, said the oil and gas industry must prepare for an inevitable “phase down” of fossil fuels as he warned the sector should not be seen to work against decarbonisation efforts. He said that he was “applying pressure” on the oil and gas sector to join the so-called Global Decarbonisation Alliance. A reasonable bet would be that al-Jaber will not apply sufficient pressure for holdouts to fold.
In Nordic news, announcements continued to gush out of Norway, like an oil-well that had blown its cap. It is apparent that the Government had delayed a number of announcements until local elections were out of the way. PM St?re reminded the nation that it was obliged to deliver a 55% reduction? in GHGs, and it was his ambition that within 15 years, Norway would produce as much new renewable power from offshore wind as the combined hydropower today. The wind industry was unimpressed, describing large parts of the policy as “hopeless”. Further details are available under Policy news.?
Meanwhile, in Sweden, the politics of energy and industry policy ground on. Politically, the fortunes for nuclear energy look brighter, with the Centre party, a centre-right party out of government, saying that it now agreed to more reactors. And the state-owned utility, Vattenfall, said that it saw that nothing was in the way of new nuclear power. But, one suspects that these statements are carefully judged to avoid getting crushed by public opinion. With nuclear energy costing double the installed cost of wind power, it is unlikely that any will be built until the political discussion turns to subsidies. Currently the mantra within the Government is that market forces should still decide. Fortunately for Swedish industry wind power (28%) is already producing more energy than Sweden’s current nuclear reactors (27%). Hydro produces almost all of the remainder.
Nordic Green Talks #1
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Feature Stories
Northvolt plans to build its first gigafactory outside Europe, taking a $5bn bet on the North American market. Co-founder Paolo Cerruti told the?Financial Times?“North America is the next frontier for Northvolt … We picked Canada mainly because of the renewable energy, the raw materials, the attitude of the government we have found here.” Canada’s government and the local administration in Quebec will each offer $1bn towards the building of the factory, which is expected to employ 3,000 people in its first stage. It will also match the substantial support offered by the US on operating costs. A?second stage?to the plant is anticipated, doubling the capacity and taking the total cost to around SEK 100 billion.?
Hystar a Norwegian manufacture of electrolysers, plans to expand its plant in H?vik, near Oslo, to become one of the world's largest factories with a capacity of 4GW per year, up from 50MW currently. The new factory should be fully operational by 2026. With electrolysers in demand as countries seek to replace fossil fuels with hydrogen, the IEA estimates that global electrolyser production capacity needs to reach 170GW per year by 2030, compared to the estimated 14GW in 2022.?
Additionally, Hystar is exploring the development of a large factory in the United States, supported by incentives for hydrogen development in the Inflation Reduction Act. The company specialises in proton exchange membrane electrolysers, well-suited for use with intermittent renewable energy sources like wind and solar power.
Ningbo Shanshan , a Chinese battery materials manufacturer, plans a significant €1.3 billion investment in Finland. The company's interest in Finland primarily stems from its access to cost-effective and clean energy sources, along with better targeting of European customers. The investment project is planned in two phases, with the first phase set to begin within 24 months. The ambitious project carries several risks, including its size, financial aspects, fluctuating raw material prices, and market competition.
Vattenfall remains undecided as to whether it will build more small modular reactors (SMRs) or more conventional nuclear power, but the prospect of new nuclear power at its present-day Ringhals site seems increasingly likely. Vattenfall's CEO, Anna Borg, and the Minister for Finance, Elisabeth Svantesson (M), are visiting the UK to learn from Britain's nuclear power initiative and to emphasise the importance of cooperation among various stakeholders for Sweden's nuclear future. Moreover, they stress the need for a long-term plan to attract investors. Vattenfall is nearing a decision on expanding its Ringhals facility, considering both SMRs and larger-scale reactors. Svantesson (M) highlights the Government’s SEK 400 billion guarantee for nuclear power, whilst noting that regulation needs to be changed to secure Sweden's nuclear future.
Nordic Sound Bites