Jan Oivind Johansen - The Switch Interview

- Hydropower in Norway is responsible for 99% of electricity generation, so yeah, almost exclusively renewable electricity generation in Norway. - 99% from hydro. - Yes. Norway is excellently set for hydropower actually, through geographical conditions. Because there's a lot of precipitation spread all over the year, and our geographical conditions with high mountains provides high heads which is very efficient even if you don't have much water when you compare to the big rivers in the world. And it's also very well accepted by the population around Norway. When they see all the benefits hydropower produces and also the way it distributes the benefits to local populations. We like to say that hydropower is the backbone of our prosperity, and this happened 60, 70 years before we even discovered oil. In 1905, Norway became independent from Sweden, and we broke off this union, and Norway at that time was really poor, one of the poorest countries in Europe. We didn't have much natural resources or energy resources, we didn't have coal for instance. So there was a big public debate, that was during the first World War, whether Norway should develop hydropower resources, which was domestic, or rely on imported coal. And we found out that we should develop our own natural resources, which was cheap, and it's also part of energy security because this was time of the first World War, so the politicians didn't want to be dependent on imported fuel. So that's also part of the picture. But if you travel around Norway, you see waterfalls everywhere. So it's quite obvious that we will start developing this resource. When it started, we were dependent on foreign investment because Norway, as I mentioned, was very poor. We needed foreign capital. But then gradually, we become richer, then the state took a big part in development through our state owned company. Which is today called Statkraft. I have become the..Europe's largest renewable energy producer, by the way. I've become international. But the state took a big part in development even if it was in remote areas. So I think, yeah, state's refinancing and also by creating a very good legal framework with a very sound licensing system. I think that was also very important for the growth of hydropower in Norway. - So it's all federally run for the most part? - Roughly 90% of the hydropower production is owned by the public. Well, about 35% through our state owed company but more than 50% is owed by the county municipalities or the local municipalities. So we have a strong tradition of public ownership in Norway. And like many other countries, so that means that, let's say local municipalities, they own power companies and they get, of course, all the benefits economically. So hydropower has been very instrumental in developing rural Norway. If you travel around, you see probably the richest municipalities are in regions where you have a lot of hydropower. There's a wide range of benefits from hydropower. Of course, the most important is that we have renewable energy and it's clean, which is becoming more and more important. But there's also a lot of added financial benefits from the local municipalities. It's benefits for the creation of fisheries, better improvement of infrastructure, and hydropower with resources are excellent tool when it comes to controlling floods or droughts, which will maybe become more and more a challenge in the future when you expect change in the climate. And also of course for industry development, if you travel along the coast of Norway, you see big aluminum plants. That started when they got cheap hydropower. So that's also very part of our prosperity, actually. - In terms of just jobs that the hydro industry provides, must be one of the major employers. - It's a big employer in mainland Norway. I don't have the exact figures, but I expect maybe ten, 15 thousand are directly employed. Ideally, if you have many plants and the big hydropower sector is where you're efficient and most is done by remote control so you don't have that many employees. - So great jobs during construction. Once they're construction is done, - Yeah. - not that many required. - No, it's of course, minders and surveillance. But if you look at our biggest hydropower companies, they have surprisingly few employees compared to what you might have expected. - [Interviewer] What were some of the challenges as hydro developed? - Of course, a lot of technical challenges. We have like, 50% of the world's underground stations in Norway, and that's rock excavation and tunneling, was technical challenges which have been solved very good, but in the later years, it's been environmental challenges because the general public has been more aware about environmental impacts, especially the king of fish in Norway is the salmon. - [Interviewer] I see. - So there's a lot of efforts that they have done to take care of the salmon interests also. So you can combine power production with the fisheries. That's, I think, the biggest challenge today that demonstrates sustainability and we do, of course, hydropower process differently today than 50 years ago. Again, a lot of knowledge on how to do it environmentally friendly. - [Interviewer] Talk about the initial capital costs versus the maintenance costs per kilowatt hour for hydro here in Norway. - Well, hydropower is in general, very cheap source of electricity, but you have a very high initial investment cost because of the infrastructure you need as compared to coal or gas. It's cheaper and quicker to build the plants but they maybe have a lifespan of 20, 25 years. Hydropower often has a lifespan of 70, 80 years. With maintenance, we have plants running for 100 years here. But I would say, on average, cost in Norway would be three to four US cents. - [Interviewer] Per kilowatt hour? - Per kilowatt hour, yes. So it's relatively cheap compared to other sources. When it comes to the hydropower sector in Norway, we have installed about 30,000 megawatt of capacity. It spreads all around the country in more than 600 power plants. They're ranging from the biggest, about 12,050 down to around five megawatts of small hydropower. An average of 100, 200 megawatts and a 100 megawatt plant normally supplies about 20,000 households. And the annual generation license run in the range of about ten and 25 terawatt hours a year. In a very wet year like last year, we produced close to 140 terawatt hours. So that's why we have 99% hydropower, it also makes it dependent on the precipitation. A wet year, so you get a lot of electricity. - 140... - Terawatt hours. - Terawatt hours. Why does Norway use so much hydro? - Well, electricity provides about 50% of the total energy mix in Norway. We use electricity for heating. - [Interviewer] Okay. - And that's because it was... We had a big resource, it was cheap, it was clean, so... - Right. - And the infrastructure, so it was kind of encouraged to use electricity for heating. A renewable energy provides more than 60% of the total energy consumption in Norway. And that's compared with the EU 20% targets by 2020, we are quite well above that. - You're in good shape. - We're in good shape, yeah. - So each household consumes on the order of 20,000 kilowatt hours here in Norway? That's about twice the average western household. - One issue that's close to the, or high on the governor's priorities is actually energy efficiency. Say that our cheapest kilowatt hours is kilowatt hours saved. - Absolutely. - There's a quite a lot of potential in that. There'll also be an approach when it comes to upgrading and extension of older installations, let's say. Because we have quite an old stock from 40, 50 years ago and by changing the electrical equipment, doing some refurbishments, et cetera, you can gain quite a lot of more electricity without new environmental impacts. - How do you see that changing as we go towards plug-in hybrid cars or fully electric vehicles? What are some of the things you see that are gonna be challenging for Norway in that future? - Yeah, that could be a good opportunity to use our, what's today a surplus of electricity and it could