Rules block gas power

February 27, 1999, 08:00 CET

Construction of gas-fired power stations in Norway could be blocked by special Norwegian rules on greenhouse gas emissions.

This view is expressed by Knut Barland, vice president for the environment at Statoil, in a letter to environment minister Guro Fjellanger.

His claim refers to restrictions set by the Norwegian Pollution Control Authority (SFT) under a licence it issued recently for two gas-fired stations planned in western Norway by Naturkraft, which is owned by Statoil and two partners.

The permit calls for carbon dioxide emissions from these facilities to be cut by 90 per cent or offset with the equivalent volume in purchased emission quotas.

These constraints mean that gas-fired power stations cannot be built in Norway, Mr Barland emphasises in his letter to the minister.

Technological solutions available for reducing carbon dioxide emissions on the scale demanded by the SFT cannot be implemented on commercial terms.

Nor is it possible to meet the required reduction through quota trading since a global system for such transactions is still at the planning stage.

Statoil is continuing efforts to improve technical solutions which could reduce greenhouse gas emissions from the planned power stations.

At present, the group sees the best opportunity in its project for separating carbon dioxide from flue gases and depositing them somewhere such as in a sub-surface formation.

This solution would nevertheless cost NOK 13 billion for a 1,200 megawatt power station. To make it pay, electricity prices in the Nordic region would have to lie 50 per cent above the forecast level.

The project would not be profitable even if the level of investment required could be substantially reduced.

"Neither the environment nor opportunities for industrial value creation in Norway would benefit if it became impossible to build gas-fired power stations," says Mr Barland.

"The authorities are imposing special national restrictions which bar industrial developments that would help to reduce greenhouse gas emissions in a global context."