Backing gas-fired power

April 12, 1999, 19:00 CEST

Plans for gas-fired power in Norway are regarded by their backers as the best financial and environmental solution for securing new Nordic electricity supplies.

This message was given by Statkraft, Norsk Hydro and Statoil at a joint press conference in Oslo today.

These three companies own Naturkraft, which is pursuing plans to build gas-fired power stations in association with the pipeline landfalls at Kårstø north of Stavanger and Kollsnes near Bergen.

The trio argued that gas-fired power in Norway can outcompete far more polluting coal-based electricity generated in continental Europe.

Another advantage is that emission quotas for greenhouse gases will provide a further gain in the form of lower output of carbon dioxide. The Kyoto protocol opens the way to buying and selling such quotas.

Against that background, the three companies regretted that it was nevertheless commercially indefensible to give a go-ahead for building the planned power stations.

This is because the general terms affecting such facilities in Norway have become much more uncertain over the past year, while the market also presents challenges. Clarifying these conditions is expected to take further time.

Statkraft, Hydro and Statoil gave particular emphasis to uncertainty over the Norwegian and international regulations which would be adopted in order to put the Kyoto protocol into practice.

In their joint statement, the three added that conditions set in the emission permit issued by the Norwegian Pollution Control Authority make it impossible to build gas-fired power stations at an acceptable cost.

In addition, an electricity surplus in the Nordic countries - primarily for coal-fired power - has pulled down prices in recent years.

Naturkraft will continue working on measures which can improve the profitability of gas-fired power generation, and plans to seek new negotiations over buying natural gas from Norwegian offshore fields.

The company also says that requirements in the emission permit must be brought into line with the results which can be achieved using the best available technology.

And it is concerned to see that a Norwegian system for emission trading can be incorporated in a possible Europe-wide solution.