By Sigrid Carstairs
Norway, once known as Europe’s largest Oil & Gas producer, is making a remarkable transition towards renewable energy. Sure, the country has been a big producer of renewables for many years, mainly thanks to the many hydropower plants across the country. And things are about to get greener.
Over the last few years, there has been a significant movement away from the Oil & Gas sector, and recently some of the largest Scandinavian actors out there, like previous Dong Energy (now Orsted) and Norwegian entity Statoil, rebranding themselves as Equinor. And it’s not really unexpected. The citizens of Scandinavia are highly aware of climate-sensitive issues and dedicated to fighting climate change.
Norway has become a hub for green investors from Europe, and several large actors are investing in the country’s development of onshore wind power. Back in 2012, Norway had a capacity of 700MW and the goal is to increase this to 2GW by the year 2020. And it seems they are well on their way. In 2016, Norwegian Statkraft and TrønderEnergi started the construction of their 1GW project Fosen in central Norway. The wind farm will consist of six wind farms with a total of 278 turbines, all supplied from Danish Vestas, and the foundations will be delivered by the Norwegian subsidiary of Peikko Group. This project will more than double Norway’s current wind capacity, which is not a small feat and definitely encouraging for the future of the country’s wind power market.
Norway has a reliable regional and national grid structure, as well as optimal conditions for wind power, and there are both local developers and investors involved in the mix. Swedish Eolus Vind, as well as Nordisk Vindkraft (a subsidiary of RES), are both on the market, with Eolus developing Øyfjellet in Nordland and Nordisk Vindkraft working on the Buheii project in Vest Agder shire. Moreover, large European developers have realised the potential of Norway, and companies such as Italian based Falck Renewables and Swiss Scanenergy are developing projects in the Northern part of the country.
And Norway’s commitment to the development of their onshore wind sector is strong. According to Norwegian energy minister Tord Lien, they “intend to ensure that the solutions that the energy market promises, allow us to improve the flexibility of the national energy system. Our aim is to strengthen the energy cooperation between the Scandinavian countries to create a solid, modern energy distribution network. The new technologies and the use of smart management systems will help to improve the future security of supplies”. Norway is on track, and are becoming an increasingly sustainable country.
So, what are the challenges in this lucrative market, full of possibility? Well, from what I hear from my network of clients, there is a skills shortage in the Norwegian wind sector, which is proving to be challenging for the continued development of the market. In particular, it’s difficult to find wind turbine technicians, construction managers with experience of groundworks, and experienced HSE Advisors who can ensure that quality and safety is maintained on site. What can be done here?
A lot of foreign developers tend to bring in workers from their main country of operation, and several companies bring over workers from the UK (in particular Site Managers and HSE Advisors). However, there are challenges with that. First of all, Norway is expensive, and if a company sends workers out for a substantial amount of time, they will need to pay for accommodation, otherwise, the normal day rates that apply in the sector will skyrocket. Then there is also the issue of Norwegian tax. See, everyone who works in Norway for more than three days in a row, is liable to pay Norwegian tax. I know, Scandinavia is tricky. But there are valid reasons behind it, and essentially, it’s government regulations so we just have to deal with it.
So, what to do? There has always been a lot of crossover between Sweden and Norway in particular, and I would say if you can’t find good workers in Norway, try Sweden. The languages are very similar, and so is the culture and terrain.
However, if you have the option to hire a local guy, that is always the best way to go about things by far. They will know how things work, they will know the system, and they won’t be crazy shocked at how expensive everything is. But in order to do this, you pretty much need to have a Norwegian subsidiary, or run them through an agency, as Norwegian employment law is strict. Also, make sure you budget properly for the region. Employing someone in Norway is not cheap. There are all sorts of other things to consider when operating in Norway as a foreign entity, and in Scandinavia in general, however, I will cover those in a separate article later on.
Sigrid Carstairs is a Renewable Energy Consultant at Cathcart Associates Energy Ltd.