Tron Engebrethsen: Norway has approximately 40% of the reservoir capacity in Europe
Tron Engebrethsen is new director at the AGL Board. AGL has developed the 187 MW Shuakhevi Hydro Power plant in Georgia. The company is owned by Norway’s Clean Energy Invest and India’s Tata Power.
Tron Engebrethsen has more than 40 years of experience in the energy sector. He has worked in the Philippines, India, Brazil, Peru, Chile, Turkey and Albania. He was and Senior Vice President in Statkraft and Executive Vice President at SN Power. He has also served 16 years as a Director of Power Generation at Statkraft, responsible for all operations and refurbishment in all regions and development in the Nordics. He is also a Board member of TEJV in Chile.
We had a great opportunity to ask Mr. Engebrethsen about the trends of the energy sector worldwide.
A significant part of the electricity generated in Georgia falls on hydro power plants. however, at this point, the country has approximately 22% of its hydro recourses utilized. What is the Norwegian experience like – to what extent has the country utilized its hydro energy potential, what is the share of electricity generated by hydro facilities and are hydro power plants currently under construction?
Norway started to utilize its hydro potential at the beginning of the last century. Especially in the period between World War 2 and 1990, we built a lot of storage plants. We have approximately 40% of the reservoir capacity in Europe and the country is getting around 92 % of its electricity from hydro. The rest is mainly onshore wind. There are still some hydro facilities under construction, but I expect offshore wind to be the main focus in Norway in the coming years to accommodate the green shift.
How integrated is Norway’s energy system, does it utilize renewable energy potential such as solar or wind together with hydro resources?
Norway has a fully integrated electricity system, and it is also closely integrated with Sweden, Denmark and Finland via interconnections and a common electricity market. We also have cables to Germany, The Netherlands and the UK with a total capacity of several thousand MW.
Georgia imports electricity in order to compensate for the energy deficit. What do you think Georgia should do in order to cut off dependence on imported electricity?
Currently solar is the cheapest source of energy, with on or close to shore wind as a good number two. I would start there, but in parallel, I would exploit hydro resources with reservoir capacity or look at pumped hydro. It is important that the system is in balance at all times.
The modern world actively discusses the issue of utilizing green hydrogen, as believed by field representatives, minimizing carbon emission can be achieved through hydrogen. The Government of Georgia plans to investigate the country’s potential in terms of green hydrogen, what measures does Norway take in this regard?
Green hydrogen or ammonia, which is a more manageable form, is discussed as being the fuel for planes, ships and other heavy transport in the future, and Norwegian Authorities want the country to participate in this new industry. Personally, I am a little bit sceptic because of the low energy efficiency you get in the transition from electricity to hydrogen and further to torque in a motor. I believe science will come up with batteries with ten folds of capacity per kilogram compared to what we have today.
Only the future will tell and we are dependent on international cooperation and geopolitical will.
When Norway introduced the hourly market and capacity market, which Georgia is now planning to introduce?
Norway introduced market-based power trading as long ago as 1991. Instead of planning a gradual transition to market-based solutions, as many European countries have done, Norway organised the changeover so that in principle, the market was open to all customers from the very beginning. Norway was the first country to provide universal market access.
Today, the Nordic countries are closely linked, both by physical interconnectors, and by financial market integration. Nord Pool, based outside of Oslo, is the exchange for physical power trade for the Nordic and Baltic countries. Nord Pool grew into the world’s first international power exchange from 1996 onwards, as Sweden, Denmark and Finland joined. The Nordic market is also integrated, in both physical and financial terms, with power markets in the rest of Europe.
We have two markets for primary reserve. One is closed just prior to the day ahead market, the other one closes after the day ahead market is closed and communicated.
Norway and Sweden have a lot of hydroelectric capacity, the need for a capacity market to offer these services has therefore been postponed for a long time. We have for years had markets for But because of the integration of markets and introduction of huge quantities of intermittent power from wins farms, things have changed. Norway is the first Nordic country where the balancing service providers (BSPs) can offer bids to a new platform for aFRR (automatic frequency restoration reserve) capacity to the transmission system owner (TSO, i.e. Statnett)(It went live on the 29th of November 2021). Next up is Finland and Sweden in the beginning of 2022. The current plan from Energinet side is to connect straight on to the Nordic market.
What do you think about Electricity Market reforms taking place in Georgia? How will it open up opportunities for the Power Generators? Do you think Georgia is ready for this?
Opening up of the electricity market has in all countries been a political, more than a sector driven change. I think Georgia is ready for an hourly based day ahead market. It will help the generators to better optimise their generation and it will help the country to always generate from the cheapest sources available. The fluctuations of the price that is the result of a well-functioning day ahead market is more difficult to get used to by the consumers. For large professional consumers, it is easier since they can enter into financial contracts directly with the generators. For the households it is more difficult and usually there are wholesale companies who sells power at a given rate to the small consumers and takes the necessary risks involved – at a cost of course. After a period, they’ll probably start selling contracts to households at spot price plus a fee.