The Norwegian solar energy industry continues in its early stages of growth. Despite having several examples of big companies participating in solar projects in countries like South Africa, Rwanda, Honduras, Brazil, and Malaysia, the internal Norwegian solar market continues to represent a small fraction of the total energy production and consumption.
This article is an excerpt from the Norway Report’s Renewable Energy & Electricity report. For more information, click here
Solar energy is becoming one of the fastest-growing renewable energy in the world. Bloomberg NEF’s “New Energy Outlook 2018” report estimates investments for up to USD $11.3 trillion in power generation globally; USD $8.4 trillion of that will go to wind and solar, and USD $1.5 trillion to other zero-carbon technologies such as hydro and nuclear. Statkraft Low Emissions Scenario 2018 forecasts that by 2040, solar power will become the largest source of power generation on a global basis and cover almost 30% of all electricity generation.
The intermittent nature of solar energy requires a high degree of flexible solutions in power supply, such as other types of renewable energies like hydropower with reservoirs, or even peaker gas that can be produced by open-cycle gas turbines and gas reciprocating engines, both more cost-efficient and agile than large scale combined-cycle gas turbines.
In recent years, the innovations made in battery technology, and the reductions in production costs driven by the increasing demand for electric vehicles, have placed them as the most suitable flexibility solution for energy intermittency, especially in solar and wind energy.
Countries with a high share of solar energy production require more short-term flexibility, that is because variations due to intermittency in production from this kind of generation are more predictable within a 24hour period, or even seasonally. In comparison, countries with a high share of wind energy require more long-term flexibility, up to two weeks of storage capacity. Norway’s energy production is 95% hydropower, and its reservoirs act like a battery that provides the required flexibility by renewable energy sources.
Although the Norwegian solar energy industry is mostly dedicated to projects abroad, the internal market is rapidly growing, especially household and commercial building projects due to diminishing costs in solar PV, better ownership and revenue models, and increasing interest from the general public for this type of energy generation technology.
Norwegian solar energy companies are being acknowledged globally as suppliers of solar grade silicon with the lowest CO2 footprint in the market, ICT and digitalization providers, and as one of the countries developing solar energy projects abroad, especially in Africa were growing populations with an increasing demand for electricity face unstable grids, or even a total lack of electricity supply. In addition to Africa, Norwegian solar energy companies are beginning to develop and operate projects under DESCO or PAYGO business models in different emerging markets, particularly in Latin America, Asia-Pacific, and the Middle East.