Green Energy Creates Commerce and Jobs – Look To Norway And Texas For How.
Originally published on Forbes.com on June 25, 2021
Norway is a small country, about 5 million people, that has transformed their transport sector to renewable energies. They lead the world in uptake of electric vehicles (EVs): 60% of new cars sold are EVs.
The country has also framed national policy to support the transition to renewables, firstly by subsidizing costs of EVs by reducing extra costs like VAT and CO2 taxes. They have claimed that a population moves too slowly to make transition changes unless there is significant policy support.
Another vital aspect in transition to renewables is jobs. While the Biden administration is placing a big emphasis on new job creation as the US addresses climate change, it’s worth looking at the experience of other countries like Norway who are doing it.
New commerce and jobs.
Commerce and jobs have followed climate policy in Norway. An example is Norway’s four new battery factories. The strategy is not just to reduce greenhouse gas (GHG) emissions, but also to make money in renewable markets that provide jobs.
According to investment bank UBS, new EVs may represent 40% of all new cars by 2030. As one Norwegian observer said, quite seriously, no-one will produce ICE cars after 2030 because it won’t make economic sense.
As a result, visionaries are planning gigafactories, following the lead of Elon Musk’s new plant in the Nevada desert. A gigafactory is so named because the plant occupies a large aerial space for manufacturing car batteries. The space includes huge machines that mix lithium, cobalt and other metals. These are then dried out in row after row of industrial ovens.
This is a brand-new industry for Europe, and clearly a significant part of the green transition. FREYR Battery are building a gigafactory in northern Norway in a town called Mo i Rana, near a popular ski resort. The company says it will address the rapidly spreading markets for electric vehicles, energy storage, and marine applications. Startup date is 2025.
Based on next-generation semi-solid battery cells, and easy access to Norway’s renewable energy sources, FREYR’s goal is to become the battery cell producer with the lowest whole-of-life carbon footprint anywhere.
Northvolt are building a gigafactory in next-door Sweden which will occupy an area of 70 football stadiums and lead to 10,000 new jobs in the region. Scheduled start up is 2021. The goal of the company is to make enough batteries for 300,000 electric vehicles a year. Investment money is pouring in from banks, and even Volkswagen. The town base of Skelleftea is investing in electric buses and energy-efficient homes to create a livable green city.
These gigafactories emphasize a low carbon footprint for their entire supply chain, beginning with hydro and wind power that is green and cheap in the Nordic countries.
In Northumberland, the UK are planning a gigafactory managed by Britishvolt scheduled for late 2023. As well as offshore wind, the UK plan to import renewable hydro power from Norway to run the factory.
What about Texas?
Texas might be thought comparable to Norway because of its vast wind farms in the north and west regions of the state. The Kansas family motoring across the country on Interstate 40 would encounter 50 miles of windmills on both sides of Amarillo, Texas.
As an oil state’s conservative governor in the years 2000-2015, Rick Perry set up one of the biggest renewable energy systems in the world.
The key was to simplify the electrical transmission system. If it were its own country, Texas at end of 2019 would have been the fifth-largest wind energy producer in the world. It would also have been the sixth-largest oil and gas producer in the world.
But Texas is markedly different from Norway. 20% of its electrical consumption comes from wind. Another 10% comes from nuclear. But the electricity sector accounts for only 13% of end-use consumption, where oil and gas dominate with 86%. So wind energy is a small component of total end-use consumption in Texas (roughly 4%), and much lower than in Norway (67%).
As might have been expected, Texas is dominated by oil and gas consumption. The situation is much the same as the overall situation in the USA.
The windfarm system in Texas took off in 2005 when large segments of transmission lines were constructed from the north and west parts of the state to larger eastern populations. The number of wind turbines have increased exponentially through 2020.
The statistics in Texas provide an example of what other states, or even countries, could aspire to (Table 1).
Table 1. Wind energy data from Texas. Source: Clean Technica
Recent news builds on the success of Texas. New renewable projects totaling 15 GW are in advanced development. The projects will be worth $20-25 billion which is a lot of money. The new green power projects are as big as the next three US states combined.
Comparing with the bullet list above shows that an extra 15 GW of wind power is a 50% increase from Q3 2020, and the monetary increase is of the same order. If the job increases are proportional, this would imply an extra 13,000 jobs.
Norway’s total renewable capacity is 31 GW, so Texas’ new projects are half of that. At this level then, renewable systems in Texas are comparable to those in Norway. But the big disparity is that renewables in Texas will remain a small percentage of in-state energy consumption, compared with 67% in Norway.
Texas will have to address and reduce the demand for oil by proactively shifting into green energy businesses, or by lobbying for policies like carbon-pricing that will constrain GHG emissions. Meanwhile, Norway predicts the peak of global oil production will be 2030. So oil demand won’t crash…. but instead will slowly decline.