CHALLENGES FOR SMART STRATEGIES IN RESOURCE BASED
REGIONS: THE CASE OF WIND ENERGY IN NORDLAND
By
Åge Mariussen, Arild Gjertsen, Bjarne Lindeløv og Jarle Løvland
Contents
1.
Summary.......................................................................................................................................... 3
2. SMART SCIENCE BASED EXPLOITATION OF NATURAL RESOURCES THROUGH ENTREPRENEURIAL
DISCOVERIES............................................................................................................................................ 4
3.
2.1
SUSTAINABLE DEVELOPMENT ................................................................................................. 4
2.2
THE DILEMMA OF ENTREPRENEURIAL DISCOVERIES .............................................................. 7
2.3
SMART STRATEGIES ................................................................................................................. 8
THE CHALLENGES OF WIND ENERGY TODAY................................................................................. 10
3.1
Characteristics of wind energy projects in Nordland ............................................................ 11
3.2
Incentives for technological and commercial innovation ..................................................... 12
3.3
Infrastructure capacities and investments ............................................................................ 13
4.
THE SWEDISH MODEL.................................................................................................................... 14
5.
CASES ............................................................................................................................................. 17
5.1
Veiski hydroelectric plant (Sørfold) ....................................................................................... 17
5.2
Ånstadblåheia Wind Power Plant (Sortland) ......................................................................... 18
5.3
Sørfjorden Wind Power Plant (Tysfjord) ............................................................................... 19
5.4
Sleneset Wind Power Plant (Lurøy) ....................................................................................... 20
5.5
Kalvvatnan Wind Power Plant (Bindal).................................................................................. 21
5.6
Lessons learned from the case studies.................................................................................. 23
5.6.1
Application process and national policy context........................................................... 23
5.6.2
Balancing interests of indigenous people and the reindeer industry ........................... 24
5.6.3
Extensive use of dialogue and involvement of interests ............................................... 24
5.6.4
Extensive use of prolonged deadlines ........................................................................... 25
1
5.6.5
Opposition rights and practices..................................................................................... 25
5.6.6
The role of relevant knowledge and information ......................................................... 26
5.6.7
The need for increased cohesion in relevant regional policy areas .............................. 26
5.7
Summary on regional innovation policy and planning .......................................................... 27
6. CHALLENGES FOR SMART REGIONAL WIND STRATEGIES: MORE TECHNOLOGICAL INNOVATION
IS NEEDED .............................................................................................................................................. 28
2
1.
SUMMARY
In Nordland we are working towards a Smart Specialization strategy inspired by President
Obamas green energy cluster initiative. A successful green energy cluster is able to
commercialize green energy technology, and use it profitably for industrial development.
We have the following strengths and weaknesses:
1. We already have a well-developed green energy cluster with regional production of
hydroelectric power used in chemical and metal processing industries. These
industries are extremely productive. This has given us industrial towns with labor
markets and skills necessary to promote and support industrialization of new
technologies.
2. The nature in Nordland has several promising features which have not yet been
successfully commercialized: wind, ocean waves, and sea currents. There are three
main reasons why these resources have not yet been commercialized:
3. Nordland, and Norway, has a very weak electro-technical industry. This means that
we lack a basic precondition for green energy driven industrialization: a partner
region with technological companies and knowledge institutions which can make
up a system of innovation.
4. Nordland is located in Norway, where energy policy, as well as energy oriented
investments is focusing on oil and gas.
5. The transformation of nature into resources takes a lot of regulations and spatial
planning. In this respect we have successful experiences in several other areas, but
the new sectors, such as wind energy planning needs some more work, as
demonstrated by this paper.
3
2.
SMART SCIENCE BASED EXPLOITATION OF NATURAL
RESOURCES THROUGH ENTREPRENEURIAL DISCOVERIES
Specialization in the Nordland economy starts with exploitation of natural resources.
Based on regional export numbers, the following major export clusters are at the core of the S3
program for Nordland:




Salmon/ aquaculture. The region has a strong fishing sector, which has evolved into
production of domesticated salmon and other species based on aquaculture,
Processing industries, where metals, minerals, chemicals, metal products and
machines are produced, with mining and hydroelectric power as core suppliers. This
cluster is now supplemented by a rapidly growing and closely related oil and gas
industry in the region.
Experiences in nature, based on a strong tourist industry with the wonderful
archipelago of Lofoten as the main destination.
Support industries. These three major clusters are supported by a formidable set of
industries which makes it possible to operate in coastal waters, cross deep fjords and
high mountains, and handle the complex logistics and technological challenges
involved in extracting resources and connecting them to the global markets.
Some of these support industries have developed strong export activities themselves, following the
logic of innovation through related varieties and entrepreneurial discoveries. Examples are oil spill
equipment, closely related both to equipment for salmon production, as well as mechanical and
other products well suited for a maritime cluster operating in challenging coastal waters. Today, the
region enjoys a rapid development of an industry which is closely related to the marine and process
industry clusters: oil and gas production. As a result, the Nordland economy is open, raw material
based, and extremely successful, measured in net trade balance. The trade balance between
Nordland and the rest of the world shows a net surplus in favor of Nordland of +30%, excluding oil
and gas. In comparison, the Norwegian balance of trade is +20%, including oil and gas exports.
2.1
SUSTAINABLE DEVELOPMENT
Seen in this context, it is not surprising that sustainable protection and exploitation of nature is a
core concern in regional political life, regional institutions and in general in the debate on regional
development. It is also a frequent topic in national Norwegian policies, where protection of the
unique nature in Nordland for good reasons has a high priority. This means that the process of
innovation, when elements of nature are turned into natural resources which can be exploited
economically is not just about application or development of technology, it is also about protection
of nature, and sustainable development.
By way of introduction, four Norwegian success stories of sustainable development, which are crucial
to the economic success of Nordland, are worth mentioning.
A common denominator of these cases is that management of natural resources is science based.

A history as a green energy region. In the post WW2 years cheap hydroelectric
energy provided the basis of industrialization, based on minerals, metals and
chemicals. This made it possible to increase the regional production of green
hydroelectric energy and at the same time to develop strong processing industries,
consuming this energy. In the 1980s, the institutions supporting this kind of
development were removed. Hydroelectric energy production was deregulated,
4
further projects increasing supply were stopped, and support to processing industry
through the energy price was removed. At the same time, the responsibility for
development of a power grid was allocated to an institution which did not support
the idea of energy export. The power grid is outdated and too weak to sustain
increased energy production. The result was a deregulated institutional regime which
in an efficient way stopped the development of the energy region. The processing
industries adapted to this situation with a successful strategy of increasing
productivity. As a result, the industry remains a major customer to energy. A new
energy region strategy would require a coordination of energy policy and industrial
policy.
 Science based wild fish management. First, there is the Norwegian success in
managing wild fish resources. In the case of Nordland, we are mainly talking about
cod and herring. Compared to the problems in EU waters, where management of
wild fish resources has followed the partnership principle, with consultations with
the fishermen organizations in determining the quantum of fish to be caught, the
Norwegian fish management strategy has been purely based on scientific principles,
where fish quota are based on advice from fish researchers, mapping the evolution of
the ecosystems at sea where commercial species are bred, and monitoring the
development. The result of this science based fish management regime is a marine
ecology with large and sustainable stocks of commercially exploitable fish.
 Oil and gas industry, resource management. Given the fact that oil companies have
a certain reputation for being strong actors, with a long term planning capability, and
financial muscles to promote their own interests and strategies, one might fear that
oil and gas companies might move too fast, go too far into fragile areas, overlook
warnings, and cause damages. This has not happened, for very good reasons. In the
oil and gas sector, Norway has during the last 30 years managed to develop a major
offshore export industry, in coastal areas where environmental hazards, bad weather
and strong winds is a constant danger. The coastal ecology is characterized by huge
and vulnerable fish resources, fragile coastal areas, and huge amounts of marine
mammals, such as seals and whales, sea birds and other species which do not like oil
spills at all. Never the less, the state driven system of environmental assessments and
decision making, combined with controlled and responsible management of the
industry, has resulted in both legitimate agreements on the opening up of new sea
areas for oil and gas search and production, but also a scope of operation with few
major disasters and damages to nature. The planning process has been organized in
a way which encouraged competition on innovations between oil companies, first
and foremost in being able to understand the geology and discover resources, in
terms of technologies of exploitation, as well as in environmental safety. In terms of
planning, the major hero in this story is a state program (called AKUP) of state level
cooperation between the Ministry of Oil and Energy, the Ministry of Environment,
and other ministries. AKUP included
 a state financed research program mapping, documenting and studying
vulnerable ecosystems, areas, and species,
 a detailed risk assessment program, where potential damaging effects of oil spills
on various species (such as oil spills and cod larvae, as well as scenarios for
various accidents leading to oil spills, including sophisticated oil drift models in
the sea were studied carefully and comprehensively
5


a program of socioeconomic analysis of consequences.
Procedures of decision making in terms of spatial planning: what areas should be
opened and under what conditions?
Needless to say, decision making in this framework was heavily centralized and coordinated
from the state level program AKUP committee, with the two core ministries, energy and
environment, in the lead, with supplementary hearings at the regional level. The ultimate
result was decisions on what areas at sea could be opened up for exploration, and under
what conditions, in terms of requirements on oil companies operations. This was a heavyhanded, top-down, long-term process. When you related to powerful economic interests,
that is what you need. Following the decision to open up the area after many years of statedriven environmental studies, oil companies were allowed to apply for licenses to search for
oil and gas. After discoveries, these companies then had to do it all over again, in terms of
environmental analysis, and prepare their own plans for development and production, where
they again carried out new rounds of analysis of the marine environment, using, when
appropriate the material generated through the state level research undertaken in AKUP.
Final decisions, based on the submission of these plans, would then be made in the
government, allowing the company to start, imposing restrictions, asking for renewed
analysis, or deciding where not to go. One such decision is not to open oil exploration close
to Lofoten. Through this process considerable amounts of natural science research was
carried out, resulting in accumulation of authoritative knowledge of endangered ecologies
and species, knowledge of negative impacts of oil spills, a comprehensive analysis of risks
involved, comprehensive scenarios outlining what could happen, in terms of oils spills or
other accidents, and clear guidance on what was to be done to prevent disasters and
accidents.

Domesticated fish. Norwegian aquaculture, salmon production at sea. This is one of
the core clusters of Nordland. Like oil and gas, salmon production is also going on at
sea, although considerably closer to the shore. In that way, salmon production is
competing for space with maritime transportation, fishing, tourism and leisure.
Salmon production also need lots and lots of clean sea water, in order to clean away
the spills from the fish. In other words, it must be located in strong ocean streams. In
addition, salmon may get diseases which are spreading through sea water. Colocation of production facilities accordingly, should be well thought through.
Norwegian salmon production is going on in the “inner coastal waters”, behind the
outer islands. These waters are controlled by the municipalities, through their spatial
planning. Salmon production started slowly in the 1970s. It picked up growth in the
1980s, the expansion came in the 1990s, growth is still continuing, and the industry
has great ambitions to expand further. The slow start proved to be a blessing, as it
was possible to discover and solve challenges and bottlenecks as they appeared, such
as fish disease, lack of cheap and healthy fish food, fish breeding to create a
domesticated salmon with the qualities appreciated by the global market, and so on.
During this period, a formidable national system of innovation was developed, where
central national institutions through generous state funding were motivated to pay
attention to the new industry, and work with it. A core issue in salmon production is
access to lots of clean sea water. This is where spatial planning comes in. Production
in wrong places is bound to lead to pollution, spread of fish diseases, and other nasty
outcomes. Accordingly, well informed spatial planning of areas at sea was a crucial
precondition for industrial development. A state funded project, LENKA, started to
work on the basic challenges of spatial planning of salon production at sea. LENKA
was able to provide a formidable national knowledge base, with suggestions of a
6
classification of sea areas in three categories, according to scientifically based
criteria. This knowledge base was made available to the municipalities who were
responsible for planning. In this way, at the regional level, knowledge of the new
industry was accumulated and used in spatial planning. The long term outcomes of
this experimental approach speaks for itself, as Norwegian salmon today is in a class
of its own as a scientifically based, cheap, healthy, high quality, highly competitive
primary industry, at the core of the economy in Nordland.
2.2
THE DILEMMA OF ENTREPRENEURIAL DISCOVERIES
The Smart Specialization approach builds on the theory of entrepreneurial discoveries developed by
Hausmann and Rodrik1 .
Regions specialize because they have a combination of factors of production which makes certain
types of production competitive. Specialized regions are likely to narrow down on the most
successful and profitable of these combinations of factors. This means that inside a specialized region
there is likely to be a number of unused opportunities, based on existing and potential resources
within the region (knowledge, skills, technologies, substances in nature) which could have been
exploited at low costs, in new combinations. This begs the question of why these opportunities, or
learning what could have been produced, are not explored. This is explained by Hausmann and
Roderik in the following way:
1. First, the combination may involve initial investments, say, in infrastructure,
experimentation, industrialization or other types of investment. In our case, wind
power, one of these initial investments is studies leading to decisions of where wind
power might be harvested in a way which does not destroy nature or is seen as
disruptive to other interests. Other initial investments are development of
technology which makes wind power competitive with the existing energy
production system, which in this case is based on rain, hydroelectric power.
2. In exploitation of nature, these new combinations are not usually open for
privatization of the first inventor. On the contrary, when these initial investments are
made, and the outcome is successful, it can easily be copied by others, because the
factors of production are likely to be open and easily accessible. Barriers to entry are
likely to be low.
3. That means that any private entrepreneur making the initial investment will not be
able to privatize the new knowledge created. Instead, he is probably watched by
copycats who are preparing to do the same, once he is succeeding.
4. Accordingly, the innovator or fist mover will not get his money from the initial
investment back, whereas his followers, who can exploit his investments, might make
a fast profit.
1
there is great social value to discovering that cut flowers, soccer balls, or computer software can be produced
at low cost, because this knowledge can orient the investments of other entrepreneurs. But the
initial entrepreneur who makes the “discovery” can capture only a small part of the social value
that this knowledge generates. (…) , other entrepreneurs can quickly emulate such discoveries. Consequently,
entrepreneurship of this type—learning what can be produced—will typically be undersupplied,
and economic transformation delayed. ECONOMIC DEVELOPMENT AS SELF-DISCOVERY Ricardo Hausmann
Dani Rodrik Working Paper 8952 http://www.nber.org/papers/w8952 NATIONAL BUREAU OF ECONOMIC
RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 May 2002
7
This is why these economies are likely to be characterized by two seemingly contradictory
tendencies: first, by unused opportunities which are well known, but unexploited because nobody
wants to be a fool any pay the initial investment, just to see that his neighbors are making money on
it. At the same time, since some entrepreneurs after all occasionally do make successful new
combinations, there are regional business communities watching what the neighbor is doing, with a
high willingness to invest in copying others fast, in order to reap the early profits flowing from the
new discovery. These investment rallies or bubbles can be triggered because of wrong reasons. What
may appear to be investments in a new opportunity, might initiate an investment rally which creates
premature and wrongly directed over-investments. In this way, political initiatives hinting at or
implying a will from public authorities to develop a new direction may well create a self-destructive
bubble.
There are several examples of these bubbles:

The oil bubble. In the 1970s and 1980s there were extensive private and municipal
over-investments in oil exploration, both in terms of infrastructure, and new firm
formation. These investments failed because central level institutions did not open
up for oil production in Nordland until recently, and because the investors, seen in
retrospect, did not anticipate the problems.

The mussels and cods bubbles. In the late 1990s and early 2000s huge private
investments were made in attempts to transfer the success of salmon production to
other species, such as mussels and cod. The point of departure for these attempts
was based on simplistic transfers of existing technologies and methods from salmon
to other species, overlooking the underlying difficulties.
This means that the market, when left to itself is either creating a situation of under-investments and
missed opportunities, since nobody want to be a fool and make the initial investments, or speculative
and self-destructive bubbles, based on unrealistic expectations of growth.
In other words, there is a need for smart, public intervention.
2.3
SMART STRATEGIES
The public intervention should not aim at diffusing ideas of what might be a successful business
investment, since that is likely to stimulate premature investments feeding bubbles. Instead, the
public intervention should support the first entrepreneur or networks of entrepreneurs who are
taking the lead in exploiting a missed opportunity. It should give sufficient support, which enables the
first mover of movers to test his idea, reject a wrong idea, overcome difficulties, and eventually
succeed in a profitable industrialization and commercialization of a new substance in nature. In other
words, smart interventions should remove the risk from the leading entrepreneurs. For instance, this
can be done by making supplementary investments supporting the innovation. This is what
happened in salmon production. The first entrepreneurs were able to generate an economy which
made it possible for them to survive, expand and continue to experiment. At the same time, the
Norwegian government initiated a wide ranging and comprehensive research program, supporting
the leaders and providing them with what kind of scientifically based instruments and methods they
needed to overcome the problems they encountered. This movement soon became collective, as
several leading entrepreneurs experimented in different directions, and shared their findings and
knowledge. As the industry started to grow, as indicated above, it was also supported by a public
funded program of spatial planning.
8
Once there is a sustainable success story, copycats are likely to come. Since the challenges have
already been overcome, they can enjoy a free ride, to copy the leading entrepreneur who made the
discovery. The late followers, in other words, do not need any subsidies.
This means that public intervention should consist of establishing favorable framework conditions,
enabling entrepreneurial discoveries, supporting problem-solving through public R&D spending, and
in that way and give long-term support to the leading actors, and helping them to overcome their
difficulties. In doing so, public authorities through helping the leading actors to solve their problems,
are creating collective knowledge bases for the new industry.
In terms of new energy production, like wind power, there are two basic challenges:
1. Sustainable development – spatial planning. An important part of the process of
innovation and industrialization is to solve the complex institutional issues of
reconciling environmental concerns with industrial development interests through
spatial planning.
2. Regional energy systems. And then, there is the unsolved issue of how to generate
new regional demand for energy, through the development of energy regions, where
planning of energy production and industrial energy consumption are coordinated2.
Most green energy technologies of today are immature; they mostly rely on public
subsidies, such as feed in tariffs, because they cannot compete with existing energy
production systems. This is likely to change. An important initiative in this respect is
made by president Obama, who is financing green cluster initiatives aiming at
accelerating early clean tech commercialization.
2
Innovation and commercialization of new technologies is fundamental to long-term economic growth and job
creation. Yet there are significant challenges to moving new clean technologies from the lab to the market,
including business planning, market development, regulatory reform, and technology demonstration. The
human and capital resources to address many of these challenges overlap where clean tech startups and
energy markets aggregate– in regional clusters. The U.S. has a significant number of new, emerging innovation
clusters and regional initiatives to accelerate early clean tech commercialization. These regional initiatives build
partnerships or networks with National Labs, universities, states, non-profits, innovation accelerators, and
private companies to help move innovations out of the lab and into the factory. In many cases, these
partnerships have become true hubs of innovation in their respective state or region. ITIF 2014
9
3.
THE CHALLENGES OF WIND ENERGY TODAY
It all started with a central government initiative to develop more wind power inspired by EU
policies. Certain financial measures were put in place to promote wind power, such as a system of
CO2 licenses, shared with Sweden. Several energy companies were encouraged to start planning.
But whereas the Swedish government gave a clear signal to promote wind energy production, the
central Norwegian over-all production target was ambivalent, as illustrated below.
Actual production in 2010 proved to be 0.5 TWH, not 3, as the aspiration of 1999 indicated (see
below). Today there are no targets for domestic production.
This ambivalence reflects the Norwegian challenges, which may be seen as institutional problems:



A weak market demand. First, the region has a surplus of electric energy, due to a
well-developed hydroelectric power system. So new energy could be exported? The
power lines connecting Nordland with the outside market, both in the south, and to
the Nordic market, are old and have a low capacity for export. This means that
increased production is not necessarily welcome, unless there is a regional demand.
In practice, this has led to priorities given to fields which are positioned in locations
where they can supply oil and gas production with hydroelectric power.
No smart grids and no institutions coordinating wind and water. The dominance of
hydroelectric power may be seen as a possible solution to the major problem with
wind power, that it produces a very variable amount of energy. The solution is
coordination of wind and water energy production, to provide what the market
needs. At the same time, hydroelectric production creates a centralized power grid in
the region, with low costs of production. This means that integration of small scale
green energy producers into the grid is not an easy task. But this has to rely upon
institutional coordination mechanisms, which are missing, as well as access to smart
grid technology and knowledge.
Weak electro-technical knowledge base. Taking into account that Norway has a very
well developed hydroelectric industrial production it is surprising that the electrotechnical knowledge base, both in terms of industries and knowledge institutions, are
weak. This technology has a very strong position in the neighboring countries,
Sweden and Finland, the latter with Ostrobothnia as the national center in Finland.
There are two major explanations to this paradox. In Sweden, hydroelectric power
was controlled by the King (the state), who owned the water flowing in the rivers.
Land ownership of farmers stopped at the river bank. In Norway, river water was
owned by the local farmers. The Swedish state used its strong position as buyer of
water power technology to support the development of strong electro-technical
companies in Sweden; primarily ABB. ABB is today a global actor with world-leading
knowledge and innovative capacity, at the core of the S3 strategy in Ostrobothnia. In
Norway, municipalities are owners of many power production facilities.
Municipalities had no interest in contributing to electro-technical companies. They
are only occasionally using this ownership for innovation. Instead, they use the
income generated by hydroelectric power production to their primary mission,
provision of services to the population. This has undermined the Norwegian electrotechnical industry. When Norway found oil and gas, further development of
domestic hydroelectric production was stopped. Norwegian electro-technical
industries tried to respond to this through export of Norwegian electro-technical
10
skills, services, and products, or globalization, but they failed. The national
knowledge base was fragmented, and disappeared.
Taking these things into consideration, it should not come as a big surprise that the Swedes are
better that the Norwegians in developing wind energy.
This means that the actual number of projects which was started up by far outnumbered the
potential capacity which could be produced. Then, there is an additional factor, which is the topic of
this paper: Swedish planning and decision making.
3.1
CHARACTERISTICS OF WIND ENERGY PROJECTS IN NORDLAND
The profitability of wind energy production today is marginal compared to hydroelectric
power production. The cost structure is also different, with relatively high investments and
low operating costs. According to European statistics on cost development, some 75% of the
investment is turbine costs. 60% of the operating costs for wind energy production are
related to operations and maintenance, whereas around 40% are related to indirect costs
like land rental, insurance and overhead costs. This means that costs related to localization
and infrastructure will affect the profitability of wind energy investments.
Wind energy investors
If we look into wind energy projects to be realized in Nordland, we see that most of the
projects are owned by regional energy companies based on production of hydroelectric
energy. For the onshore wind projects the ownership normally is regional, whereas the
hydroelectric production companies have cooperated to develop offshore wind energy
projects through the joint company Nordnorsk Havkraft AS, located in Narvik.
Nine companies have applied for and had wind energy project approval by NVE, the
regulatory agency.
The 8 projects account for an energy production of 2182 GWh. In addition 5 projects are
under development to obtain licenses for building and production, representing a potential
of 3155 GWh for production, as shown in the next table.
Most of the licensing and investment projects are prepared by local and regional energy
production companies based on hydroelectric power. These companies have branched out
specific development departments/units to support the necessary preparations for
commercial development. In addition to the regional companies in Nordland, we find a few
bigger external energy investing companies like Fred Olsen Renewables and NTE among the
entrepreneurs.
If we look into the financial situation for these companies, most of them have experienced a
long and costly period of preparation for obtaining licenses and commercial development.
This situation partly reflects a quite long regional planning process with long delays due to
administrative capacity for licensing (by NVE) and a rather tedious process in balancing
conflicts of interests related to the actual projects.
11
Recently, one of the bigger regional development companies for wind energy production,
Nordkraft Vind, decided to stop their operations after not obtaining license for their project
at Sleneset in Nordland. This also affects 7 other potential development projects that
Nordkraft Wind was engaged in.
Potential wind energy resources in Nordland
According to analysis carried out by the Norwegian regulatory agency, NVE, and national
policies on renewable energy development, Nordland is one of the regions with highest
technical potential for wind energy development in Norway. The highest potential among
Norwegian regions, we find in Finnmark with a technical availability of wind resources to
produce around 450 TWh annually, whereas Nordland comes second with about 250 TWh
production capacities. Based on available wind resources, Northern Norway and Nordland is
expected to be the most important regions in Norway to increase wind energy production
nationally.
Cost development for wind energy production
Internationally the development and scale of wind energy plants have reached a more
mature state, also affecting the relative costs and competitiveness towards other energy
sources. According to EWEA, the most efficient wind energy production plants with optimal
location can produce energy at lower costs than coal based production. From the figure
below we see that the costs of wind energy production in coastal areas are around 60 euros
per MWh, whereas coal and gas based production on average lie around 55
euros/MWh. This represents a production cost level of around NOK 0,50 per KWh.
However, if we look into the regional market structure in Nordland, most of the alternative
power resources coming to market are based on the vast and available hydro electrical
resources here. The production costs are much lower, typically around NOK 0,20 per KWh
for an established facility, and around NOK 0,43 for a new one.
Due to high investment costs, wind energy projects are dependent on subsidies to be
realized in competition with other existing technologies.
Market and demand side characteristics
These cost/price comparisons indicate that wind energy production will compete with wellestablished and low cost hydroelectric and sustainable production at low market prices.
However, the general technology and scale development of the new industry seems to
increase the competitiveness of wind energy production. The use of effective incentives will
be crucial for the further commercial development.
3.2
INCENTIVES FOR TECHNOLOGICAL AND COMMERCIAL INNOVATION
In order to address the challenges of stimulating technological and commercial innovation
and bringing wind energy projects to realization, Norway and Sweden have formed a joint
incentive program with so-called “green certificates” to stimulate investors to develop new
12
technology and commercial projects. The arrangement came into practice in Norway in
2012, whereas it has been established in Sweden since 2002. By this mechanism, the
consumers will contribute to financing technology innovation necessary to increase
renewable energy production based on sustainable energy resources like wind and sun.
The time frame for the present arrangement is 2020, meaning that projects in Norway and
Nordland will have reduced opportunities to have commercial effects of the incentive
schemes from green certificates. Being a combined market in Norway and Sweden, this
might lead to a further development where most of the incentive funding will take place in
Sweden, due to longer time frame (from 2002) and the fact that the regional
implementation of national targets seems better prepared for commercial actors and
potential investors. If we also include the existence of other national incentive schemes
found in other European countries, it seems likely that both technological innovation and
commercial development might be directed to other regions than Nordland and
Norway. This is an issue that should be addressed in the further process of developing
energy based smart strategies in Nordland.
3.3
INFRASTRUCTURE CAPACITIES AND INVESTMENTS
Another major factor affecting commercial development of new wind energy sites is the
availability and limitations in the infrastructure for transfer of energy from production to
users. The basic infrastructure in Northern Norway and Nordland has limited capacity for
transfer of energy, and with high energy losses in transfer. In order to stimulate wind energy
production, the location of production windmills and production sites as mentioned earlier,
are highly dependent on both the availability and capacity of the energy transport
infrastructure. This is a severe limitation in terms of siting of production plants/windmill
parks, and utilizing wind energy resources in a coherent way.
In order to stimulate wind energy project development in Nordland, the issue of improving
the energy transport infrastructure has to be further addressed. However, such necessary
investments to create a distributed energy grid with the capacity to adopt new renewable
energy resources like solar energy, wind energy and bioenergy resources will increase the
costs of commercial projects unless heavy public investments are made. Nordland seems in
a strong position to develop energy based regional and infrastructure development, but it
will require a closer cooperation between national and regional policy development and
future infrastructure investments. Synergies from the development of oil and gas related
activities along the coast of the Norwegian Sea and Barents Sea should be addressed as
electrification of the offshore and subsea operations provide a new necessity to improve the
energy transport infrastructure in Northern Norway, as well as new opportunities to use
wind energy partly for the electrification at the Norwegian continental shelf.
The national and regional development roles could be structured in a way where national
policy and investments are directed to build a more robust and open national energy
infrastructure for distributed production, whereas regions like Nordland focus their role on
energy production and use supporting regional growth and smart specialization.
13
4.
THE SWEDISH MODEL
In preparing the smart specialization strategy of Nordland, we have carefully studied the success
story of a neighboring region in Sweden, Vasterbotten through the LUBAT Interreg project3. Based on
the LUBAT findings, certain observations may be made.
In looking at the Swedish case, we have developed the following archetype or “ideal model” for
efficient wind planning.
1. A clear policy-objective. The Swedish state and regional authorities has a clear policy
to promote wind power production.
2. An authorized public science knowledge base providing clear criteria of decisions.
The Swedish state has supported a large database with all relevant scientific
knowledge relating to wind power planning. Furthermore, the state is giving
authoritative guidelines and criteria for making priorities between nature protection,
recreation and wind-power.
3. A dedicated single institution guiding and supporting the entire process and making
all critical decisions (Lansstyrelsen). The regional institution responsible for wind-mill
planning has a dedicated team of guides supporting and monitoring the process, with
a general objective to increase wind power production. Other institutions are
included through hearings.
4. A comprehensive dialogue process defining the assessment program through three
phases: plan for study program, dialog with affected actors, and final compilation of
plan for studies. This process is carried out by the energy company, in cooperation
with dialogue partners.
5. Dialogues throughout the study phase. Analysis of environmental consequences by
the energy company, including dialogue on the analysis with dialogue partners
6. Dialogue on proposal. Proposal for license of production, including attached analysis
is made public by the regional institution (Lansstyrelsen), dialogue with partners, and
hearing with state level institution (Naturvårdsvarket) .
7. Several meetings with affected parties on comments and objections, dialogue on
objections, coordinated by regional institution (Lansstyrelsen).
8. Decision made by regional institution Lansstyrelsen.
9. Appeal and final decision in a regional environmental court
To sum this up, the Swedish model builds on a closure of the process, where several critical factors
are decided in advance, and everything is coordinated by a single institution, monitoring all the steps.
This can be seen as opposed to an open process where random events coming from the outside may
change the course of action. In organizational theory, this is seen as exploration. Exploration is what
you need when your environment is dynamic and open. Exploration is likely to be going on in a field
where there is no agreement of over-all policy objectives, what kind of criteria are acceptable for
decisions, what kind of knowledge is relevant, and what kind of actors, problems, and solutions are
relevant, and what is going to happen. There is conflicting objectives. It is unclear whether it is
desirable to develop wind power. Wind power may have a variety of negative impacts, which makes
it more or less desirable. Because of this ambivalence, it is not possible to appoint one single
institution as the core actor. Instead, decision making will have to involve several institutions
defending different interests. These conflicting institutions may of course cooperate, or they may go
to war with each other. Similarly, it is unclear what the knowledge base of decisions should be, and
how different conflicting interests should be weighed against each other. As a result of these factors,
3
LUBAT was financed by the Bottnia Atlantica Interreg program
14
the process is likely to be random, as new issues, questions and problems may arise and new analysis
has to be carried out. The combination of these factors may be that the process takes long time. One
possible outcome may be no decision at all, as conflicting institutions postpone final decisions, and
the project is sent drifting into the abyss. This kind of process is likely to be seen as inefficient and
unpredictable. In other words, it is likely to scar away investors, who will start to look for other areas
of investment. After all, for very god reasons, investors ask for predictability.
But is Norwegian wind power planning fragmented? Not necessarily. The successful Norwegian
examples mentioned by way of introduction, from fishing, oil industry and salmon production seems
to indicate that it is possible to solve difficult conflicts in Norway once the scientific knowledge base
is clear and authorized as a basis of decision making, following clear criteria.
Below we will go through 5 case studies from wind power planning in Norway.
Objective
Spatial
planning
Institutional
decision
making
Knowledge
base
for
decisions
Criteria
for
decisions
Learning
process
(hearings,
decisions)
Definition of
problem and
core topics
Appeal
energy system
strategy
“the Swedish model”
Norwegian wind power
Clear over-all support for Support for EU green energy policy
regional wind power
through investments in Norway or
Sweden
Basic state investment
Privatized, funded by the energy project
A core regional decision
maker, others involved
through hearings
National, Shared and
authorized database
Clear, agreed upon
Cumulative
structured
A core state decision maker,
Conflicts energy - environment
Consultancies
Ad hoc local committee,
“a battlefield”
Competition between projects
and Dialogue with objecting actors local
hearing groups
Stable throughout the National priorities may redefine the
process
context
Regional Court
National energy system
OED
In some cases, through connection to
oil and gas
Figuren 1 The Norwegian Planning Prosess
Seen in relation to “the Swedish model” Norwegian wind power planning is characterized by
1. Objectives. The overall objective for the Norwegian coordinating institution is
compliance with EU policies, through wind power development in Norway or
Sweden. In this way, investments in wind power in Nordland will compete with
investments in Sweden. Regional development is not an objective of the coordinating
institution.
2. In terms of spatial planning, there was no “master plan” or over all guidance of
where to develop wind power and where not to do it. Instead, different projects
15
were competing with each other on environmental criteria. The terms of this
competition emerged during the process.
3. No policy mix – no regional or national energy system strategy. In Sweden wind
power is included in the national energy grid through feed in tariffs, compensating
for the inefficiency of wind compared to hydroelectric power. The coordinating
institution in Norway, NVE, is at the national level. In Norway, the national grid is
weakly developed, and an important bottleneck is over production of energy in the
regional market. NVE has no incentive or objective to coordinate wind power
development with other policies at the regional level, for instance through regional
expansion of the energy market through new industrial projects. Instead of creating
new demand, the problem was seen as too many projects in relation to market
demand for energy. Never the less, some of the projects discovered regional markets
through successful connections to oil and gas installations, where gas based energy is
now being replaced with electricity.
4. The development of the knowledge base for decisions was not, as in Sweden in Wind
power and in Norway in petroleum planning regarded as a state level task. Instead,
developers used private consultancies. The knowledge base in Norway is by some
described as “a battlefield” as very different opinions may exist as to what kind of
knowledge is legitimate. Typically, locally based knowledge may be seen as
contradicting knowledge based on consultancies. Norway has good experiences with
state level knowledge base development and regulation in sectors such as oil and gas
and fishing, where science based knowledge generated by the state has a high
legitimacy in decision-making.
5. Criteria for decisions. Final decisions in energy projects are often seen as a result of
political struggle, where the outcome is uncertain and open to the end of the project.
In some cases, criteria for decision making may also be science-based. In Sweden, the
final decision is made by a court. In Norway, the final decision is made by the
Ministry of Oil and Energy. Court level decisions increases predictability and take
away risk.
6. Local hearings and local compensation. Local information on projects and local
hearings are crucial in all planning processes regarding energy. Locals who are
influenced by the project are often compensated in different ways. Hearings may
become negotiations. In the Swedish wind mill planning system, local communities
often get a local development fund (“byapenning”) as compensation.
The main problem, seen as a planning process, is that it increases uncertainty among investors in
wind power. This is reinforcing the exit strategy of some investors from this market. This is a more
detailed description of the Norwegian planning process, where a state level institution, NVE is
coordinating.
16
Steps
FoUs and content
Developer informs NVE
Scope of project
NVE ask for comments from a broad range of involved
partners
- Local information meeting
- Suggestions of topics in the impact study
NVE defines scope of impact study
- Consultation with Ministry of Environment on scope
of impact study
Developer makes impact study, and send it on a
hearing process
- Impact study- proposal of development
Hearing On impact study
Comments and objections.
NVE accommodates consultation meetings
Questions and
alternatives
NVE makes a decision
Information to developer
Appeal
Final decision Ministry of Oil and Energy.
consequences
under
different
Figure 2 Steps and focal areas in the planning process
5.
CASES
In this chapter we present the main findings of the cases studies performed in relation to planning
and developing wind energy projects in Nordland. The cases are chosen to complement and
illustrate important aspects of regional planning and policy learning related to energy based
development. The cases presented are:
-
5.1
Veiski hydroelectric plant (Sørfold)
Ånstadheia Wind Power Plant (Sortland)
Sørfjorden Wind Power Plant (Tysfjord)
Sleneset Wind Power Plant (Lurøy)
Kalvvatnan Wind Power Plant (Bindal)
VEISKI HYDROELECTRIC PLANT (SØRFOLD)
In July 2010, Siso Energi AS applied for a license to establish Veiski hydroelectric power plant.
Originally, Siso Energi AS applied for regulation of the two lakes Veiskivatnet and Kvitvatnet. After a
process of hearings and an inspection of the area in question, Siso Energi AS decided on a different
solution as the main alternative; this was presented as a revised planning application. The power
17
plant is estimated to yield an installed effect of 4,9 MW, and an estimated yearly average production
of 21,1 GWh. The area in question has previously been subject to planning efforts at the national
level (‘Samlet plan’) through white paper no. 53 (1986-87).
In the course of the hearing process in 2011, formal objections to the original application for license
were given by the county Governor of Nordland, the Nordland county assembly, and the regional
authority for reindeer herding in Nordland. The objections were primarily linked to the regulation of
the two lakes in question; Kvitvatnet and Veiskivatnet. Subsequently, the NVE arranged meetings
with the objecting parties, where the grounds for the objections were elaborated. None of the
parties were willing to waive their formal objections, unless changes were made to the application.
The NVE also received hearing statements from parties without formal objection rights, including
Sørfold municipality, Forum for nature and wildlife in Nordland, Fauske and Sørfold hunters and
fishers association, the Sami assembly, the University of Tromsø (University museum) and the Bodø
branch of NOF.
As a consequence of the hearing process, Siso Energi AS applied for a revision of the original plan in
January 2012. This application was again reviewed by the parties who had submitted objections and
statements to the original application. No formal objections to the revised planning application were
received by NVE, although the County governor still advised against the project. Subsequently, NVE
granted a license for the applied project on the 19 of December 2012, with certain conditions
attached concerning the conservation of flora and fauna, as well as the retention of important visual
landscape elements. This decision by the NVE received a formal complaint from the Forum for nature
and wildlife in Nordland, in January 2013. The NVE stands by its decision to grant a license, however,
and the appeal is conveyed to the Ministry of Petroleum and Energy in April 2013 for a final decision.
5.2
ÅNSTADBLÅHEIA WIND POWER PLANT (SORTLAND)
-
Vesterålsenergy Wind started its activity to build a Wind Power plant in 2004 as
the company evaluated different location possibilities in its area.
Ånstadblåheia and Lafjell close to the city of Sortland were chosen and a
preliminary announcement was made to the local government 2006.
The wind power plant of 14 wind mills is estimated to yield an installed effect of
50 MW
According to Plan and building law Vesterålsenergi Wind informed local
authorities of its Wind Power project July 2007
A process towards property owners started and negotiations lasted for more than
2 years
First public hearing proses was announced September 2009 and both local,
regional and national institutions and organisations got involved
Norwegian Water Resources and Energy Directorate (NVE) arranged an
information meeting ultimo September
NVE enforced the planning process because of national interest of supplying oil
activities at Melkøya located in Finnmark County with renewable energy
A program for and documentation on the consequences and knowledge basis of
subject like landscape, cultural monument, recreation and outdoor live, business
development etc. was produced in the period October 2010 to May 2011
18
-
-
-
5.3
An application for licence was send to NVE May 2011
Formal objections to the original application for licence were given by the county
Governor of Nordland. The interest of landscape and outdoor activities for locale
people living in Holmstaddalen was the reason for the objection. The county
Governor proposed a revision of the original plan reducing the amount of wind
mills to 11 instead of 14.
NVE arranged meetings with the objecting party December 2011 and established
and consensus of the first plan. The argument was that a reduced the wind power
project would threaten the economic soundness of the project.
Licence for Ånstadblåheia was obtain May 2012
End of June a local group "Protect Ånstablåheia and Lafjell" protested this
decision. However the protest was rejected. NVE argued that this organisation
hasn't the right to appeal.
SØRFJORDEN WIND POWER PLANT (TYSFJORD)










Nordenergy Wind AS (NWAS) shows interest in Sørfjord as location site for a wind
power plant in 2004 as the company started to produce wind card and measure the
wind force.
Sørfjord is located in the municipality of Tysfjord and is part of Samish cultural
landscape and grasing area for reindeer. Nordenergy Wind started a dialogue with
two Swedish Samish village Unna Tjerusj and Båste in 2007
Sørfjord has no road connection and can only be reached by sea which is an
challenge
Nordenergy Wind AS planned for an installed effect of 80 WM and about 35 wind
mills
Grid connection was possible as the central power line Ofoten-Kobberelv is close to
the location site
Norwegian Water Resources and Energy Directorate (NVE) received the official
announcement July 2009 from NWAS in accordance with the law of plan and building
Process of public hearing of involved interest started September 2009 and NVE
arranged an information meeting for local land regional organisations and
institutions the 28th. September.
Draft of a documentation and consequence programme was preliminary send to
department of environment for comments before the final programme was send to
NWAS October 2010
This program for documentation on the consequences and knowledge had an
extensive list of thematic conflict areas as cultural monument, Sami rights, reindeer
husbandry, landscape, bird etc. was produced in the period October 2010 to October
2011
An application for licence was send from NWAS to NVE 14. October 2011
19





5.4
In the second consultation period to formal objection was announced. One from the
county Governor of Nordland in accordance with unique cave systems in the plan
area and other important landscape formations. The other objection was form the
Swedish Sami interest who argued for the need of a new knowledge fundament of
the coexistence between technical installations as wind mills and movements of
reindeer. The problematized the scientific results of the reports.
The consultations resulted in an agreement with the county Governor of Nordland as
the objections were built in as premises in the licence approval.
NVE arranged a consultation program towards the objecting interest party
December 2011 and established and consensus of the first plan
Licence for Sørfjord Wind Power Plant was given to NWAS 20 December 2012
The Swedish Sami interest has made an appeal the Oil and Industry Department and
this appeal is in process.
SLENESET WIND POWER PLANT (LURØY)
The Sleneset Wind Power Plant was planned to be located in the municipality of Lurøy at southern
Helgeland in Nordland County. The process was initiated in 2003, when the entrepreneur company
Nordnorsk Vindkraft (Northern Norway Wind Power) a preparatory notice to NVE. The project
process was carried out in the following steps:

A notification of the project was sent to NVE during spring 2003.

In the fall of 2003 an information/dialogue meeting was arranged by NVE, where the
municipality, land owners and other interest groups were represented

A draft for an impact assessment program was presented from the entrepreneur
company Nordnorsk Vindkraft.

In 2004 NVE accepted the planning program

The developing company carries out the impact assessment regarding net capacities
of the energy infrastructure, and the national infrastructure agency Statkraft
confirms that the energy production capacity in the project (225 MW) can be
achieved within the existing infrastructure.

Negotiations between the developer and land owners are taking place

The developer carries out the impact assessment program for nature and fauna
consequences. The assessment especially focuses on a special owl species (hubor)
located in the planned siting area. As a consequence of the process the developer
20
reduces the planned area for location of the wind mill plant with one third in order to
minimize the effects on the nesting area of the owl.

In November 2005 the application for license is sent to NVE.

In September 2011 NVE rejects the application on grounds of the large public
investments needed to attach this project to the national energy distribution
infrastructure (60 km). The investments are considered to be a threat to the overall
profitability of the project.

The developer appeals the decision of NVE to the Ministry of oil and energy. The
Ministry (OED) requests new comments regarding the fauna consequences of the
project.

14 mars 2014: Final rejection of the application related to the fauna consequences
for the threatened owl species.

April 2014: Nordnorsk Vindkraft decides to seize their operation to develop wind
energy projects after spending some 40 million NOK on development. The decision
leads to the halt of seven other planned wind energy projects.
5.5
KALVVATNAN WIND POWER PLANT (BINDAL)
Kalvvatnan wind power plant is placed in the municipality of Bindal. NVE has granted Fred. Olsen
Renewables AS a licence to build and run Kalvvatnan with an installed effect of up to 225 MW,
yielding an estimated annual 600 GWh of renewable energy production.
NVE received an announcement regarding the planning of the power plant in July 2006. This
announcement was made subject to a hearing of interested parties in November 2008. The NVE
arranged a meeting with local and regional authorities in Bindal in December 2008. A draft for an
impact assessment programme was presented to the Ministry of the environment, and approved in
July 2009. Subsequently, the NVE received an application for licence from FORAS in October 2011.
The documents were made subject to a hearing in November and December that year. Accordingly,
the NVE arranged a public meeting with local authorities and citizens on the 7th of December,
informing on the approval process. Here, the applicant also gave information on the application and
the impact assessments. An inspection of the area in question was carried out in August 2012 as a
part of the final review of the project, including 25 participants from local authorities, the County
Governor, the regional assembly and the Saami parliament.
During the process of hearings, the NVE received 37 statements. Bindal municipality was generally
positive to the establishment of the power plant, but suggests certain mitigating measures
concerning reindeer herding, Saami interests and nature conservation, as well as suggesting some
alterations to the planned access road. Namsskogan municipality, however, was firmly against
granting a licence, on the grounds that the project is in conflict with reindeer herding, and also
because of a suspected deterioration of landscape values.
21
The County Governor of Nordland stated that developing the project would have considerable impact
on the open mountain landscape, and that the extent of unspoilt nature in the area would be
significantly reduced. The County Governor also points to the negative impact of the project on
wildlife in the area, and conflicts with reindeer herding. However, due to the sparsely populated
area, the adverse effects on landscape values were not regarded as being significant. Nevertheless, a
formal objection is raised by the County Governor concerning the planned access road, due to loss of
landscape values and biological diversity. The County Governor asked for an assessment of a reduced
project before licence was granted. Concurrently, The County Governor of Nord-Trøndelag raised
similar objections to the project. Consultation meetings between the NVE and the County governor
of Nordland were deemed as unnecessary, and the formal objection was retained.
The regional assembly of Nordland recommended that a licence for the establishment of the project
should be granted, citing concurrence with regional and national aims for the production of
renewable energy. Some adjustments to the proposed project were suggested.
The Norwegian Environment Agency pointed to the lack of alternative solutions in the application for
licence, and that the impact assessments were not adequate in their expositions on wildlife (birds).
The planned access road was also considered to have a considerable negative impact on landscape
and biological diversity. The Directorate for Cultural Heritage raised a formal objection on the
grounds of not receiving an application for postponing the required investigation into
cultural/historical sites in the area. The directorate claimed that the potential for locating further
Saami cultural sites in the area could be considerable.
The Saami parliament raised a formal objection to the application, calling for further consultations
before the NVE makes a decision. The Saami parliament was concerned by the total level of impact
on reindeer herding areas, claiming that the ecological, economic and cultural breaking points for the
area are already reached. The parliament calls for a postponement of the licencing process, pending
a court decision related to the report from the committee on Saami rights from 2007. The Saami
parliament also claimed that the potential for discovering Saami cultural heritage sites was
considerable. Subsequently, consultations between the NVE and the Saami parliament were carried
out in August and December 2012, respectively. No settlement was reached between the NVE and
the Saami parliament, neither on the project itself nor on the process of consultation. The Saami
parliament did not withdraw its formal objection. The NVE terminated further consultations with the
aim of reaching a decision on the matter, regardless of the unresolved dispute with the Saami
parliament. The regional authorities for reindeer herding in Nordland and Nord-Trøndelag also raised
formal objections to the project, citing severe negative consequences for Saami reindeer herding and
finding the project at odds with government policies. Parts of the impact assessments were
disagreed upon, and the assessments are not seen as fulfilling formal requirements. As was the case
with the Saami parliament, consultations between the NVE and the regional reindeer herding
authorities were initiated. These took place in August 2012. Consultations did not result in any
change in the position of the regional reindeer herding authorities; the formal objections were
retained. Consultations with the reindeer herding industry itself were also carried out in December
2011 and August 2012, respectively. The industry signalled significant concerns relating to the
project’s impact on the reindeer herding activities in the area.
Additionally, several private interests and organisations gave positive assessments of the project,
citing local economic benefits as a main reason. FNF Nordland responded negatively, however;
claiming that the project would add to an already significant pressure on biological diversity,
landscape values and outdoor life in the area caused by hydroelectric development.
22
Subsequent to this process, the NVE considered this sufficient for deciding on the issue of granting
licence to the Kalvvatnan wind power plant. In sum the benefits of the project was deemed to
outweigh the adverse effects of such an establishment. Consequently, the NVE granted Fred. Olsen
Renewables AS a licence on March 31. 2014.
5.6
LESSONS LEARNED FROM THE CASE STUDIES
In general we have argued that the differences found between Norwegian and Swedish policy
implementation and planning regarding renewable energy production is directly affecting the length
and efficiency of the project development process. The five cases in addition gives us a clearer
picture of the differences and how they affect the development and degree of completion of new
wind energy projects in Nordland compared to neighbor regions.
As a reference for the learning process our case studies are used to shed some light on two basic
issues of the planning system:
-
How do we address and treat all relevant interests and parties involved, in a proper way and
create decisions and solutions that are legitimate, robust and support regional development?
Could the institutional setup and design of the planning and development processes be
adjusted in a way that will provide a better regional contextualization and increased
efficiency of the overall process?
We will now discuss in more detail what lessons we have learned from the case studies and the
comparison between them and the earlier referenced Swedish model and practice.
5.6.1 Application process and national policy context
One general experience regarding the length of the planning and application process for all cases
seems to be that the length and speed of the process is depending on how the project is evaluated in
the context of fulfilling national targets and polices. An example of the relevance of national and
political priorities can be found in their experiences with the national regulation agency NVE in
treating the applications regarding Sørfjorden Wind Power Plant, Ånstadblåheia Wind Power Plant
and Sleneset wind power plant. The two first cases had experienced in general a very positive and
quick response as they were found to be in line with the political priorities NVE had received to give
priority to projects that could improve the regional production of energy to reduce expected
shortages of production that might occur when the LNG operations on Melkøya (Hammerfest)
started and needed energy. The two projects were found to be in line with these (national) priorities
and had a very efficient application process.
The application for Sleneset wind power plant in Lurøy had a very different and more timeconsuming treatment when presenting their project. The project experienced the problems and
delays caused by low administrative capacity in NVE. The lack of energy infrastructure in the planned
area also implied higher investment costs and reduced profitability of the project. In addition the
project seemed to be regarded as less important because it was not located in region with energy
shortages. In the end this led to that the project was abandoned, which in turn also led to that the
investing company (Northern Norway Wind Inc.) reduced their activities and the realization of all 7
other planned wind energy projects in Nordland.
23
However, a basic problem with the translation of national policies to the regional level seems to be
related to the role of the regional policy level compared to the national level. In order to allow
Nordland region to develop innovation strategies in line with the principles of smart specialization, it
seems difficult to manage this without opening up for increased regional political autonomy. In
general, the increasing specialization of politics at the national level combined with standardized
implementation and responsibility for national policy goals at the regional level seems to create
increasing transaction costs and hampering regional innovation. This seems to be the case when we
consider how industrial development in in a strong industrial region like Nordland more is considered
within an isolated environmental context instead of also being a solution very much in line with the
goals of national environment policies.
As we have argued for in the general analysis and suggestion to S3 strategy for Nordland, it will be
crucial to both increase autonomy at the regional level as well as allowing regions to have different
roles for implementing national policies. In the case of wind energy innovation and production, this
would mean that counties like Finnmark and Nordland would play a major role in fulfilling national
strategies and goals, based on their superior resource availability and opportunity to support such
innovation.
5.6.2 Balancing interests of indigenous people and the reindeer industry
The interests of indigenous people of the Sami population and the reindeer industry are playing an
important part in all cases except for the Ånstadblåheia project. In four of the cases the Sami
interests have been articulated and integrated in the application process in many different ways and
often in direct conflict with the realization or scaling of the projects. Another issue in this process is
the legal protection of Sami rights across national borders. In our cases this leads to a need to
consider more widespread spatial consequences of the projects at an early stage and planning and
project development.
This relevance of this issue also seems to be related to a general institutional development of
clarifying and integrating Sami rights and extending the influence of the Sami Parliament in political
and industrial areas. The consequence seems to be that all relevant issues might be very carefully
considered. This does not necessarily mean that the balancing of Sami interests imply a longer
process, but it could be the case if such issues are not well addressed and integrated in early stages
of the planning process, as was the case in the Sørfjorden project where the decision was appealed
to the Oil and Energy department.
5.6.3 Extensive use of dialogue and involvement of interests
A general finding in the cases is the high level of consultation and dialogue used during the planning
and project qualification process. This can be related to the fact that the wind energy projects
represent a very new and different experience for all parts and interests involved, and that the
process therefore need to focus on dialogue, involvement to create necessary consensus and
legitimacy.
On the other hand, this administrative strategy to use dialogue and involvement of all related parties
in the process also reflects some of the differences we have pointed out when comparing the
Swedish institutional setup with the Norwegian. In general it seems to us from the experiences of the
case studies, that the lacking focus on translation of national policy and energy goals to the regional
level makes it necessary to put much more effort into the planning and development process in the
Norwegian process than the Swedish.
In terms of learning aspects from the cases we would suggest that clarifying how national goals can
be translated and prioritized into the regional development policy context, should be addressed in
24
further development of the institutional setup and redesign of the planning process. Given lacking
operational goals and preparations at the regional level, dialogue and extensive involvement with the
aim of consensus and necessary legitimacy creation seems inevitable. This also allows for a process
of discussing almost all elements of commercial development projects in all stages. An alternative
would be to address the strategic decisions in the preparation of national policy and the process of
transform the responsibility to the regional level.
5.6.4 Extensive use of prolonged deadlines
Another issue we find in most cases is the application for and granting of extended deadlines during
the process. The argument for this seems to be that it is necessary to allow necessary information
and documentation to be presented, in order to be able to reach legitimate decisions and process
outcomes. However, this practice is also one important element in delaying the application and
development process, imposing high costs and delays for entrepreneurs.
We also see several variations in the rationale for use of prolonged deadlines, or a threat to call for
such extended deadlines. In the case of the Sørfjorden case it seems to us that the municipality uses
the argument in order to come in a more favorable position to obtain increased local effects of the
project.
In total our impression is that this practice reflects a high level of negotiation throughout the whole
planning process with increased uncertainty and delays as a result. If the delays should be avoided, it
seems necessary to clarify the institutional design of the process and prepare for the consequences
of delays in the early stages of planning.
5.6.5 Opposition rights and practices
We see in several of the cases that involved parties use their opposition rights to a large extent
during the process. The revision of the legislation for planning and building in 2009 opened up for
this new opportunity. We can see that in many cases the County Governor uses these rights and
institute to clarify the environmental issues of commercial use of areas and nature qualities as a tool
within their management role on behalf of the state.
Another interpretation of the practice by the County Governor could be that this gives access for the
national environment policy level (Environmental Department) to be part in the process. However,
such an interpretation generally is difficult to substantiate based on the limited number of cases.
From our cases it seems that the practice of the environmental department at the County Governor’s
office to a large extent reflects a judgment where nature conservation is seen to be best served by
non-intervention or use of natural resources and areas. Increasing number and growth of industries
utilizing natural resources and areal resources for value creation, like experience based tourism, is
creating a new situation and need for development of new conservation strategies based on the new
preconditions. We find in our cases several indications that the County Governor is acting both in
finding pragmatic solutions and adjustments of the projects, as well as following a generally
restrictive line of action.
A learning point from the case experiences seem to be that it is necessary to develop a regional
consciousness concerning how the conservation of natural resources are best served under changing
conditions and increasing level of active use of areas and resources for commercial purposes.
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5.6.6 The role of relevant knowledge and information
When comparing the planning and administrative processes we find the cases with the Swedish
management model, the process in different both in terms of how the stages of the process are
organized and institutionally embedded. In line with relevant theories of adoption processes and
innovation, increased knowledge should support and facilitate the process of commercial
development. Increased and shared knowledge is supposed to reduce the complexity of the
understanding of the process and the underlying goals. In the cases, the lack of relevant or updated
information often is the background for delays and prolongation of deadlines. At the same time lack
of information or limitation of the access to relevant information seems affect how the
entrepreneurs choose to open up its knowledge and information foundation for the project. This
might be a successful strategy for the individual company, but it also creates a need for supplemental
information and analysis in many stages throughout the whole development process.
From the Norwegian wind energy cases, relevant and adequate information seems to be lacking in
the preparatory process and project development. This is partly due to the centralized design of the
Norwegian planning process and the distant role of NVE as an instrument for national policies, with
little emphasis on regional variation and differentiation. This split way of organizing the process and
the dominant role of NVE seems to make space for the search for information in cases where it has a
reduced role in clarifying the preconditions for the wind energy projects. In order to redesign the
process from the case experiences and with reference to the Swedish model, we find it necessary to
address the issues of providing a more consistent and relevant knowledge support to the
management and development processes in projects. This calls for a validation of todays’ practice
regarding both the availability of (more) relevant information as a basis for management and
development activities.
Our experiences from the cases also indicates that the processes could be speeded up significantly if
opportunities to design and carry out knowledge development could be carried out in parallel rather
than the sequential practice which seems to be the case in many projects today. A revised process
with emphasis on a regular preparation of necessary information and knowledge could make it easier
for entrepreneurs to identify the policy and institutional environment and priorities for commercial
development. This might also limit the need for delayed collection of data in the stages of the
process leading up to the license decision.
Improvement of the management and planning process could be to prepare for a wider role of
regional and national authorities in obtaining more updated knowledge and information, and
thereby reduce the problems limiting entrepreneurial discoveries which we discussed earlier. With
reference to the Swedish model, their organization of documentation of knowledge and research at
the portal “Vandal” seems to be an important fundament for both the more “rational” design of the
planning process as well as providing knowledge necessary to clarify in what ways national policies
will be handled and translated to local/regional policy goals and strategies.
We do think that a better availability to relevant knowledge and information would contribute to a
more concrete and goal directed local process. This also implies that the planning processes of
municipalities involved should be prepared on a regular basis, and not so much ad-hoc based manner
when the project is presented.
5.6.7 The need for increased cohesion in relevant regional policy areas
From the cases and comparison with Swedish practice, it seems necessary to strengthen the internal
coordination between different administrative and policy areas at the regional level, in order to be
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able to pursue regional innovation strategies in line with the principles of smart innovation. The logic
for this is that regional innovation and industrial development processes are dependent on improved
coordination.
In the case of wind energy development in Nordland, it is evident from both these cases and other,
that the translation of national goals will be relevant for Nordland due to the abundance of available
wind resources found here. On the other side such a strategy calls for a more holistic regional
approach to planning and management processes, in order to support entrepreneurial discoveries
within other core sectors of Nordland’s strategy for smart specialization.
5.7
SUMMARY ON REGIONAL INNOVATION POLICY AND PLANNING
In order to enhance increased regional production and use of renewable wind energy resources the
present situation seems to indicate that the profitability of the projects are low, leading to reduced
interests among potential investors to develop new projects and install plants. The competition with
low cost and sustainable energy production from hydroelectric power further reduces the
profitability of the projects and future income opportunities.
In addition to being a region with vast resources for hydroelectric power production, Nordland is also
one of the most important regions to fulfill the national targets for increasing new renewable energy
production by 2020. Therefore, regional innovation policy should address and develop measures and
incentives relevant to this national role and the utilization of the strong resource position. The smart
specialization process should address how this position could be supported and thereby supporting
commercial actors in developing the new industry.
In terms of incentives, wind energy development seems very dependent on the use of targeted and
efficient incentives to promote technology development and maturity. The present green certificate
agreement needs to be supplemented with new measures both addressing the commercial effects
needed to make projects profitable in the early stages, as well as creating more long termed effects
by prolonging the planning horizon beyond 2020.
The development of a more robust and distributed infrastructure/grid for increased use of renewable
resources must be addressed by a further development of the national and regional policies and
roles, where the state/national level is responsible for national energy infrastructure necessary for
secure production and efficient transport of energy to the best alternative uses for regional and
national value creation, whereas regions like Nordland will have a primary role to develop the energy
based elements of Nordland’s strategy and regional development in line with the principles of smart
specialization.
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6.
CHALLENGES FOR SMART REGIONAL WIND STRATEGIES: MORE
TECHNOLOGICAL INNOVATION IS NEEDED
In terms of incentives, the current technologies of wind energy development are not likely to
be able to expand in a country with no feed-in tariffs. Instead, Nordland needs targeted and
efficient incentives to promote technology development. The present green certificate
agreement needs to be supplemented with new measures both addressing the commercial
effects needed to make projects profitable in the early stages, as well as creating more long
termed effects by prolonging the planning horizon beyond 2020.
The development of a more robust and distributed infrastructure/grid for increased use of
renewable resources must be addressed by a further development of the national and
regional policies and roles, where the state/national level is responsible for national energy
infrastructure necessary for secure production and efficient transport of energy to the best
alternative uses for regional and national value creation, whereas regions like Nordland will
have a primary role to develop the energy based elements of Nordland’s strategy and
regional development in line with the principles of smart specialization.
In addition to being a region with vast resources for hydroelectric power production,
Nordland is also one of the most important regions to fulfill the national targets for
increasing new renewable energy production by 2020. Therefore, regional innovation policy
should address and develop measures and incentives relevant to this national role and the
utilization of the strong resource position. The smart specialization process should address
how this position could be supported and thereby supporting commercial actors in
developing the new industry.
Seen in relation to the strategy of smart specialization, wind power planning in Norway has the
following challenges:
Norwegian
wind
power
strategy
Energy production and energy Deregulated energy market
market coordination
with no export option
Costs and risks of spatial Energy companies pays the
planning
costs and takes the risk
Innovation system
Priority to oil and gas
Smart wind power strategy
Green energy region strategy
Support for entrepreneurial
discoveries: the state takes the
risk
Test-bed for industrialization of
green energy technology
1. No plan for energy market expansion, instead competition between projects. As the
investment bubble started to build, and in a situation where there was no
comprehensive public plan, the solution was competition between projects, where
environmental concerns was used to stop “unwanted” energy projects.
2. Privatization of the costs of spatial planning. In oil and gas, salmon production and
production of hydroelectric power there are considerable positive experiences with
comprehensive, science based spatial planning processes. In Sweden, this challenge
was met with a comprehensive national research program on wind energy. In
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Norwegian wind energy, these expenses were privatized, and the approach was
based on competition between projects, in a way which increased the risks for
investors.
3. No regional system for technological innovation. The regional knowledge base in
electro technical industries is weak and lacks institutional support as a regional actor.
Most projects are based on existing technologies.
The result seems to be that even projects which are approved are not started up. There are few
success stories so far. So what does it take to make wind power planning smart?
6.1
A SMART GREEN ENERGY REGION STRATEGY
Nordland is a green energy region. In the first phase of the development of this region, green energy
was provided by hydroelectric power which was developed and used for metal processing and in
chemical industries. The institutions supporting this strategy of development were based on
cooperation between the state and the municipalities, enjoying rights to cheap energy. In the 1980s,
they were removed and replaced with neo-liberal set of institutions which are in power today,
creating stagnation both in industrial and green energy production. What is left is an industrial
structure, which still remains, a high production of hydroelectric power, as well as an unexploited
potential for increased green energy production.


A comprehensive public program on spatial planning for green energy production.
Experiences from wind power planning processes illustrate the weaknesses of a
privatized system of spatial planning. Planning documents are provided by private
investors, who do not have any over-all framework for spatial planning indicating
where wind energy should not be developed. The result was an expensive process of
trial and error. Since plans are developed by investors, they may be more easily
undermined. The challenge for public actors is to remove these risks by providing an
over- all spatial plan developed by public sector institutions as an integrated part of a
smart green energy region strategy.
A strategy of new technology absorption and industrialization. There is a rapid
development of new green energy technologies globally. Today technologies in terms
of wind power are claimed not to be competitive with hydroelectric power
production. Technologies for harvesting the energy of ocean currents and waves are
under development, but not tested under the local conditions in Nordland in any
serious way. What we may expect in the next few years is that technologies will
emerge which turns wind, waves and ocean currents in Nordland into potentially
profitable areas of investments. What should be expected in the future, accordingly,
are Norwegian or foreign private investors, who might invest in an energy region
strategy in Nordland. This fist sign is planned investments by the Swedish company
LKAB in metal production in Nordland.
A smart regional strategy should prepare for this by increasing its absorptive capacity, in terms of
industrialization of green energy technology in the local conditions provided by the nature in
Nordland. One approach to this within the EU framework of Smart Specialization is to network
within the framework provided by Interreg with regions with strong electro technical industries
and systems of innovation.
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This cooperation could aim at a strategy for European energy clusters, enabling industrialization
of new energy technology, and in that way producing new energy which can be used for
industrial purposes. A good starting point would be a joint technology foresight, where our
partner region which is strong in electro-technical issues could help us in planning a new energy
region strategy.
6.2
CONCLUDING REMARKS
Finally we would like to reflect on the experiences from the case studies and regional comparisons
between different planning systems. As a point of departure we would like to go back to the basic
questions raised in chapter 5.6, concerning
-
How do we address and treat all relevant interests and parties involved, in a proper way and
create decisions and solutions that are legitimate, robust and support regional development?
Could the institutional setup and design of the planning and development processes be
adjusted in a way that will provide a better regional contextualization and increased
efficiency of the overall process?
In order to improve the regional planning system and capacities, our findings regarding these
questions reflect necessary areas of improvement for the regional planning and governance system.
To address the first question it is crucial that the planning regime and process can support legitimacy
both regarding process and outcomes. In order to create such legitimacy, we find it necessary from
our case experiences that the regional and relevance of energy projects is sufficient articulated and
supported strategically.
This implies that national strategic goals have to be translated to the regional level. In a more
regionalized planning regime this means to allow regions to take responsibility for national policy
goals according to their available resources and advantages in bringing national strategies to actual
development and innovation. On the other hand, increased regionalization of industrial innovation
necessitates a clearer division of roles between central state agencies and regional institutions.
As we have pointed out in the lessons learned from the cases, we find that creating legitimacy and
trust in both planning and implementation processes is crucial in order to increase the planning
speed and predictability of the implementation/development process. The case experiences indicate
that the legitimacy could be increased through clearer regional strategic priorities, as well as through
developing further the dialogue and consultative measures reflected in the present institutional
governance of the processes. This is relevant both within the present central facilitation of the
planning process by NVE, and within a more regionalized system with the county administration as
the main coordination actor of the process.
Another finding from the case studies is that the present planning process facilitated by NVE uses the
process oriented legislation found in the Norwegian Planning and Building Act, supplemented by a
number of other acts and legislation. Such a practice could also be supported by a more regionalized
planning system.
We also find that available and relevant knowledge is important to create a necessary level of
legitimacy necessary to balance interests and find solutions throughout the planning and
implementation process. One problem with the present system is the distance between the central
facilitator of the process, NVE, and the local parties and interests being affected by the process
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outcomes. With lacking formulation of regional innovation and development priorities, such process
tends to be very time-consuming and conflict oriented. The necessary translations of national
strategies and regional development priorities will together with improved and accessible knowledge
contribute to better opportunities to find constructive solutions and balancing of interests.
A further comment can be made regarding the regional planning regime and the way solutions can
be supported. We find that regional innovation strategies in line with the preconditions of smart
specialization are based on an increased regional responsibility to balance regional growth and
sustainability of the resource platform. The regional planning system should develop and reflect
such an enhanced role of the regional administration both in articulation the regional innovation
platform, as well as taking responsibility for the realization of national policy and goals.
In addition we find that such at context for regional planning and development necessitates
extended and different measures to compensate or restrict industrial activities. In todays practice we
find that most of the mechanisms of compensation or to affect entrepreneurial actions are directed
towards non-use of natural resources as the alternative. With smart specialization in mind, the
competitive use of natural resources is expected to be increasing, and this also will have
consequences for the mechanisms involved. We see an increasing number of industries and activities
where national conservation of natural resources can be combined with increased actual use. From
our case studies it seems that this change needs to be reflected within the national and regional
actors involved in conservation of natural and cultural resources
At the regional administrative and political level, a general finding is that planning processes and
regimes have to be more spatially integrated and less specialized. This is necessary both to address
the formulation of regional strategy priorities, as well as to create the necessary foundation for
balancing of competing interests in the use of scarce and common natural resources.
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