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How Norway could become Germany’s most important energy partner

How Norway could become Germany’s most important energy partner

Putin is giving Norway a windfall. The country sits on large energy resources, which Europe and Germany are willingly buying from Norway because of the war in Ukraine. But the deal could be short-lived.

In the last few meters, Russian head of state Vladimir Putin raked in billions again. The Ukraine war, sanctions and climate targets make Gazprom a temporary business. Economic experts give it a maximum of two years. Until then, Putin wants to get what can still be gotten. This has become clear in recent months: Various unsettling maneuvers, starting with the threat of supply stops, caused gas prices to skyrocket – and washed huge sums into the Russian state coffers, even though less gas flowed to Europe.

In doing so, Putin has hit a sore spot in the European Community. States and households already have to think about how to manage the scarce resources and raise the money for the accruing energy bills. Putin is giving others a real windfall. Example Norway.

The West is also benefiting from Putin’s war

Due to the temporary closure of the Nord Stream 1 pipeline and the resulting rise in prices, the country was able to quadruple its gas export revenues. Norwegian energy giant Equinor’s net profit has recently tripled. In the second quarter, the group made a profit of 6.6 billion euros. For comparison: In the months before, the income was still 1.9 billion euros. Norway also recorded a historic foreign trade surplus in July. According to the National Statistics Institute, the value of Norwegian goods exports exceeded imports by 15.6 billion euros.

More records could follow. Because of the war, the EU and Germany want to distance themselves from Russian energy imports. Norway is supposed to close the gap. . Three out of seven Norwegian export pipelines lead to Germany. From January to April of this year, 15 billion cubic meters of natural gas were pumped into the Federal Republic via them. Norway thus covers almost a third of Germany’s gas requirements.

If it goes to Germany, then it can be significantly more in the coming months. On his trip to Scandinavia, Chancellor Olaf Scholz announced that he and Norway’s Prime Minister, Jonas Gahr Störe, want to expand their energy business. The federal government has been trying to achieve a closer energy partnership with the Scandinavian countries for months. The dispute over Nord Stream 1 has brought Norway closer to Germany. Prime Minister Störe recently emphasized his country’s interest in “being a stable gas supplier for Germany”.

LNG from Norway

Norway may be reliable in terms of regularity. Reliable with a view to increasing gas volumes, on the other hand, rather less. All three pipelines that lead to Germany have already reached the capacity limit, Störe admitted at the meeting with Scholz. We are currently delivering “maximum of what we can deliver”. So no new records after all? At least the export volume cannot be determined politically.

But the gas deliveries are still going to be increased. . In order to bring this to light, the Norwegian Ministry of Energy has adjusted the production licenses for three large offshore fields. For the Germans that would be a salvation from Russian dependency and for Norway with the current gas prices it would be a huge deal.

Supply crisis: Norway could become Germany's new major energy partner.  But not (only) with the gas

But because it is currently no longer possible to pump to Germany, another solution must be found. The federal government is planning to use liquid gas from Norway. The Norwegian Hammerfest plant produces 4.7 million tons of LNG annually, and the trend is rising. In Germany, the terminals required for LNG imports are still being built. . In addition, the federal government wants to rent two floating liquid gas terminals from Norway. They can convert the LPG into gas offshore.

Gas is not the long-term solution

But the Norwegians are aware that gas can only remain a stable source of energy for a transitional period. By 2045, the federal government wants to have achieved climate neutrality. For this, measures must be taken at an early stage. Norway is already a pioneer here. According to (AHK), the country generates 90 percent of its electricity from hydropower. When it comes to generating energy, Norway relies on hydrogen, bio and solar energy, among other things.

At his meeting with the Norwegian Prime Minister, Olaf Scholz announced that they wanted to cooperate more closely on renewable energies. He did not say exactly what the cooperation should look like.

Norway’s ambitious climate plans

According to AHK information, the Nordic electricity system is already linked to the German grid. The electricity exchange between the two countries has been running via the NordLink submarine cable since last year. “Thanks to this coupling, the two countries can distribute their temporary electricity surpluses from renewable energy sources and thus make better use of them”, . In addition, Norway and Germany are examining the construction of another pipeline. However, no gas should flow through them, but green hydrogen.

Beyond the climate plans that Norway is forging together with the German federal government, the country has announced another project. The government wants to store all the CO2 produced by Europe in the North Sea. Otherwise it would be impossible to achieve the climate protection goals, said Prime Minister Störe. This is made possible by the so-called CCS technology (Carbon Capture and Storage). The carbon dioxide is pumped into porous sandstone formations or pressed into degassed natural gas deposits.

In Germany, the Geoforschungsinstitut and the Vattenfall company, among others, have experimented with it. In this country, however, this technology is controversial. Critics say CCS is a risky and unsuccessful strategy because the compression of greenhouse gases can cause earthquakes that could leak underground storage. Norway has been using this procedure for several years and refers to “good experiences” with the current plans.

Sources: , , , , “”, with material from DPA and AFP

Source: Stern

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