A new Norwegian-Finnish partnership this week set out its ambitions for 900MW of subsidy-free wind power development in Northern Norway.

The Grenselandet project – a joint venture of Ny Energi and Vindkraft Nord in partnership with Finland-based St1 Nordic's Norwegian subsidiary, St1 Norge – would develop the 700MW Davvi and 200MW Borealis wind farms in Finnmark county, in the far upper reaches of Arctic Norway on the Finnish border.

Harald Dirdal, director at Ny Energi and project manager for Grenselandet spoke to Recharge about the plans.

What motivated you to undertake a project of such ambition?

The Norwegian government’s white paper from last year outlines a departure from the electricity certificates system and an end to subsidising renewable energy. But at the same time, they made clear [their] ambitions for more wind power. If you look at where you can build without subsidies, Finnmark is really the place to be.

Is there particular demand for new generating capacity in the Finnmark region?

Yes, in large part because sustainable development of oil and gas resources around the Barents Sea requires electrifying processing installations – this carries massive demand for Finnmark.

But there’s a bigger picture to consider. One turbine in Finnmark produces as much electricity as three down in Germany. Even considering transmission losses, generating capacity in Finnmark far outperforms that in southern Norway. Given that the government is very keen on expanding wind capacity, Finnmark makes good sense as a region for development.

How are the sites suited to low cost development?

Honestly, we couldn’t ask for better sites for development. Both locations lend themselves to low cost development. Wind conditions are superb and access to the site is very easy. It’s pretty much a stone desert, so road development and site preparation will be very easy.

The wind resources are fantastic too. We expect wind speeds of nine-metres per second at 80-metre hub height, and around 4,500 full load hours per year. We still have to conduct site measurements, but there’s more than enough wind data available today that provides a very good measure of the operating conditions we expect.

While it’s far too early to talk about turbine selection, I would say, that working in these conditions, the move from corrective maintenance to preventative maintenance is vital; so too are the wind turbine capabilities that go with this.

We’re essentially looking at dealing with offshore site conditions onshore. Already in the area we have many turbines from both Siemens Wind and Vestas, proving that the products on the market right now are performing superbly in these circumstances.

Ny Energi and Vindkraft Nord have formed a consortium for the project. Is this the first partnership between the two?

The people behind the companies have co-operated before, yes, but otherwise it’s a joint venture created specifically for this project. Together, our strength is in significant experience of the Norwegian development process.

And how do you view collaboration withSt1 Nordic?

St1’s strength is in its industrial capabilities, and capabilities towards the Finnish grid – they’re a perfect partner for a project of this size and ambition. Ultimately, St1 will be responsible for construction and operation of the wind farms.

What’s your outlook on going subsidy-free?

It’s an exciting prospect. In my view, it goes without saying that reaching grid parity is a total game changer. The removal of political risk connected to subsidies will accelerate expansion of renewables tremendously.

The industry is not there with grid parity and profitability without subsidy today, but we’re pretty close. If we look at projected increases in Nord Pool electricity prices after 2020, and forecasts for reductions in wind power LCOE, we believe the two curves will cross in the beginning of the next decade.

The industry is not there with grid parity and profitability without subsidy today, but we’re pretty close

Grenselandet’s consent process will take four years, so by time the project is concluded we have very good reason to believe we’ll be profitable without subsidies.

How are investors responding to the idea of a wind park without subsidies as a source of fixed revenue?

Fortunately we’re all set with investment and fully financed through the development phase, so those are not conversations we need to have right now.

But in time of course this project will be pitched to other investors. When that time comes, I believe we’ll be in a good place to convince them. After all, we’re already not far today from where we want to be at the beginning of the next decade.

This project will breach that grid parity threshold, but others will surely follow.

Wind

'If you want to build wind without subsidies, Finnmark is the place'