GREEN TECHNOLOGY IN THE OSLO REGION

1. GREEN TECHNOLOGY IN THE OSLO REGION Norwegian Cleantech Industry - national and local perspectives Radisson BluAstorija Hotel, Vilnius, Oct 12, 2011 Anders Nordeng, Project Manager, Oslo Teknopol Photo: SEA

2. GREEN TECHNOLOGY IN THE OSLO AREA • Why cleantech? And why Oslo? • Break-down of the segments in the Oslo-region - The Study • Observations on the different segments (national level) • Key export markets for Norwegian cleantech • Role of Oslo Teknopol • Other support agencies (national and regional) • Financial support mechanisms for cleantech • Lessons learned and recommendations?

3. CLEANTECH : AN IMPORTANT MARKET – AND GROWING • Oslo: value added 6 bn€ (MandagMorgen/Menon 2010) • Norway: value added 8 bn € (Menon 2011) • World: 210 bn $ (UNEP/NEF 2011) Cleantech = renewableenergy and environmental services

4. CLEANTECH IS IMPORTANT IN THE OSLO REGION • Leading companies in all cleantech segments. • Already represents 5 % of the region’s value added. • Norway’s leading energy companies have HQ or international department located in Oslo. • Cleantech is to a large extent a knowledge intensive industry, and Oslo is the Norwegian region with the highest number of engineers. • Several world class cleantech related universities and laboratories, especially in photovoltaics (solar) and bioenergy. • Centre for finance (stock exchange, commercial and investment banks) Photo: Giulio Bolognesi / VisitOSLO

5. Power companies NGOs CLEAN TECH Equipment makers Legislation/ Regulation Education R&D Finance OSLO IS STRONG IN CLEANTECH COMPETENCES Services/ Consulting

6. STUDY OF CLEANTECH IN THE OSLO REGION • Quantitative and qualitative analysis by Mandag Morgen Analysis and Menon Business Economics. Sept 2009 – Jan 2010. • Made for Oslo Teknopol and OREEC. • Based on reported turnover, employment and added value of cleantech companies registered in and around Oslo. • Wide definition of cleantech, strict selection of companies to include (must have cleantech as main activity). • Figures adjusted to reflect degree of involvement in cleantech. • Oslo plus eight surrounding counties. • E-mail survey (questionnaire) to 300 most important companies • In-depth interviews with 10 key experts.

8. KEYFINDINGS (2008 figures) • 721 companies. • 12 000 people. • Turnover of 100 bn NOK (12,5 bn €). • Value added of 46 bn NOK (5% of total in region). • Cleantech turnover has grown by 150 per cent from 2000 to 2008. • Solar segment has grown by more than 15 000 per cent.

9. SUMMARY CONCLUSIONS FROM THE STUDY • The different segments originate in very different industries => Cleantech lacks a common industry identity. • “Old” industry of hydro power still very dominant in terms of revenue. • Waste treatment second largest segment. • Hydro power utilities have deep pockets, and can finance other forms of renewable energy generation (e.g. stationary biofuels) and R &D (e.g. osmotic).

10. Hydro power • Competitive without subsidies. • 99 % of Norway’s electricity production. • Concessions in early 1900s (French investors). Little development since 1980. • End-user market liberalised in the 1990s... • ...except for heavy industry which still benefits from cheap subsidised power. • Common Nordic Electricity Exchange (Nordpool). • Power production remains in the hands of public service companies (State or municipal). Export advantage: flexible storage capacity, can supplement less reliable sources.

11. Solar • Companies positioned along the value chain, from silicon processing to photovoltaic power plants. • REC is one of the world’s biggest producers of silicon wafers. Production in Singapore and USA. Closing down plants in Norway. • Other notable companies: Elkem, Innotech Solar, Norsun, Scatec Solar. • Made for export, little use domestically. • World class research at University of Oslo (UiO) and Institute for Energy Technology (IFE).

12. Wind • Norway has a long and windy coastline but local resistance and poor profitability hamper local development and forces the companies to invest abroad. • No major equipment maker, but promising companies in the offshore segment: • Operating offshore wind parks: Statkraft/Statoil (major contracts in UK). • Foundations: Aker Verdal, Seatower, • Installation): Master-Marine, Odfjell,

13. Stationary bio energy • Two main markets for stationary bio energy: • district heating to households (local power utilities, such as Hafslund, AkershusEnergi and Eidsiva. • Transformation of surplus wood into heat/power in pulp/paper industry. • CAMBI is the biggest equipment maker/installer (transformation of sewage water and waste into biogas). • In general, muchof the equipment isimported.

14. Emission reductions from transport • Transport accounts for 1/3 of Norwegian emissions. • Biofuels subsidies abolished 2009. • Strong fiscal incentives for choosing electric vehicle. • Around 3000 pure electric vehicles circulating in 2010, high number of hybrids. • Three small scale producers of electric vehicles – of which thebiggest – Think – has outsourcedproduction to Finland.

15. Carbon capture and storage (CCS) • Statoil has 20 years experience in separating CO2 from natural gas, and in storing under seabed in North Sea. • Focus is now on testing capture from flue gas from gas fired power plants (much lower concentration than in natural gas – thus more complicated). • Aker Clean Carbon and Alstom (France) are testing two different amin-solutions at Mongstad. • Government has (had?) high hopes in carbon capture as a future export. • If capture becomes economically viable, Storage could become a more important revenue source for Norway (deposit European CO2 under the North Sea).

16. Energy efficiency • Heavy industry: much in-house development to optimise processes and reduce the need for input electricity. Hydro, Elkem, Alcoa, ... • Dematerialisation /smarter offices: reduce the need for travel, i.e. videoconferences (Tandberg). • Buildings: various suppliers of isolation and solutions for low emission buildings. Possibly interesting for Lithuanian manufacturers of ready-made houses.

17. Waste management • Second biggest sector in terms of revenues, after hydro power. • Four main sub-sectors: • Technology and equipment for optical separation and recycling. Tomra , Titech. • Treatment of toxic waste. Lindum,... • Recycling of metal: Franzefoss,... • Processing of organic waste into biomass. Veolia, municipal waste management companies. • Tomra and Titech very export oriented, as are some of the smaller companies.

18. Water treatment • Purification of drinking water and cleaning of used water. • Small market in Norway, but in rapid growth internationally. • Some Norwegian companies are internationally oriented. • Cluster of companies in Vestfold (south-west of Oslo). • Solutions for municipal administrations, industry, consumers. • Leading companies: MI EPCON, MalteVinje,...

19. Analysis and Consultancy • Three main sub-sectors: • Risk analysis, verification, classification. Leading company: DNV. • Information/analysis on energy markets and derivates (i.e. emission quotas). Point Carbon, Navita, Viz. • Technical-environmental consultancy. Sweco, Asplan Viak, Multiconsult, Norconsult. • Promising segment for Norwegian engineers: • Brain intensive, not labour intensive. • Quick international expansion possible in niche services.

20. Key Norwegianexport markets • Offshore wind: UK (Sheringham Shoal, Doggerbank) • Solar (silicon PV): Germany, Asian countries. small scale PV in developing countries. • Hydro: Turkey, Balkans, France, developing countries. • CCS: Aker Clean Carbon testing large scale capture at Longannet coal power plant in Scotland. • Emission trading/analysis: several companies with world wide presence. Competition is fierce in some markets:

21. Some notable Norwegian cleantech companies

22. OSLO TEKNOPOL (OT) – A CLUSTER FACILITATOR • Non-profit regional development agency established by the City of Oslo and Akershus County Council. • Mandate: stimulate knowledge based growth (long term) through cooperation between companies, universities and administration (so-called triple helix). • Theoretical basis: Prof Michael Porter’s theories of cluster development, which implies that politicians should actively promote certain selected industries, based on the region’s available competences and resources. • Method: OT does not provide funding for partners/other stakeholders, but will act as go-between, facilitator, and, when the cluster identity is sufficiently strong, OT will act as secretariat for concerted actions (conferences, lobbying, recruitment operations, etc)

23. OSLO TEKNOPOL: FOCUS ON FIVE KEY CLUSTERS • Oslo Teknopol • Governance bodies set up for: • Management and • coordination • Marketing and • communication • Innovation project • development The choiceofthesefivesectors has beenapproved by thepoliticalauthoritiesof Oslo and Akershus. Government Maritime Clean Tech (Energy and Environment) ICT Life science Culture Higher Education and research Private industry

24. THE GREATER OSLO REGION

25. OSLO TEKNOPOL’S CLEANTECH ACTIVITIES • Mappingofthesector (commissionedthe Mandag Morgen Study in 2009). • Series ofinterviewswithleadingcompanies in energy and finance 2009. • Analysisand lobbying: • How to unleash more private investment in cleantech? • Whatshould be therole(s) and place(s) in thevaluechainofNorway’s cleantech businesses? • Messageconveyed to national and localpoliticiansthroughconferences (panel debates), policy papers, oped-eds,…) • Challenge: in theabsenceof a clearclusteridentity, it is hard to ”speak for thewholebunch”. OT has decided to focusonrenewableenergy (especially offshore wind), infrastructure and finance.

26. CLEANTECH RELEVANT ORGANISATIONS/NETWORKS • Sectororiented business federations (for solar, wind, bioenergy, etc). • Green Business Norway: cross-sectororganisation, especiallystrong in thecountyof Vestfold (south-westof Oslo) • OREEC: cross-sectororganisation, especiallystrong in the Romerike area north-eastof Oslo. • IntPow: Government-sponsoredorganisationwiththeaim to promote cleantech export (nationwidefocus). • Oslo Teknopol: focusonenergycompanies and financecorporations (banks and insurance), seeks to influence and amendregulation.

27. FINANCIAL SUPPORT MECHANISMS FOR CLEANTECH State fundingthroughvariousagencies/programmes: • InnovationNorway: Programme for environmentaltechnology • Research Council: supports cleantech-relevant R&D • 11 Centresfor Environment-friendly Energy Research (FME). Two are based in the Oslo-region (photovoltaic and bioenergy) • Enova: supports energyefficiencyprogrammes (e.g. processindustry and heating) • Transnova: supports emissionreductionprogrammes in transport • Gassnova: supports R&D in carboncapture and storage • Eksportfinans/GIEK: guarantees and subsidisedloans to foreign buyersof Norwegian cleantech products.

28. Green industry initiatives on a local level: • Networking: organize platforms, relay information, etc. Participation should be non-committing and free of charge. Be cooperative (not competitive) towards other organisations. Once the private companies are convinced of the “platform’s” usefulness, it can transform into a membership –based organisation, with less need of support from the public agency. Oslo Teknopol has successfully developed this model for the shipping/maritime cluster. Still a long way to go in cleantech, because of the much less developed common industry identity. • Funding: In Norway most support for R&D, demonstration sites, energy efficiency, and infrastructure is State money funnelled through various government agencies. Some of it is handed out locally (through municipally appointed boards), and the municipalities are free to launch their own initiatives. • Programmes: Oslo participates in the Cities of the Future programme, alongside 12 other Norwegian cities. The aim is to reduce CO2 emissions by better land use, transport, heating/insulation and waste treatment. • Purchasing: The municipalities are important buyers of energy, housing, transport, and other cleantech-related services. Unlike private companies who tend to buy the least expensive solutions, municipalities can chose to favour low carbon footprint. OFTEN THE MOST IMPORTANT!

29. CONSIDERATIONS FOR A BUSINESS SUPPORT STRATEGY A cleantech support strategy should be clear on the ultimate goal: • Emission reduction ? The best solution could be to import . • Technology development ? Important segments such as hydro power generation, insulation, forestry and waste treatment are not necessarily very hi-tech. • New jobs in manufacture? Only if labour costs are competitive. Otherwise head office and R&D can suffice. But, there is off course the danger that eventually these functions might follow suit. • Do not underestimate the role of service providers. Some of the most successful Norwegian cleantech companies are in the field of certification, information/analysis and software for trading energy. • Will you support demonstration projects in another country? (whose emission reductions will benefit the host country). Relevant for Norwegian CCS and offshore wind power, for whom UK is more interesting than Norway. • Are you willing to impose more expensive solutions on the consumers (voters)?

30. 10/11/2011 OSLO TEKNOPOL – WE KNOW THE OSLO REGION Oslo TeknopolP.O. Box 527 Sentrum Project Manager: Anders Nordeng N-0105 Oslo, Norway Tel:+47 90 51 20 71 an@oslo.teknopol.noVisit: www.oslo.teknopol.no Thank you for your attention. I’ll be happy to answer any questions during the next coffee break. 30 Photo: Ida Næss Wangen

31. Global investments: resilience despite downturn • 162 bn $ in 2009, down from 173 bn in 2008. Still above 2007-level. • Jump to 210 bn in 2010 (32% increase) • Renewable electricity catching up on fossil competitiveness. • Strong sectors 2009: • Wind farms China • Offshore wind North Sea • Power storage • Electric vehicles UNEP/New Energy Finance 2010