Norway plans to double hydrogen funding in revised 2021 budget

Author: Kaja Sillett

2021/05/12

LONDON (ICIS)-- The Norwegian government plans to double state funding for hydrogen, increasing spending to NOK 200 million (€20m), according to the revised national budget on 11 May.

Funding for the development of hydrogen infrastructure and markets is expected to rise from NOK 100 million (€10m) as designated in October’s original 2021 state budget, to NOK 185 million (€18.4m) in the revised version.

Infrastructure development will be partly managed by Enova, a state enterprise owned by the Ministry of Climate and Environment, which will manage pilot technology development projects as well as the creation of geographical hubs and supply chains for commercial hydrogen.

An additional NOK 15 million (€1.5m) would go towards a research centre for environmentally friendly energy, specialising in hydrogen and ammonia. The centre is set to receive NOK 30 million/year (€3m/year) for the eight years from 2022 onwards.

The revised national budget will be reviewed by parliament and decided upon at the end of June.

NORWEGIAN HYDROGEN

A roadmap for Norwegian hydrogen development is set to be presented to parliament on 11 June, within a white paper on long-term value creation for the country’s resources.

The country’s hydrogen strategy, released in June 2020, aims to focus on low-emission hydrogen and technologies throughout policy making.

The strategy outlines a need to increase the competitiveness of low-emission hydrogen through emission taxation and tighter quotas.

Power supplied for use in electrolysis was exempt from electricity tax when the strategy was released.

Norway supplies roughly 20-25% of European gas demand and is the third largest exporter of natural gas in the world, behind Russia and Qatar. Estimates from the Norwegian Petroleum Directorat showed that in the 50 years since petroleum activities began, just 49% of total recoverable resources from the Norwegian continental shelf have been produced and sold.

Natural gas is the key feedstock for blue hydrogen, while renewable power is the primary feedstock for green hydrogen.

Despite large natural gas reserves, Norway’s renewable-dominated power generation capacity means the country could also be well positioned for green hydrogen production.

​Of the country’s 40.5GW of power generation capacity in 2021, 84% is made up of hydropower sources, according to figures in ICIS’ long-term power forecast. A further 10% of capacity comes from onshore wind installations.

Out to 2030, Norway’s annual power generation capacity is expected to rise by around 7GW, driven mostly by battery and onshore wind growth.

Additional reporting by Jake Stones