3 Jul 2020
EUR 60 million
Financial institutions and SMEs
|Date of agreement:||2 Sep 2016|
|Amount in NOK:||NOK 1,545 million|
|Amount in EUR:||EUR 165.9 million|
|NACE sector / loan type:||Production and distribution of electricity|
|Business area:||Energy and water|
The loan consists of two tranches and will finance investments in automatic electricity meters and distribution, regional and transmission networks.
The first loan tranche of NOK 925 million will finance investments in regional network installations to improve the security of supply and connect new renewable power production facilities as well as oil and gas industry platforms.
BKK will also invest in new distribution network installations during 2016–2019. A majority of the investment relates to installing connection points for new clients.
Also as part of the first loan tranche, BKK will purchase and install automatic electricity meters as part of a national plan to centralise Norway’s electricity market data. This is expected to improve the efficiency and transparency of the electricity market. The rollout of smart meters is scheduled for completion by 1 January 2019.
The second loan tranche of NOK 620 million will help finance a new 420 kV transmission line from Mongstad to Kollsnes. The transmission line runs for 12 kilometres overhead and 31 kilometres underwater, crossing Hjeltefjorden and Lurefjorden. The transmission line will allow more connections from the transmission network to regional networks. The line will initially be operated by BKK, but will transfer to Statnett within five years in accordance with Norway’s strategy for electricity networks.
BKK was established in 1920 and is one of the leading electricity companies in Norway. With 35 wholly or partly owned power plants, the company produces 6.7 TWh annually and serves about 180,000 customers through its distribution network. In addition, the company offers district heating and telecom services.
The new transmission line will improve the quality of electricity infrastructure and increase the security of supply for Norway’s oil and gas industry. Together with the nationwide rollout of automatic electricity meters, it will also support the development of a smart grid in Norway.
At the network level, the improved stability will increase the security of supply and improve the operational efficiency of the entire network, especially if supplies from small and micro-scale energy production units are connected to the network.
Recent studies find some evidence that real-time pricing of electricity will lead to increased energy efficiency and new consumption patterns that will reduce peak-time consumption. These results seem to be stronger when combined with technologies raising price awareness among consumers and automated consumption responses. Should this occur in the NordPool area, the smart meters and the resulting new pricing schemes would place price pressure on the least productive units in the entire electricity pool.
The Mongstad area has a surplus of power, and in summer periods with great hydropower generation potential, the full potential cannot be utilised due to the limited transmission capacity.
The region of Kollsnes has a high usage of electricity due to its oil and gas industry, and it is expected to increase substantially, particularly when the gas rig Troll A is electrified with power from Kolsnes. Electrification of the oil and gas industry may locally have positive environmental impacts, since gas will be replaced with renewable power.
Globally, the environmental impact will be negative since the gas saved will be sold and used elsewhere. From a sustainability point of view, the negative impact of exporting gas is far bigger than that of exporting electricity. The positive environmental impact due to the transmission project is thus offset by the negative impact.
In the long run, grids with real-time meters are expected to have some positive impact on energy efficiency.
Environmental issues relate to concession, use of land, possible impact on sensitive areas and generation of electromagnetic fields.
BKK Nett applied for a concession in October 2007. The permit application has been changed and amended several times. The transmission line has been controversial: 116 stakeholders expressed views on the original application, and 26 stakeholders on the amendments to the concession application. However, a legally valid concession has been in force since June 2012.