14 Dec 2020
EUR 56.10 million
|Date of agreement:||14 Dec 2020|
|Amount in NOK:||NOK 600 million|
|Amount in EUR:||EUR 56.10 million|
|NACE sector / loan type:||Production and distribution of electricity|
NIB is providing the loan to co-finance TrønderEnergi’s share of investments into the Fosen Vind project in Trøndelag County of Central Norway.
Fosen Vind is an onshore wind power project comprising six wind farms with a combined capacity of 1,057 MW, and annual production of 3.6 TWh. NIB is financing the following five farms, with a combined production of 2.7 TWh. These are:
Since the Roan wind farm was completed already in 2018, it will not be included in the current proposal, and consequently the installed effect to be financed will be reduced to 900 MW and expected production to 2.7 TWh/a (P50). The total power produced in the park will mostly be supplied to the national grid and cover the needs of around 170,000 households.
Construction started in 2016 and the commissioning will be completed in 2020. The expected total production is 3.6 TWh annually, more than doubling the current wind power capacity in Norway.
The project company Fosen Vind DA is owned by the Norwegian utility companies TrønderEnergi (7.9 %) and Statkraft (52.1%), and the European investor consortium Nordic Wind Power DA (40 %). Statkraft is responsible for the project execution on behalf of Fosen Vind.
Fosen Vind is the largest onshore wind power project in Europe, comprising six wind farms with a combined capacity of 1,057 MW. The expected production is 3.6 TWh annually, more than doubling the current wind power capacity in Norway.
Since Roan wind farm was completed already in 2018, it will not be included in the current proposal, and consequently the expected production for NIB’s part of the financing will be around 2.7 TWh.
The power produced will cover the needs of around 170,000 households. Thanks to Norway’s wind and hydropower resources and previous investments, the country as an excellent power storage capacity providing a regulating capacity. Therefore, the potential of integrating wind in the power system is considered more favourable than in most parts of Europe.
Contrary to wind farm in general, the production from the wind farm will have very limited negative impacts on the stability of the network. This means that power from the wind farm can be used as a perfect substitute for hydropower in conditions of all demands saving water in the reservoirs. Particularly in conditions of low demand, wind power will shift hydro power production from base load to peak load conditions, increasing the value of generated electricity.
New capacity will however put pressure on prices and on the viability of non-subsidised power stations. The impact is nonetheless considered excellent as the project is improving the security of supply by the significant increase in electricity production, diversifying the energy mix, and increasing the use of the highly controllable hydropower at peak load when it has the highest value.
The Nordic power market is currently suffering from the lowest prices in 20 years due to a combination of low fuel prices, a surplus in hydropower reservoirs, and weaker demand which has been COVID-19 related. There are also a number of structural changes such as the increased dependence on intermittent power production and transfer challenges due to grid constraints, and the shift in merit order toward lower marginal cost production leading to increased price volatility and weakened conventional generation.
In the long-term, given the on-going electrification of transport and new transmission capacity, this is likely to reduce current imbalances in the Nordic power market and align power prices with those of continental Europe thus improving the economic outlook.
Wind power is one of the most sustainable ways to produce electricity. The project financed by NIB is predicted to generate 2.7 TWh of renewable energy annually. Given that the added electricity is exported and replaces power with an EU average carbon footprint, the avoided greenhouse gas emissions associated with the project amount to one million tonnes CO2 annually.
This is a project with a potentially extensive environmental and/or social impact (category A, read more)
The Fosen vind project has been reviewed and can be implemented in accordance with NIB’s Sustainability policy and guidelines.