Changing gears in the energy transition

Siri Kalvig, CEO Nysnø Climate Investments
Published in EnerWE 27th April 2020

We also face high unemployment and a Norwegian business sector in crisis. A global pandemic has long been looming on the horizon as a very real threat, yet it surprised us. The climate crisis, on the other hand, is no surprise – and although global emissions are expected to fall five percent this year, the climate crisis cannot be solved by halting neither day-to-day nor economic activity.

Still, the measures to prevent the corona virus from spreading have given us time to consider the things we value most in our daily lives. The things we miss and the things we can live without. We are slowly emerging from this pause – the break between what once was and the new daily life to come. This gives us a unique opportunity to change course and head for a green transition. We now have the chance to change industries, sectors and habits that benefit our planet and climate without paralyzing the economy.

This crisis will create new winners and losers, as all crises in history have done. The future of our planet depends on limiting global warming to below 2°C. Parallel to this, we must adapt to the inevitable climate changes by creating robustness and ensuring lower emissions for the future. To meet the objectives of the Paris Agreement, we must change the capital flows globally.  Fatih Birol who leads the International Energy Agency (IEA), Fathi Birol encourages decision makers to use this crisis develop more sustainable energy.

One important task to change course is by inviting in companies and technologies that create growth as they contribute to lower greenhouse gas emissions. At Nysnø Climate Investments we play a smaller role in this global transition as we manage NOK 1.4 billion. According to the International Agency for Renewable Energy (IRENA) there is a global investment need of USD 130 billion to align the energy system with the climate goals in the Paris Agreement. This is the equivalent to 100 Norwegian sovereign wealth funds! In their latest report they find that more renewable energy, energy efficiency and electrification will stimulate the economy during a global coronary pandemic, whilst at the same time create millions of new jobs. To reach the Paris goals, we must mobilise new more capital towards climate investments, and at the same time encourage the movement of existing capital.

Good climate investments must be efficient and profitable, and Norway is uniquely positioned to contribute here. We have large amounts of clean hydropower and we focus on research and development in areas such as energy, materials technology, and bioeconomy. Our population is a world leader in digitalisation and our society is one of the most electrified societies in the world. We have abundant natural resources in aquaculture, hydropower, energy intensive industrial production and carbon capture, carbon storage and use. Our extensive maritime experience is used to develop a more climate-friendly transport and development of offshore wind and subsea installations.

Nysnø manages state capital and is looking for the best investments – along with private capital. We focus on companies that are ready to move from technology development to scaling and commercialization. Because Norway has a lot to contribute to, our abilities commit us to greater efforts. As the economy has put on the breaks, it is more important than ever to invest in companies that contribute to the green transition. It will create new jobs and a better climate.

In doing so, we can use this moment to move capital and create more sustainability on the other side of the corona crisis.