Norwegian Marine Energy Industry: To What Extent Can Norway Develop a Marine Energy Industry with a Limited Home Market?
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This master thesis study to what extent Norway can build a wave and tidal (marine energy) industry with a limited home market. Marine energy entails immense power potential and can become an important, infinite renewable energy source if the technology reaches grid parity. Norway has physical resources, R&D history within marine energy and need for a new industry to extend the offshore competences after the oil reserves are empty. Thus, marine energy could provide great opportunities for Norway in the future. While other countries introduce favourable demand-side policies to stimulate the development of marine energy industry, Norway only has supply-side incentives making marine power production impossible with current, immature technologies. Inexpensive hydropower and low unemployment rates lead to minimal domestic demand for marine energy, and Norwegian private actors are to a low degree involved in the industry. Thus, the limited Norwegian market for marine energy raises a question of whether Norwegian marine energy industry can evolve. In order to investigate the importance of home market in existing theory, a literature review has been conducted. As there is little theory directly related to implications of limited home markets, three theory areas have been studied in depth, namely trade theory, innovation systems and emerging industries. In addition, four mini cases on similar renewable energy industries have been studied to cover potential shortcomings in theory. The thesis is primarily based on ten focused interviews with different marine industry and surrounding industry actors. In addition, we have performed research using leading energy publications and scientific reports, as well as attended conferences on marine- and renewable energy. Our combined data provides information on the development of marine energy industry and the current status of the Norwegian system for development of renewable energy. Our findings suggest that building an industry with a limited home market could be possible, but it demands (1) willingness to develop the industry among industry and surrounding actors, (2) advantageous conditions in home nation, (3) accessible demand in foreign markets, and (4) cooperation among the industry and surrounding actors. Norway has relevant competence from the oil and gas and maritime industries as well as favourable natural resources, which could function as advantageous conditions for development of a marine industry. UK and other leading markets are in addition close and accessible to Norwegian companies. However, our findings indicate that considerable development of a marine energy industry in Norway is unlikely at this point as there is low willingness and cooperation among the Norwegian actors, leading to little collective progress. If Norway is to become a leading nation within marine energy, increased involvement and cooperation among the industry and related actors is needed to ramp up the development: - Entrepreneurs need to increase cooperation in order to drive the technology development towards commercialization. - Policy makers need to increase its focus on marine energy, develop a long-term strategy for development and communicate this to the industry and the public. - Large companies need to extend involvement in the marine energy industry in order to increase legitimacy and contribute to diminish technical and financial challenges. - Investors need to increase knowledge and involvement in marine energy and realize needs in critical stages.