This article from 9 January 2023 was taken from the website www.climatefutures.no
Our partner: Småkraft AS
Småkraft’s historical roots
For over 500 years, farmers, foresters and other landowners in Norway have been harnessing the power of water to build values, expertise and industry with their property. Rural communities and farms joined forces to build sawmills for refining timber from the forest, eventually building mills to refine their agricultural harvests. Toward the end of the 20th century, some of the rivers were used to create small-scale farm power plants that produced electricity. Rural communities have lived with and alongside nature, and have built and used their knowledge of the power of water.
In 2002, we here at Småkraft AS began working together with the descendants of these very landowners to create renewable energy in a way that is more relevant to our times. Landowners make their waterfalls available for a limited period, while we at Småkraft AS provide the expertise and capital necessary to develop the renewable energy. Together, we share the profits from the power plant for 40 to 60 years, before the power plant falls back to the landowners, in accordance with a privately agreed reversion of rights with specified conditions. In this way, we have created a business model with historical roots that solves one of the major challenges of the climate problems: how to build a bridge between those who want to finance important climate investments and those who are affected by the same climate investments on a daily basis in their local area.
Småkraft as a company
The company was established in 2002, and now 20 years later, it has 216 power plants and produces over 2 TWh of renewable energy in a normal year. This comprises between 1% and 2% of all Norway’s electricity. We are now a leading renewable power company that specialises in creating renewable energy from small-scale power plants in streams and smaller rivers. As a long-term company, we develop, build, own and operate hydropower plants. Since 2015, we have increased five-fold in size. We invest several billions of Norwegian kroner in renewable energy each year and are one of the fastest growing renewable energy companies in Norway.
We are currently collaborating with over 800 landowner families. These landowner families receive part of their family income from the power plants we own and operate together, and we are proud of this partnership.
On nature’s premises
Småkraft uses the natural topography to borrow water that naturally flows in rivers to produce sustainable and renewable electricity with our power plants. When we produce energy, we maintain a minimum level of water in the river, and the water is returned to the river when it passes the turbine. The power we produce is then transported to the grid and consumed.
We have seen the climate change over the last 60 years. What will happen over the next 60 years?
Since 1958, the runoff from our rivers has increased by 20%. There is more water. This is important to us at Småkraft, as we need water to create renewable energy. We have also noticed that the water flow is different than before. Precipitation arrives more often in the form of extreme weather. We have more frequent and longer periods of drought, snow falls more often as rain, and there is more flooding. This is challenging for us. It is more dangerous when all the water comes at once, as floods can destroy infrastructure, and we are unable to use the water to create energy.
At Småkraft, we are using a great deal of resources to try to understand these changes and how climate change will affect our business operations in the coming decades. We have already gained some knowledge, but we want to increase this knowledge together with Climate Futures in order to make better decisions in our daily work in the future.
If we can get a better understanding of how climate change and the weather affects the flow of water in our rivers, we will be able to build power plants that are better adapted to the future. We will be able to make more correct and strategic decisions on where we should develop new renewable energy. We can then make more accurate forecasts on a daily and weekly basis, which will improve profitability and/or reduce risk.
What do we want to get out of our collaboration with Climate Futures?
Småkraft operates run-of-the-river power plants, but today’s variable power prices, which fluctuates during a 24-hour period, means that even a minor regulation can result in increased earnings.
More reliable daily weather forecasts would enable us to make better use of the water, and monthly forecasts can help reduce water loss during maintenance work on power plants. Long-term effects of climate change can also help us make more correct investment decisions.