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A group including Norwegian aluminum maker Norsk Hydro and Swedish construction group Skanska said it would construct the six-to-seven-story building in Trondheim, with offices and shops covering up to 9,000 sq meters (96,880 sq ft).
The building will use solar panels and sunscreens on an aluminum facade, which will have a new energy-saving ventilation system. It will also draw on geo-thermal energy and use other technologies such as heat pumps.
Over the year, it will generate more power than it consumes.
"This will be the world's most northerly 'energy-positive' building," Hydro Chief Executive Svein Richard Brandtzaeg told Reuters in a telephone interview of the project, due for completion in 2013.
"If we can do it here, we can do it anywhere," he said, adding that there were global business opportunities for Hydro in clean energy for buildings that usually emit greenhouse gases from burning fossil fuels for heat, light and air-conditioning.
Trondheim, about 300 km (186.4 miles) south of the Arctic Circle, is on the same latitude as southern Greenland, Alaska and Siberia.
"I have lived in Trondheim myself for more than eight years and I know the weather is a challenge with low temperatures, wind and precipitation. There is not too much sun," Brandtzaeg said.
"This project can have great significance to find good technical solutions to reduce energy use in buildings," Norwegian Trade and Industry Minister Trond Giske said in a statement.
The consortium, dubbed Powerhouse, comprises Entra Eiendom property group as owners, Hydro, Skanska, architects Snoehetta and environmental foundation ZERO.
The new building is meant to help show ways to help slow climate change by shifting from the use of fossil fuels. Brandtzaeg said it was hard to know how much it would cost compared with a conventional building.
He said that Hydro had helped build an office block for Vodafone Group in Milan for 3,000 people, in which the facade cost 16 percent more than a conventional building but helped halve energy consumption.
"It cost 16 percent more, but the payback time is less than two years," due to energy savings, he said.
Hydro said the idea was that, over time, the surplus energy generated by Trondheim building's operations would also compensate for the large amounts of energy used in construction and in smelting the aluminum.
For Reuters latest environment blogs, click on: blogs.reuters.com/environment/
Editing by Jane Baird