November 28, 2022

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Kraftverka Blåfalli

35 billion power investments at risk after tax news – NRK Westland

– We do not dare to invest, we hope that the authorities will take note, says John Martin Mjånes, managing director of Sunnhordland kraftlag AS (SKL).

Last year, the government said it would raise NOK 33 billion Increased taxes on agriculture and electricity.

The basic rate of interest on hydropower will rise from 37 to 45 percent. At the same time, an unusual tax on hydro and wind power was proposed due to extremely high electricity prices.

The power sector responds by abandoning investments.

According to statistics collected by NRK and Energy Norge, these projects are in progress or at risk:

  • Bright energy – Development of the hydroelectric power station in Roldal-Sultal will be stopped. A cost structure of up to NOK 5 billion. The capacity of the plant is to be doubled to 600 MW. Annual production should increase by at least 0.2 terawatt hours (TWh).
  • Hufslund Environment – Ten potential development projects in southern Norway are at risk and, at worst, could collapse. NOK 10 billion cost structure. 600 MW of electricity and 700 GW of electricity will be added.
  • Actor energy – Planned pumped power station on Baikal is being scrapped. This also applies to many projects that require increasing productivity. A cost structure of at least NOK 11 billion.
  • Eveny – Eviny has five projects involving the expansion of several hydropower plants in Westland. Now, according to the company, things are being sought for the project. About 80 – 85 GWh of additional energy will be provided.
  • Statecraft – It is considering suspending the expansion of Mauranger 2 power plant at Hardanger. NOK 5 billion cost structure. 630 MW of electricity and 80 GW of capacity would have been added.
  • Sunnhordland Kraftlag (SKL) – Set aside the Blåfalli Fjellhaugen project, which should increase the capacity to produce more power in a short period of time at Blådalsvassdraget in Kvinnherad. NOK 1 billion cost structure. 160 MW of electricity and 70 GW of capacity will be added.
  • Hydro – The Ilvatn pumping station at Luster in Sogne is at risk. NOK 1.2 billion cost structure.
  • Parish Authority – We are now counting the planned investments connected to the Feios and Offerdal power plants. NOK 1.4 billion cost structure. 200 GWh will provide additional energy
  • Tafjord Power – Considering investments linked to two projects in Sunnmøre worth NOK 100 million.
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In total, these are investments worth NOK 34.7 billion.

Lies Stopper Project: The hydropower plants in Roldal and Suldal are to be upgraded for five billion kroner. From consuming here in Blåbergdalen.

Photo: Lies Craft

– May increase electricity prices further

– We have an energy crisis and then we need more renewable energy. “With the proposed increased taxes, I don’t see how new renewable projects can be implemented,” says Christine Lyon, managing director of Hufslund Eco Vancroft.

He believes that consumers are also losing out due to the tax action.

– It will be difficult to reduce electricity prices. If we don’t develop more energy, we will have energy shortages in Norway.

Attdr.  Christine Lyon at Hofslund Ego Vaskraft

Ten projects at risk: Christine Lyon at Hufslund Eco Vancroft says many power plants and upgrades could be abandoned.

Photo: Bård Siem / NRK

– The government earmarked the green transition to balance its own budget. This is very short-term thinking, says Evind Helo, director of renewables and environment at Energy Norge.

He pointed out that if more clean electricity is not available in 2025, we are heading towards electricity shortage.

NRK tried to contact Finance Minister Trygve Slacksvold Vadham for comment on the matter, but did not receive a response.

Disagreement among experts

Professor Stein-Erik Fletton of the Department of Industrial Economics and Technology Management at NTNU is skeptical that the power company will actually stop the project.

– It is not particularly plausible that power companies will hold off on investments.

– Because this basic income tax is called neutral. It is designed so that activities and investments that were profitable before the tax hike are profitable after the tax hike, he explains.

He clarifies that the so-called prelude Higher price tax On water power is only intermediate.

AURLAND: Water in a pumped power plant is used many times as the electrolyte in a battery.

Pumping Power Plant: Orland 3 is a pumping power plant where water is used multiple times. Energy Norge says such power plants are particularly affected by the peak tariff.

Photo: Hafslund Eco

Osmond Sunde Walseth, senior economist at Vista Analytics, said it was not yet clear whether the scheme with higher tariffs would be introduced permanently.

– But as long as companies expect the charges to be relatively permanent or similar charges will be introduced again if electricity prices rise, Walseth says higher prices will negatively impact contribution investments.

– In the best case, we get a postponement, not a shelf of the project, says Espen Moe, a professor in the Department of Sociology and Political Science at NTNU.

Kristin Linnerud, an economist and professor of renewable energy at Norway’s University of Environmental and Biological Sciences (NMBU), believes that a higher price tax could have an effect on appetite for investment.

– But myMost threats can be threats.