Enter the discussion Expresses the opinion of the writer.
As the only country in Europe, Norway has a zero-emissions energy system based exclusively on renewable hydropower and wind energy.
But still, only half of energy use is emission-free: industry, the transport sector, agriculture and the oil industry are responsible for significant emissions that must be removed with the help of electrification if we are to meet our climate goals.
Ironically, it is the self-imposed tax rules that chase renewable investments out of the country, and thus stand between us and a high-productivity, low-emissions society.
Weathering is in our hands
Terrestrial wind power poses the greatest growth potential for new renewable energy production in the coming years: Norway has the best natural wind conditions in Europe, which has generated significant growth in a few years.
But the Finance Ministry’s recent proposal for a land rent tax would drastically increase wind taxes by up to 62 percent.
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When wind energy investors see that they are on the other side of the Keulen River receiving less than half the tax burden, it is clear where they choose to invest.
In this way, with the stroke of a pen, the authorities cancel any natural advantages we might have, push wind energy investments out of the country, and force a series of bankruptcies in companies that have invested in confidence that Norway is a safe country to invest in.
Norway’s adjustable hydropower is a resource that the whole world envies: it’s emission-free, area-efficient, and it’s the only large-scale renewable energy source that can be turned on and off when the wind doesn’t blow and the sun doesn’t shine.
And the value of this particular resource will increase as Europe decarbonises using an ever-increasing component of unregulated wind and solar power.
But this very important resource is also eroding from our hands as a result of hasty tax measures:
Overnight last fall, the state confiscated NOK 70 billion worth of hydropower equity interests from the Norwegian owning municipalities.
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In addition, an additional tax was imposed on energy companies during the hours when energy scarcity is at its peak and prices are at their highest.
The upshot was that one would now have to search for a long time for someone who deems it worth investing in what we will need most in a renewable future – the power plants that will provide us with electricity in the windless, cooler and cooler skies. darkest hours.
Slowly but surely towards the weathering scenario
Even before the dramatic and ill-conceived tax measures this fall, zero-emission hydropower was subject to stricter taxes than oil: The sum of six to seven different types of taxes meant that the tax burden for hydropower was on average more than 90 percent — and for For some it works well over 100 per cent.
With such a comprehensive tax burden and tax arrangement, investments that are economically profitable are not economically profitable for the owners.
The result is that very little new investment in hydropower, and it will be very expensive to rehabilitate and refurbish the facilities we already have.
Thus, the tax structure is slowly but surely pushing us towards a weathering scenario where hydropower investments are no longer profitable.
And with that, the energy deficit is also closing in — and climate goals seem a long way off.
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The Swedes, with their modest production of hydroelectric power, with the help of the tax system, chose to encourage the maintenance and further development of their hydroelectric production by means of a radical reduction in the level of taxation.
The result is that Swedish hydropower producers bear only a fraction of the tax burden of their Norwegian competitors.
It is actually that simple
In terms of energy, Norway and Sweden are closely integrated, but our neighbors to the east have naturally worse conditions for renewable energy production: wind conditions are generally worse and the Swedish terrain does not provide the same facilities for storing large quantities of water as in the high mountains.
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However, there are large-scale investments in Swedish renewable energy. Why? Because the Swedish authorities understood that:
What you want more of – renewable energy – should be much lower taxes than what you want less of – fossil fuels.
What is profitable for renewable energy developers before tax should also be profitable after tax.
Renewable energy developers must be confident that the terms of the financial framework are consistent and that they have security for their investment.
It is actually that simple. Now Norwegian self-harm must end.
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