Norway’s wind industry warned its government to tread carefully over a raft of new taxes it plans to slap on the sector, amid fears that already low-profit plants could wrongly get swept up in the levies.
The Norwegian government on Wednesday included wind in a range of industries facing new taxes designed to share the profits of the nation’s natural resources and tap windfalls from soaring power prices.
The onshore wind sector faces a ground rent tax, a new natural resources tax, a doubling of production tax and – along with hydropower – a “high-price contribution” set at 23% on power prices above NKr0.70/kWh ($0.064/kWh).
Anders Lenborg, CEO of Norwegian developer Cloudberry Clean Energy, said while it acknowledges the need for redistributing some of the extraordinary high income some power producers have seen the last year, “these significant and surprising changes in the regulatory framework represent a real challenge for the industry.
“It is vital that the government does not impose taxes that will jeopardise the transition to more renewable energy in Norway.”
Norwegian wind industry body Norwea said while the sector is keen to contribute more to society and the measures have “some positive aspects” it would reserve judgment.
Specifically, it wants to make sure the tax does not unfairly penalise plants with low profitability or load retroactive burdens onto existing wind farms.
Norwea spokesperson Robert Kippe said: “Many existing wind farms have had high investment costs and sell the power on long contracts at moderate prices. These parks do not collect ground rent, and therefore should not be taxed as if they do.”
However, Kippe added: “Provided that the new taxes are designed so that the host municipalities are assured of good and predictable income, they can increase the acceptance of new wind power.
“In that case, it will provide more renewable energy and be good news for everyone who is concerned with either the climate crisis, the industry or most people's electricity bills.”
Onshore wind has faced a uphill regulatory struggle over recent years, with permitting freezes, legal action against projects from indigenous reindeer herders and vocal opposition from some politicians.
Norway added 672MW of new onshore wind last year to reach a total of 4.65GW by the end of 2021, according to WindEurope.
