Norway needs more power, and the government’s increased power taxes create enormous uncertainty, says Harald Solberg, leader of the Shipping Association. – The government must completely change course there, he says.
E24 met Solberg during the Zero Conference, where he was among the many who doubted that Norway will achieve its goal of a 55 percent emission cut by 2030.
So far, Norway is only on track to cut 25 percent in 2030, according to its own figures. Solberg believes that it is an essential condition for reaching Norway’s climate goals, and that is that there is enough power for all the climate measures.
– The energy transition is very closely linked to the green shift in many sectors and industries. Without more renewable energy, we will not reach our goals. There, the government must change course completely, says Solberg to E24.
E24 recently mentioned a number of new large electricity consumers in industry and the oil industry that will require 24 terawatt hours (TWh) more electricity than current consumption. Increased consumption for, among other things, transport can increase consumption much more, according to the Norwegian Environment Agency.
Doubts that Norway will reach its 2030 climate targets: – It certainly doesn’t look like that
In order for the maritime industry to be able to cut its emissions, it must replace fossil energy such as fuel oil and LNG with more sustainable forms of energy. This can be done, for example, with hydrogen and ammonia.
The cleanest way to produce hydrogen and ammonia is through electrolysis, and it will require large amounts of renewable electricity to make enough fuel. At the same time, Norway is heading for a power deficit in 2027, according to Statnett.
– There are already many projects on the technology side that are close to being ready for start-up, but they stop due to uncertain access to alternative energy, both hydrogen and ammonia, which are not on the market. And the price for alternative energy is two to three times higher than fossil energy, says Solberg.
– As long as fossil energy is far cheaper than the alternatives, we need politics to build a bridge. But it is not certain that we will need that bridge for so many years, if we manage to scale up the alternatives, he says.
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The new, large electricity consumers
– Incomprehensible uncertainty
The head of the Shipping Association is worried about the government’s tax proposal on hydropower and wind power. The power industry says that investments in upgrading hydropower have been put on hold, and that wind power plants risk becoming unprofitable.
– The tax proposal that the government has put forward now with a greatly increased tax on renewable energy has created enormous uncertainty. There is, for example, a completely incomprehensible uncertainty around ground rent for onshore wind. Around five weeks before Christmas, we have not even received a consultation draft for consultation, says Solberg.
– Nobody knows what the government is proposing about onshore wind, it has only been communicated via press releases. It is completely contrary to all Norwegian good management traditions, completely unheard of for the entire industry, he adds.
He is concerned about the signals the government is giving to international investors, by allowing for major changes in the framework. This can create challenges for future investments in offshore wind, believes the head of the Shipping Association.
– It creates uncertainty about future offshore wind investments. All international investors will then expect that the uncertainty about ground rent can also arise with offshore wind. We need to clarify this very quickly, because this is not sustainable, says Solberg.
The government has pointed out that the tax will be subject to consultation, and that it will listen to the input.
– We think it is absolutely right to have ground rent tax on wind power as well, but it must be arranged in such a way that we also receive future investments, said Oil and Energy Minister Terje Aasland to E24 this week.
North Norwegian power companies on wind tax: – Disaster
Finance Norway warned
In a hearing in the Storting’s Finance Committee recently, Finans Norge CEO Idar Kreutzer referred to the proposal for a ground rent tax on wind power as “an international scandal”. He feared that Norwegian wind power plants would go bankrupt.
The head of Finance Norway told the finance committee that he had met about the matter with 14 international investors with a total of NOK 92,000 billion under management, a sum equivalent to eight oil funds.
– I am concerned about the consequences of increased political risk for the financing of heavy industrial projects in Norway. This is a real fear, said the Finans Norge boss to E24 last month.
– How will this affect international capital’s willingness to finance future projects in Norway, such as offshore wind in Utsira Nord and Sørlige Nordsjø 2? Kreutzer asked.
Storting representative Geir Pollestad (Sp) rejected that ground rent tax on wind power is a scandal, and pointed out that the proposal is to be consulted.
– I take this quite calmly, Pollestad told E24 in October.
Fear of bankruptcies in wind power: – An international scandal