On Wednesday morning, the government presented a new tax on aquaculture and wind power. They also increase the tax rate for hydropower and introduce an extraordinary tax on hydropower and wind power. There have already been several strong reactions from the farming industry. But they are not the only ones who react. Managing Director of Energi Norge, Knut Kroepelien, says the Norwegian power situation may become even more troubled. – The tax measures the government is presenting today could lead to a deeper and longer power crisis. That’s what Knut Kroepelien, CEO of Energi Norge, says. He believes it is completely wrong for the government to extract more money from the power companies. He believes this could rather have been invested in renewable energy. Major consequences NHO director Ole Erik Almlid also believes that the new measures could be devastating. In the worst case, lead to less willingness to invest. – And this is happening at a time when we need more such investments, Almlid told news earlier on Wednesday morning. The CEO of Lyse, Eimund Nygaard, is already saying that the taxation could have major consequences. Eimund Nygaard, CEO of Lyse, says the new fees may go beyond new investments for the power company. Photo: Ingvald Nordmark / news The power group has plans to make major upgrades to existing power plants. Now they have to assess the profitability of the projects again. – This is a massive transfer of values from the municipality to the state. There is a higher taxation of funds that have currently gone to the municipalities. This means that when Lyse has to pay massively more in tax. – In the long and short term, these will be funds transferred from the municipality to the state. Very surprisingly Deputy Mayor Pål Morten Borgli in the power municipality Sandnes believes the state is now robbing the local community of income. The municipality was expected to earn NOK 250 million from licensing power this year. – It is very surprising that they go after the power producers and the owner municipalities that house them. It is sad. It goes beyond important investments in renewable energy, says the Frp politician. Pål Morten Borgli (Frp) is deputy mayor of the power municipality Sandnes. He is also chairman of the company assembly in the energy group Lyse. Photo: Eirik Gjesdal / news Energy group Lyse informs news that they will lose all of their profits if the government’s increased taxes for hydropower are implemented. – We will have to pay NOK 3.2 billion more in tax due to the increase in basic interest taxation, says CEO Nygaard. – This will mean that the 14 owner municipalities in Lyse will miss out on NOK 2.5 billion in dividends next year. Lyse must also go through all the investments they have planned. Also the upgrading of the Røldal-Suldal power plant. Completely wrong prioritization Knut Kroepelien in Energi Norge says the renewables industry already has a high tax burden. – Hydropower in particular is hit hard by today’s proposal. The government estimates that this will result in a total marginal tax of 90 per cent. He adds: – The industry fears that several hydropower producers will end up with an effective tax rate of over 100 per cent. Knut Kroepelien at Energi Norge fears that the power crisis could worsen following the government’s tax measures. Photo: Caroline Roka / Energi Norge He thinks it should rather be focused on making arrangements to build more clean power. Especially since we expect the power surplus to disappear within a few years. – Then it is completely wrong for the government to raise these funds for other purposes. Kroepelien clarifies that they are happy that the government is also taking action to facilitate better fixed price agreements. Will not weaken the opportunities Energy policy spokesperson for the Center Party, Ole André Myhrvold, argues that the government’s measures will not go too far beyond the power companies. – No power producers in Norway consider an electricity price above 70 øre per kilowatt-hour when building new power or upgrading or expanding existing production. – Therefore, these changes will not weaken the opportunities for investments in renewable energy either, he says to news. Energy policy spokesperson for the Center Party, Ole André Myhrvold. Photo: Stortinget / Stortinget Myhrvold says power production in Norway should have a healthy surplus. – But it is mainly infrastructure to give people and businesses reasonable power. We are now taking political steps to secure predictable fixed price agreements for business at acceptable prices in a market where the power price has been too high in the past year. – That Energi Norge stands behind the government’s model for fixed price agreements is a good sign for Norwegian consumers and Norwegian business, who are facing a demanding electricity situation. Will facilitate large-scale upgrading Another point Myhrvold points to is how foreign actors must contribute more to Norway. – The government’s action means that the wind power industry, which is largely owned by foreign players, must now contribute back to local communities and communities. It is good for social development in Norway, he explains. The SP politician also says that Energi Norge does not need to worry about the government’s willingness to invest. – The government is facilitating large-scale upgrading of existing hydropower plants, small-scale power and offshore wind, says Myhrvold. Ole André Myhrvold in the Center Party says the government will facilitate large-scale upgrading of, for example, offshore wind. Photo: Ingrid Lindgaard Stranden / news Tor Reier Lilleholt, power analyst at Volue Insight, believes the fees may lead to fewer new investments. – Yes, I think so because hydropower has been the only resource that already has a land rent tax. It has already been a competitive factor in investments. The income base will be smaller. Electricity analyst Tor Reier Lilleholt says a smaller income base can affect the willingness to invest. – Will we see a greater shift towards other power sources as a result of this? – No, I do not think so. History has shown that if someone makes money, then the state comes with taxation. Wind, for example, has been spared in an investment phase, but when incomes are high for them too, then the taxes and duties will probably come. That’s typically how it happens.
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