OSLO: Changes to Norway's tax rules are needed to stop wind power investments fleeing to neighbouring Sweden, the power market regulator said ahead of a draft government budget to be released on Oct. 8.
His comments come after Norway's state-owned power group Statkraft called this week for the government to amend tax rules, in particular the length of depreciation of investments, to level out the playing field with Sweden.
The two countries launched the first cross-border renewable subsidy scheme in 2012, aiming to add 26.4 terawatt-hours (TWh) in annual production from renewable power by 2020.
But of the 7.9 TWh produced so far, only 1.2 TWh came from Norway, the Swedish Energy Agency said in August.
"The overall situation is that we give licenses, but there are no investments in Norway," Per Sanderud, head of the Norwegian Water Resources and Energy Directorate, told Reuters in an interview.
Norwegian authorities have approved a combined 3,000 megawatt (MW) of capacity able to produce more than 9 TWh, Sanderud said.
"Investors tell us that tax conditions are different in Sweden and Norway, and it's more profitable to invest in Sweden," he added.
Were the government to amend tax rules in the upcoming budget, Norway could see up to 25 billion crowns ($3.94 billion) invested in new wind power projects, lobby group Norwegian Wind Power Association has estimated.
Statkraft's Chief Executive Christian Rynning-Toennessen told a Nordic utilities conference earlier this week that it cost 50 crowns ($7.9) per megawatt-hour (MWh) less to build a wind farm in Sweden than Norway.
The company has plans to build up to 1,000 MW of new wind power parks in Norway, but hasn't made any investment decision yet, he said.
"If the amendments come into the budget, and we get a level playing field on taxes and depreciation, it will help these projects," Rynning-Toennessen told Reuters on the sidelines of the conference.
So far, Norway has built just over 800 MW of wind power capacity, while Sweden has about 4,500 MW, including projects which built before 2012.
Norway's Oil and Energy Minister Torld Lien declined to say whether the new budget to be presented on Oct. 8 would include tax changes to help wind power.
"Our goal is to see more investments (in wind power) in Norway," he told Reuters on the sidelines of the conference, without elaborating.
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