Norway to Give More Time to Build New Renewable Plants

Renewable power producers will have more time to build new plants to qualify for a subsidy in Norway under a common support scheme with Sweden, the Norwegian oil and energy ministry said on Friday.

Investors in renewable power plants, such as hydro, wind and solar, will have to complete their projects by end-2021 to be able to claim the support, instead of end-2020, the ministry added in a statement.

Under the scheme, producers are awarded so-called "el-certificates" for each megawatt-hour of green energy, which consumers have to buy to cover a quota of their power use.

The Norwegian government has also proposed to exclude oil refineries, one of the biggest power consumers, from the obligation to buy certificates.

The plan is aimed at levelling competition between Norwegian and Swedish refineries, as well as those in northwestern Europe, which don't have to incur certificate costs.

The proposals have to be approved by the parliament.

The two Nordic countries agreed in March to raise a common goal of increasing renewable power output by 2 TWh to 26.4 TWh by 2020, compared to 2012.

The ministry said it proposed to extend the deadline for commissioning new plants until end-2021 to reduce the risk for projects that can contribute to economic growth and employment.

Norway has lagged behind Sweden in new wind power developments as many projects were put on hold due to high costs or were moved to Sweden due to more favourable tax rules.

Norwegian energy regulator NVE has issued licenses to build wind power plants with a total capacity of 7,300 MW, but only more than 800 MW have been built so far.

While the government has pledged to harmonize tax rules, there is a risk that some projects would not be able to be commissioned on time.

The state-owned power group Statkraft said in March it was looking for investors to take stakes in a planned 600 MW onshore wind power park in central Norway.

In total, it plans to develop 1,000 MW of wind power capacity in the area by 2020.

Reporting by Nerijus Adomaitis