In 2018, Norway's biggest private developer of wind power, Stavanger based Norsk Vind, declared profits of NOK 300 million. Now, the company thinks the time is ripe to change tax regulations and framework conditions, enabling a greater share of the values from wind power developments to accrue to the municipalities.
– After many demanding years, the building and operation of wind power has become profitable. Previously, the financing of the business was dependent on subsidies. We are now realising the projects we have been developing during the past 20 years, and we can see that upcoming projects may be realised without subsidies, says Lars Helge Helvig, Chairman of the Board of Norsk Vind.
He thinks a greater share of the assets should accrue to local communities, now that the development has become sustainable also in economic terms.
Solid profits for Norsk Vind in 2018. The backdrop is that wind projects developed and built by the company have been sold.
In a press release, Norsk Vind states that big international companies that need power, and who wish to be part of the green transition, are investing in Norwegian wind projects. One example is Facebook, which has purchased the power production from the 70 turbines of the Bjerkreim wind power plant, from the start in 2019 and 15 years into the future.
Norsk Vind is 77.4 percent owned by Valinor, an investment company. The family-owned company has invested in a number of companies engaged in activities based on sustainable solutions within energy production, infrastructure and aquaculture.
In June this year, Valinor was ranked as Norway's biggest investor in entrepreneur based companies, by Dagens Næringsliv, a business daily. This way, 90 percent of the profits of Norsk Vind are being reinvested in different companies within the renewable sector.
“Sure, we could have gone for that which is traditionally considered as safer investments. However, we wanted to help entrepreneur based companies with a sustainable focus. This has turned out to provide both environmentally and financially positive effects”, says Pål Selboe Valseth, the Managing Director of Valinor.
The government appointed Sanderud Panel, will present its report by 1 October. The mandate for the panel was extended from only considering taxation of hydro power, to also include tax issues related to wind power.
Per Over Skorpen, the General Manager of Norsk Vind, welcomes such a report. The same is the case for NORWEA, a lobby and industry organisation that is working to promote Norwegian wind power production. Mr. Skorpen emphasises that is important that both policies and tax treatment are developed for this new industry.
“Wind power is a rather new industry in Norway, and little policy has been developed for the area. We think the time has come to discuss the framework conditions for and the taxation of the industry. We have to manage to get a combination of framework conditions that will make it profitable to build and operate wind power plants, and that also will return more of the value creation to the local communities.
In the press release, Norsk Vind writes that the company has always worked to develop wind power plants in such a way that the encroachment on nature is minimised.
“At the same time, Norsk Vind notices that there is a need for arrangements that to a greater extent provide increased values for the municipalities. This is particularly important since increased development of wind power is important for reaching national and global climate obligations”, it says in the press release.
Parliament has decided ona 40 percent reduction of emissions by 2030, compared to 1990. For 2050, Norway has an objective of becoming a low emission society. The goal is to reduce the emission of greenhouse gases by 80 to 95 percent relative to 1990. Norway is lagging far behind the objective. The emission of greenhouse gases increased as recently as 2018.
“Norway is dependent on the further development of renewable energy in order to fulfil its climate obligations, and to replace much of the current use of fossil energy. That means we need a tax system that provides further support for municipalities with the implementation of land based wind power projects. In addition, an evolution that supports technology development has of course to be facilitated, enabling also offshore wind power projects to be implemented as sustainable”, says Mr. Helvig, the Chairman of the Board.
The Chairman of the Board refers to the fact that it is the responsibility of the political authorities to develop the tax system, and that Norsk Vind is looking forward to the reports.
“It ought to be simpler and more predictable for municipalities that consider opening up for wind power projects, in order to enable them to quickly calculate which revenues they may expect”, Mr. Helvig says, and continues:
– “Municipalities are already receiving decent revenues through the property tax, but this varies from municipality to municipality. In addition, municipalities get value through development agreements. However, we think that it is quite decisive for the municipalities to have a more predictable tax system to which they can relate.”
Read about it in Dagens Næringsliv
Read about it in Stavanger Aftenblad
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