Positive Environment News

Norway Details US$3 Billion Renewable Energy Plan

Date: 06-Oct-06
Country: NORWAY
Author: Wojciech Moskwa

The Oil and Energy Ministry said wind-power producers would get 8 oere (0.08 crowns) per kilowatt hour produced, bio-energy producers and other pioneering technologies 10 oere per KWh and small hydropower plants 4 oere for 15 years starting from 2008.

The money would come from returns on the renewable energy fund, which will also finance investment in bio-energy, district heating projects, energy savings and energy efficiency. The fund was initially announced in June.

"By establishing this subsidy scheme for renewable electricity the government has paved the way for new power production," Oil and Energy Minister Odd Roger Enoksen said.

"Industry must now take its part of the responsibility for getting more renewable power into the network."

Energy-rich Norway, the world's third biggest exporter of oil, produces 99 percent of its electricity at hydropower plants, but faces an electricity shortage with demand rising and supplies limited with most major waterways already dammed.

An unusually dry summer sent power prices soaring amid fears that Norway, one of the world's richest countries, may have to ration electricity this winter as low water levels curb hydropower potential.

Norway also needs to promote renewable energy use because its emissions of heat-trapping carbon dioxide, mainly from burning oil, were above target at 9 percent above 1990 levels in 2005.

Under the Kyoto Protocol on curbing global warming, Norway must limit any rise in emissions to no more than one percent by 2008-2012 compared to 1990 levels.

Norway's centre-left government plans to provide 10 billion crowns for the fund in the 2007 budget, which will be presented on Friday, and put another 10 billion into it in 2009.

The fund aims to rise renewable energy production, heating and energy efficiency by 30 terawatt hours (TWh) -- or 24 percent of Norway's electricity consumption last year -- by 2016 compared with 2001.

The previous target was for 12 TWh by 2010.

"There is great interest in developing wind power, and there is a significant number of small hydropower projects that are ready for development," Enoksen said in a statement.

The fund will be managed by state energy company Enova.

After winning power last year, Norway's Labour-led coalition promised to re-evaluate energy regulations and keep a heavy state role in production and distribution of power.

(Additional reporting by John Acher and Terje Solsvik)

© Thomson Reuters 2006 All rights reserved

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