Dozens of small hydropower projects face immediate suspension following Norway's proposed tax changes. Companies warn the new energy tax threatens project viability and could reduce renewable energy development.
Norway's government plans to expand its resource tax on hydropower. The tax previously applied to power plants over 10 megawatts. Now it would include facilities between 1.5 and 10 megawatts.
Industry leaders say this will destroy the economics of new developments and reduce values of existing plants.
Terje Vedeler of SmĂĄkraft AS confirmed immediate action. "We're stopping 11 ready-to-build power plants totaling 114 gigawatt hours," he said. "This takes effect immediately. Our board has already decided and implemented this."
The company is also considering halting ten projects currently under construction.
Rein Husebø of Forte Vannkraft reported similar measures. "Around 10-15 planned projects will be stopped due to this proposal," he said. "We've completely terminated one project after spending 30 million kroner. The risk is too high to continue."
Husebø described the situation as dramatic. "You don't give up a power plant without reason," he stated.
Completed power plants could lose 40-45% of their value under the proposal, according to industry estimates. This could violate loan conditions for many operators.
The small hydropower sector represents over half of Norway's ongoing renewable energy development. SmĂĄkraft AS alone manages 180 power plants nationwide.
Company officials dispute the government's justification. They deny allegations that operators deliberately design plants below the 10-megawatt threshold to avoid taxation.
A government secretary defended the proposal. "We're keeping our tax promise," she said. "The overall tax level remains unchanged. We believe extraordinary returns from natural resources should benefit the community."
She confirmed the tax proposal follows recommendations from official committees and maintains that profitable projects will remain profitable after taxation.
The consultation process continues, with affected companies encouraged to submit feedback.
This tax expansion comes as Norway seeks to balance renewable energy growth with public revenue needs. The immediate industry response suggests significant tension between government policy and private investment in green energy.