OSLO, NORWAY - Norway is planning to end its green energy subsidy scheme by 2021 and aims to increase competition in building power lines to other countries, the government said on Friday.
Norway launched a common renewable energy support scheme with Sweden in 2012, so called "el-certificates", aiming to increase electricity output from such sources as wind, hydropower and biomass by 28.4 terawatt-hours (TWh) per year by 2020.
The increase in subsidised renewable energy in the Nordic countries, however, pushed electricity prices to 15-year lows in 2015, hurting producers, such as Norway's Statkraft or Sweden's Vattenfall.
Norway produced 15 TWh of electricity more than it consumed in 2015, while the total surplus in the four Nordic countries stood at 16 TWh.
"To avoid reduced values of our existing renewable production, the government will not introduce new targets under the green certificate system," the Oil and Energy Ministry said, setting out a white paper on energy policy.
Long-term investments should be decided by the market instead, the centre-right government said in the white paper.
Some representatives of Norway's renewable industry, however, said the decision not to extend subsidies had come too early and the government should have focused instead on measures to boost the demand.
"It's a premature goodbye to the el-certificate system," Andreas Thon Aasheim at Norway's wind power association Norwea said.
Norway, which generates about 95 percent of electricity from hydropower, has lagged its Nordic neighbours Sweden and Denmark in wind power developments, despite its windy coastal areas.
At the end of 2015, there were 25 wind farms in Norway with a total installed capacity of 873 MW and normal annual output of 2.5 TWh compared with total electricity production of 143.4 TWh.
Norway's state owned energy group Statkraft, however, decided in February to build a 1,000 MW wind power capacity by 2020, the biggest onshore wind power complex in Europe, which would boost annual output by some 3.4 TWh.
The government has also confirmed plans in the white paper to allow other companies than state-owned transmission grid operator Statnett to build international power links in the future.
Statnett plans to build two links to Germany and Britain by the end of this decade, increasing export capacity by a total of 2,800 MW, and helping to reduce power surplus at home.
A group of Norway's regional power companies and Vattenfall are also considering plans to build a power link to Britain. (Reporting by Nerijus Adomaitis; Editing by Tom Heneghan)