NORWAY Trends and Developments Contributed by: Jøran Sandvik, Ida Mattsson Sperre and Aksel Tannum, Advokatfirmaet Haavind AS
Introduction Overview of the Norwegian power sector The Norwegian power sector is, in general, highly regulated – particularly when it comes to hydro- power activity, which has more than 100 years of history and still forms the backbone of Norway’s power system. Overall, Norway has stable legal frameworks, which is clearly one of the reasons why there have been so many foreign invest- ments into the Norwegian power sector. For the most part, foreign investors can invest in the Norwegian power sector without specific restrictions – at least when it comes to invest- ments in wind power, small-scale hydropower, grid companies, district heating and other infra- structure relating to the power sector. The main exception to this is large hydropower, where non-public entities (including foreign entities) are not allowed to invest in and own more than one- third of a company that owns such assets. Pub- lic entities, being allowed to own such assets, are defined as entities owned and controlled by public authorities and/or undertakings (at least two-thirds). One important aspect of Norwegian hydropower is that – to a large extent – it is characterised by a flexible production method, as it can be stored using water reservoirs. More than 75% of Norwegian hydropower production is rendered flexible through the use of reservoirs, which rep- resents half of Europe’s total reservoir storage capacity. This is a perfect counterbalance to the increasing amount of non-flexible production, exemplified by wind and solar power. Overview of energy policies The main priorities of Norwegian energy policy include: • improving the security of the supply;
• profitable development of renewable energy; • more efficient and climate-friendly energy use; and • value creation based on Norway’s renewable energy resources. Back in 2021, Norway’s former government issued a white paper on the long-term value cre- ated by Norwegian energy resources, including – for the first time – both the renewables sec- tor and the oil and gas sector. The white paper points out that the Norwegian oil and gas indus- try currently faces major challenges as a result of maturing fields on the Norwegian continental shelf and increasing demand for lower emis- sions. However, it emphasised that the oil and gas sector will remain a significant factor in the Norwegian economy for years to come – albeit not on the current scale. The use of expertise and technology within today’s oil and gas sector to develop new “green” industries and technolo- gies is another important goal for the govern- ment, exemplified by the current development of offshore wind power on the Norwegian con- tinental shelf. In September 2024, the Norwegian government presented a white paper on the sustainable use and conservation of nature. The report is an action plan to ensure that society’s use of nature is sustainable, with the aim of reduc- ing the degradation of nature. The government wants to promote efficient, climate and environ- mentally friendly and safe energy production, while managing nature in a sustainable manner. In instances where it is deemed appropriate for nature to yield, priority should be afforded to societal needs of particular importance, such as the generation of renewable energy. Steering signals for land use are also given in updated state planning guidelines.
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