Norway to implement resource rent tax on onshore wind farms

Norway intends to impose a resource rent tax on onshore wind power from 2024, in order to make sure that the worth provided by the country’s natural resources benefits the community. The idea is part of a modified measure that calls for a 35 per cent effective tax rate, organised as a cash flow tax with an instant deduction for investment expenses. Moreover, the rate of taxation is less than the 40 per cent tax proposed during the discussion phase.

Reportedly, the levy will be imposed on investments made after January 1, 2024, whereas current facilities will benefit from “generous transitional arrangements,” including a deduction offered through depreciation of the input value and depreciation compensation. According to preliminary projections, the proposed tax will generate around $27.3 million in gross revenue in 2024.  At least 50 per cent of the revenues raised will be returned to the communities that will accommodate the wind farms. Furthermore, projects with normal fixed-price contracts and new schemes with power purchase agreements inked between 2024 and 2030 will be immune to the additional tax for a limited time.

In August 2023, Equinor inaugurated the 88 MW Hywind Tampen floating offshore wind farm in the Norwegian North Sea. The electricity produced will be used to power Equinor’s oil and gas fields. The wind farm will help the company cut down its oil and gas prices. It is located 140 km from the coast in water depths ranging from 260 to 300 metres and comprises 11 turbines, each having an 8 MW power generating capacity, mounted on floating concrete structures with a shared anchoring mechanism.