0906 GMT January 21, 2022
Hydropower is the backbone of the Norwegian energy system with an 87% share of domestic electricity consumption and although Norway is not a member of the European Union, the bloc’s regulations impact its economy, Reuters reported.
In November, the commission published a proposal for its financial taxonomy, a system of classifying activities that can be marketed as sustainable, and which acts as a powerful funding tool for achieving climate change objectives.
Norway is worried that proposed screening criteria for hydropower, including detailed instructions on life-cycle CO2 emissions as well as on the use of water and marine resources, could rob the industry of its green status, the Finance Ministry said.
The criteria for hydropower were more comprehensive and detailed than for other renewable technologies such as wind and solar, it added.
Instead, it called for a simplification as most sustainability criteria were already reflected in existing legislation such the EU’s Renewables Directive and Water Framework Directive.
“The Taxonomy Regulation should not be an instrument to put constraints on the future financing of renewable and flexible hydropower,” Norway said, adding hydropower was capital intensive and required periodic reinvestments.
The country’s flexible hydropower reserves also played an important role in balancing other renewable intermittent energy sources in European electricity markets, the ministry said.
Norwegian industry lobby Energi Norge warned earlier in December that the current criteria could cut access to risk capital for future hydropower investments and risked higher costs of lending.
Norway also requested clarification on criteria for hydrogen and carbon capture and storage, which it hopes will provide new business opportunities for its oil and gas industry.