Production subsidy unpopular

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In lieu of the start of a Norwegian market for trade in green power certificates, government energy agency ENOVA is offering production subsidies for domestic sales of wind power in 2004. For projects started in the first six months of next year, the subsidy must have been applied for by September 1. For the second half of the year, applications must be in by December 15. ENOVA reports there have been few applications, since most producers are selling their power abroad, along with the green certificates attached to it.

"Although we hand out these limited subsidies, I think most producers, even those benefiting from the system, would rather see a fully functioning domestic green certificates market. At present many producers are happy to sell on the European market and we are keeping a close eye on what is happening in Sweden since the system was introduced earlier this year. The subsidies are only of a short term nature so a healthy and stable certificates market here would make much more sense. Producers are also aware that government subsidies cannot be relied upon in the long term and would rather seek a more dependable source of income for their project plans," says ENOVA's Magnar Førde.

The Norwegian government has asked various players in the Norwegian market to come up with proposals on how a green certificates system could be established. It wants a new system to be fully functioning by 2005, although much will depend on the reaction of industry and business to its proposals, as well as progress in Sweden, which is likely to be used as the model for the Norwegian industry.

Førde agrees with many observers in Norway that the full introduction of a green certificates system like that operating in Sweden is the most likely and logical way forward for the industry.

Recent statements from the Norwegian government have stressed the desire to improve electricity production from wind and a rash of project concessions have been handed out over the past few months, most notably to state utility Statkraft.

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