The Finnish Wind Power Association (Suomen Tuulivoimayhdistys ry) statement
The Finnish Wind Power Association (Suomen Tuulivoimayhdistys ry) is grateful for the opportunity to give its written statement regarding the proposed resource rent tax on onshore wind power.
The proposal has been brought to the Finnish Wind Power Association’s attention by our members, who have addressed serious concerns that tax regulation in Norway is developing in an unpredictable and damaging direction, targeting especially international investments in wind farms. We would request that the proposed new tax is not implemented on existing wind farms.
We are concerned that the proposed legislation will result in bankruptcy of internationally owned wind farms. Such bankruptcy would harm the investments of a broad variety of investors, such as pension funds and other financing institutions, inevitably affecting private people as well. These investors are also investing in Finnish wind power, and we do not want their interest in investing in the industry to be damaged. The financial viability of a wind farm’s investment is calculated in detail before initiating the building process, and governmental fees and taxes have a great impact on the calculations. The Finnish Wind Power Association has spent a great deal of its efforts on protecting the interests of investments in Finland, and we find this kind of development very concerning. It has been impossible for existing wind farms to take into consideration the proposed new legislation and the impact thereof and if existing wind farms are to become subject to a permanent high tax, without appropriate compensation for the incurred losses, it will have a detrimental impact on the financial viability of the wind farms. There is a significant risk that the existing wind farms would be forced into bankruptcy and the suggested wording of the proposed legislation would de facto be expropriating existing, foreign owned, wind power investments in Norway.
We are worried that the proposed legislation may lead to a serious decrease in investments in wind farms not only in Norway, but that it may have ripple effects in other counties. We believe this is a dangerous example for other countries as well. We see this an unhealthy development in a time and age where there is a global consensus that everything must be done to increase the production of renewable, sustainable energy. Implementing unexpected, significant tax increases targeting wind farms will reduce the willingness to invest in Norway and we are concerned that this will have a negative impact on the Nordic wind industry as a whole. This would damage the reputation of the Nordics as a stable investment environment. We find it important that the Nordic markets have similar, predictable approaches to taxation and permitting, allowing for international investments and a sustainable development of wind power.
We believe that the proposed legislation would result in unintended consequences, including losses for the local communities. The Norwegian Minister of Finance Trygve Slagsvold Vedum has said that through the proposed new legislation the government wants a larger share of the value which is created from wind parks, to benefit local communities, municipalities and society as a whole. While this is generally a good way of encouraging wind power construction by allocating profits locally, we believe that the proposed tax will have the opposite effect. If the proposed legislation is implemented it will hinder future investments in Norway, decrease access to electricity and increase market prices. This would further lead to a situation where the local communities would lose a significant portion of benefits of wind farms in Norway. We hope that the legislation will be amended so that all the Nordic countries can be seen as a place for new investments in industry, where the electricity used for such industry is green and the investment environment is stable.
Anni Mikkonen, CEO, Finnish Wind Power Association, tel. +358 40 771 6114
The Finnish Wind Power Association (Suomen Tuulivoimayhdistys ry) is grateful for the opportunity to give its written statement regarding the proposed resource rent tax on onshore wind power.
The proposal has been brought to the Finnish Wind Power Association’s attention by our members, who have addressed serious concerns that tax regulation in Norway is developing in an unpredictable and damaging direction, targeting especially international investments in wind farms. We would request that the proposed new tax is not implemented on existing wind farms.
We are concerned that the proposed legislation will result in bankruptcy of internationally owned wind farms. Such bankruptcy would harm the investments of a broad variety of investors, such as pension funds and other financing institutions, inevitably affecting private people as well. These investors are also investing in Finnish wind power, and we do not want their interest in investing in the industry to be damaged. The financial viability of a wind farm’s investment is calculated in detail before initiating the building process, and governmental fees and taxes have a great impact on the calculations. The Finnish Wind Power Association has spent a great deal of its efforts on protecting the interests of investments in Finland, and we find this kind of development very concerning. It has been impossible for existing wind farms to take into consideration the proposed new legislation and the impact thereof and if existing wind farms are to become subject to a permanent high tax, without appropriate compensation for the incurred losses, it will have a detrimental impact on the financial viability of the wind farms. There is a significant risk that the existing wind farms would be forced into bankruptcy and the suggested wording of the proposed legislation would de facto be expropriating existing, foreign owned, wind power investments in Norway.
We are worried that the proposed legislation may lead to a serious decrease in investments in wind farms not only in Norway, but that it may have ripple effects in other counties. We believe this is a dangerous example for other countries as well. We see this an unhealthy development in a time and age where there is a global consensus that everything must be done to increase the production of renewable, sustainable energy. Implementing unexpected, significant tax increases targeting wind farms will reduce the willingness to invest in Norway and we are concerned that this will have a negative impact on the Nordic wind industry as a whole. This would damage the reputation of the Nordics as a stable investment environment. We find it important that the Nordic markets have similar, predictable approaches to taxation and permitting, allowing for international investments and a sustainable development of wind power.
We believe that the proposed legislation would result in unintended consequences, including losses for the local communities. The Norwegian Minister of Finance Trygve Slagsvold Vedum has said that through the proposed new legislation the government wants a larger share of the value which is created from wind parks, to benefit local communities, municipalities and society as a whole. While this is generally a good way of encouraging wind power construction by allocating profits locally, we believe that the proposed tax will have the opposite effect. If the proposed legislation is implemented it will hinder future investments in Norway, decrease access to electricity and increase market prices. This would further lead to a situation where the local communities would lose a significant portion of benefits of wind farms in Norway. We hope that the legislation will be amended so that all the Nordic countries can be seen as a place for new investments in industry, where the electricity used for such industry is green and the investment environment is stable.
Anni Mikkonen, CEO, Finnish Wind Power Association, tel. +358 40 771 6114