Lower power and electricity certificate prices in the Nordic region have made two wind power projects in Central Norway—with a combined capacity of 1 GW—unprofitable, Statkraft said in June as it announced it would scrap them.

Norway produces the bulk of its power from hydropower (Figure 3), but the country’s government has encouraged wind farm installations to help save water reserves for dry seasons. In 2012, Norway and neighboring Sweden made a pact to jointly develop renewable energy projects, including an estimated 6 GW of wind capacity across both countries.

3. Norway’s 2013 power mix (in MW). According to Norway’s statistics agency, the country’s total capacity in 2013 stood at 33,486 GW, most of which was hydropower. The agency also noted that operating profit from the power industry totaled $3.62 billion—about 10% higher than in 2012. Norway saw a 21% increase in wind power generation in 2013 compared to 2012, and a nearly 10% decrease in hydro production. Source: Statbank

But in 2013, while Norway had installed just 62 MW, Sweden added 677 MW. The country’s wind industry group says the difference has resulted from different depreciation rules that allow developers in Sweden to cover costs of wind within five years, compared to 12 to 15 years in Norway. Norway’s government in February floated a legal amendment that could increase the return.

But for Europe’s largest generator of renewable energy, Statkraft, more needs to be done. “The authorities have contributed by facilitating wind power development, for example through improving the depreciation rules. Unfortunately, the market development is such that it is still not commercially responsible to invest in these projects,” said President and CEO Christian Rynning-Tønnesen in June.

Statkraft estimated the Fosen and Snillfjord windfarms would produce 3.25 TWh annually, but their development would cost about $1.36 billion.

Sonal Patel is a POWER associate editor.