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PR(05)12: EFTA Surveillance Authority opens formal investigation on the Norwegian Energy Fund system

18.5.2005

Today, the EFTA Surveillance Authority opened a formal investigation procedure with regard to the Norwegian Energy Fund operated by Enova.

In June 2003, the Norwegian authorities notified the Authority of the Energy Fund system, by which the Norwegian State grants support for the production of renewable energy, for energy saving measures and for new energy technologies. The State further supports advisory and consultancy services in the field of energy efficiency and in the past was involved in various information and education programmes on energy efficiency. However, some of the measures came to an end in early 2004. The Fund is administered by Enova, which is owned by the Norwegian State via the Ministry of Petroleum and Energy. The Fund’s budget is based on allocations from the State budget and partially financed by a levy on the distribution tariff for electricity.

The Authority has doubts whether the system, which was implemented before the notification of the scheme to the Authority, complies in all respects with the state aid provisions of the EEA Agreement, and in particular with the Authority’s guidelines on aid for environmental protection. In this respect the Authority has, in particular, doubts about    whether the subsidies for energy saving measures and the production of renewable energy do not result in overcompensation when compared to the production of energy from conventional fossil fuel plants. According to the Authority’s guidelines, only the extra investment costs of renewable energy production and energy saving measures can be supported.

The Norwegian Government has offered to make certain changes to the system to bring the scheme in line with the State aid provisions. The Authority will establish, during the formal investigation procedure, whether these amendments are sufficient to dispel the Authority’s concern on the future application of the system and will also assess the application of the system without these amendments in the past.

The Authority’s decision to initiate a formal investigation procedure will be published in the Official Journal of the European Union and the EEA Supplement thereto and interested parties will be invited to submit their comments within one month of publication.

For further information, please contact Mr. Amund Utne, Director, Competition and State Aid Directorate, tel. (+32)(0)2 286 18 51 or Ms. Annette Kliemann, Senior Officer, Competition and State Aid Directorate, tel. (+32)(0) 2 286 18 80.

18 May 2005




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