NORWAY: An introduction to Energy: Renewables

Norway: Energy – Renewables Overview

Norway continues to be a global leader in renewable energy, with nearly all domestic electricity production derived from renewable sources. Hydropower remains the backbone of the system, but the country is steadily diversifying into wind and solar energy.

Hydropower

Hydropower accounts for around 90% of Norway’s electricity production and operates under a mature legal regime. Large-scale hydropower is largely publicly owned, governed by statutory rules such as the Waterfall Rights Act and the Watercourse Regulation Act. These laws ensure long-term state control through mechanisms like reversion, which mandates that ownership of major installations reverts to the state after the concession period.

Many older concessions are now subject to environmental concession revisions, which may impose stricter water flow requirements or new mitigation measures. Although operators can participate in the review process, they lack a statutory right to compensation for lost production, introducing legal uncertainty and potential financial risk.

Taxation has also become a concern. Following the electricity price surge in 2022–2023, the government introduced a high price contribution levy on hydropower and wind revenues. Although adjustments have been made, the unpredictability of tax policy has led to a more cautious investment climate.

Small-scale hydropower has slowed due to stricter environmental requirements, grid connection challenges, and the expiration of financial incentives. While exempt from ground rent tax, developers remain wary of future regulatory changes.

Wind power

Onshore wind remains Norway’s largest wind energy source, with over 5 GW of installed capacity. However, development has slowed significantly due to public opposition and regulatory changes. Since 2023, all onshore wind projects must be approved through municipal zoning plans before receiving a license under the Energy Act. This effectively gives municipalities veto power, allowing them to halt projects early in the planning process.

While the reform aims to enhance local engagement and trust, it has also created a bottleneck for new developments. The government now encourages regional and inter-municipal planning to balance land use and streamline environmental assessments.

Offshore wind is gaining momentum. The 2024 auction of the Sørlige Nordsjø II area marked Norway’s first large-scale offshore wind tender, signaling a shift from pilot projects to commercial deployment. Utsira Nord, designated for floating wind, faced delays due to state aid concerns, but was approved by the ESA in April 2025. Norway aims to allocate areas for 30 GW of offshore wind by 2040, leveraging its offshore oil and gas expertise to support cross-sector partnerships.

The legal framework for offshore wind is governed by the Offshore Energy Act, with licensing handled by the Ministry of Energy, supported by NVE and the Norwegian Offshore Directorate. Efforts are underway to streamline procedures and improve inter-agency coordination

Solar power

By the end of 2024, Norway had over 767 MW of installed solar capacity, mostly in rooftop systems. Solar power currently accounts for less than 1% of Norway’s total electricity production. The government has set a target of 8 TWh of annual solar power production by 2030.

From July 2025, solar installations under 10 MW will no longer require a license from NVE under the Energy Act. Instead, these projects will be handled by municipalities under the Planning and Building Act. This change is intended to simplify the licensing process, reduce administrative workload at the national level, and give municipalities greater responsibility for local energy development.

The government has also proposed removing the provision that allowed state-issued solar licenses to function as national land-use plans. This effectively gives municipalities a formal veto over ground-mounted solar projects, aligning the legal framework with that introduced for onshore wind in 2023. Although the state planning mechanism had not been used in practice, the amendment reinforces the requirement for local approval.

As with onshore wind, increased municipal control has led to delays and uncertainty, especially for ground-mounted projects in undeveloped areas. Developers now face more complex land-use evaluations and a higher risk of rejection due to local opposition or environmental concerns.

Electricity trading

Norway’s electricity market is fully integrated with the Nordic and broader European systems. Trading occurs through Nord Pool (physical) and Nasdaq Commodities (financial), under a legal framework that incorporates EU rules via the EEA Agreement.

While the legal foundation is stable, implementation of the EU’s Clean Energy for All Europeans Package (CEP) remains politically sensitive. Debate continues over the role of EU institutions, such as ACER, and implications for national energy sovereignty. CEP, the Fourth Energy Package, has not yet been incorporated into the EEA Agreement.Political discussions in Norway remain ongoing, with concerns over delegation of authority to EU institutions and potential impacts on national energy policy. As a result, the timeline for implementation remains uncertain.

Grid infrastructure

Grid access is one of the most significant bottlenecks for renewable energy deployment in Norway. The existing infrastructure is struggling to accommodate growing demand, with many regions operating at full capacity. Developers face long queues for grid connection, and even technically and financially viable projects are delayed due to transmission constraints.

The grid is structured across three levels:

• Statnett (Transmission System Operator) manages the national transmission grid.
• Regional grid operators handle mid-level infrastructure.
• Local DSOs (Distribution System Operators), typically municipally owned, manage local connections.

All operators are subject to the Energy Act and the Regulation on Grid Regulation and the Energy Market, which mandate non-discriminatory access. A major reform in 2025 introduced mandatory maturity assessments for all grid connection requests exceeding 1 MW. Projects must demonstrate readiness across standardised criteria, such as permitting status, financing, and technical planning before securing capacity or a place in the queue. These rules apply retroactively, requiring older projects to submit documentation or risk losing their reservation. Developers must maintain progress to retain their queue position, and grid operators are authorized to withdraw capacity if maturity criteria are no longer met.

To accelerate deployment, the government promotes “connection on terms” agreements, which allow temporary grid access under specific limitations. This model is particularly useful for flexible-output projects like solar or hybrid systems, enabling earlier integration while awaiting permanent upgrades.

Statnett has also been appointed as the TSO for offshore grid infrastructure, with costs to be borne by project licensees rather than onshore consumers. This marks a strategic shift as Norway expands its offshore wind ambitions and aligns with broader European energy goals.

Outlook

At the national level, energy policy remains focused on renewable energy sources, such as hydropower, wind, and solar. In addition, Norway is reassessing nuclear power, and a government-commissioned committee will report in April 2026 on feasibility, safety, cost, and impact.

Norway’s renewable energy sector is shaped by a combination of local governance, European market integration, and evolving regulatory frameworks. Municipalities now play a central role in approving wind and solar projects, which has increased local engagement but also introduced more uncertainty and longer timelines for developers.

Developers must also navigate ongoing changes in EU energy legislation, particularly the Clean Energy Package, which continues to influence Norwegian regulation through the EEA Agreement.

Despite these challenges, Norway remains a highly attractive market for renewable energy investment. Its abundant natural resources, strong institutional framework, and commitment to climate goals provide a solid foundation. Long-term success, however, will depend on how well developers adapt to a more fragmented but strategically focused policy environment.