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However, data centers that operate with cryptocurrencies are free from electricity taxes. – It is unfortunate with a Norwegian rule that creates uncertainty and prevents the establishment of data centers in Norway, says the Minister for Digitization.
District and Digitization Minister Linda Hofstad Helleland (H).
Terje Bendiksby
published:,
The government is proposing that crypto data centers be allowed to release the full electricity tax.
Computer centers in Norway received a reduced electricity tax starting in 2016, but in 2018 the Storting imposed a full electricity tax on data centers operating on blockchain technology. The government now believes it gave an unfortunate signal to the industry about Norwegian framework conditions.
District and Digitization Minister Linda Hofstad Helleland (H) says she has been listening to the industry.
– In the revised national budget, we propose to repeal the Storting’s decision to introduce the full electricity tax to data centers operating with cryptocurrencies, Helleland told E24.
– I have received many comments that the data center industry has a strong interest in investing in Norway. It is attractive to settle in Norway, with wide access to clean energy. But then the industry must have predictable framework conditions. This means jobs in the Norwegian District, and then we must take steps to remove uncertainty about framework conditions, says Helleland.
Made exceptions for cryptocurrency
Starting in 2016, the government reduced the electricity rate for all data centers above a certain capacity (0.5 megawatts), to make Norway a more attractive place to establish such activities.
The proposal meant that data centers should be treated as an energy intensive industry. While regular customers pay a rate of SEK 16.13 per kilowatt hour for energy delivery, the industry pays a reduced rate of 0.505 øre per kilowatt hour.
However, the grip received a mixed reception. The Labor Party and the Center Party feared that it would be too attractive to use the pure power of Norway for the intensive recovery of cryptocurrencies like Bitcoin.
In 2018, the government decided that data centers operating with cryptocurrencies still have to pay the full electricity tax, after an agreement between KrF and government parties Frp, right and left.
– It is unfortunate
Subsequently, Abelia and ICT Norway gave clear signals that the imposition of different rates in different data centers would weaken Norway’s ability to attract investments in data centers.
Statkraft also considered that it would be difficult to enforce the proposal.
Lund & Co’s law firm Deloitte and Per Andreas Bjørgan questioned whether Norway’s approach could be illegal discrimination, in investigations they conducted for Tydal Municipality and data center actor Kryptovault, respectively.
– Was it an unfortunate case?
– Yes, I mean. It is unfortunate that a Norwegian special rule creates uncertainty and prevents the establishment of data centers in Norway, says Helleland.
– Many countries want that establishment, with value creation and associated jobs. If this proposal is adopted, it is an important sign that we have listened to the industry and that data centers are welcome in Norway, he adds.
Abelia applauds: – Very happy
The NHO Abelia Association is pleased that the government is now reducing the total electricity tax for crypto data centers.
“In the rise of a green data center industry, the parliamentary decision on maintaining the electricity tax in data centers that also mine cryptocurrencies has been an obstacle to predictability and growth for non-gamers as well those who mine cryptocurrency, “says CEO Øystein Eriksen Søreide at Abelia.
He believes the plan has been badly viewed and has been unfortunate for the industry. The government has done a thorough job on the government apparatus after the unfortunate decision, he notes.
– It is very gratifying that they now propose to discard this, says Søreide.
– Here the government has understood it. Lately, people have joined the race to become a data center nation. This contributes to a gear shift and Norway takes over the main group, he adds.
– Trust is restored
ICT Norway is also satisfied with the decision.
– Confidence in Norway has been restored as a stable, safe and predictable country to invest in, says ICT-Norway’s director of industrial policy Liv Freihow.
The organization believes that uncertainty about different rates depending on what the data center operates has remained a fog throughout the industry since it arrived in 2018.
– Here the rational arguments have arisen. We are relieved and pleased that it becomes clear again that Norway is one of the most attractive countries in the world to build data centers, “says Freihow.
– Without sense
In 2018, it was planned to use a series of centers for the highly demanding “recovery” of cryptocurrencies like bitcoin. Said recovery is carried out by means of advanced calculation operations.
Many were skeptical about it, as it could also create the need for large and expensive upgrades to Norway’s power grid to guarantee enough power for everyone.
– I think there is no point in spending millions on sponsoring the cryptocurrency recovery, which is resource intensive and creates relatively few jobs, Storting representative Sigbjørn Gjelsvik (Sp) told E24 in 2018.
Parliamentary representative Espen Barth Eide (Ap) also expressed concern that Norwegian subsidies should provide cheap energy for the recovery of the cryptocurrency.
Helleland says it is poised for criticism from those who believe the cryptocurrency is wasting power, when cryptocurrencies can again benefit from low fees.
– It’ll probably come, and I’ll stay on it. Here, there are several considerations that need to be weighed against each other, and we’ve fallen for the fact that facilitating the establishment of data centers in Norway is very important, he says.
– Disasters
Norwegian data centers worried about investments in the industry after the government changed the rules out of the blue. Swedish players, on the other hand, were satisfied with less competition from Norway.
Several Norwegian players claimed that the decision to introduce the full electricity tax for cryptocurrencies led to the fall of several plans for bigger data centers in Norway.
The Kryptovault company referred to the decision in 2018 as a scandal.
– This gives a terribly poor signal abroad to invest in Norway. This is something that is believed to happen in Latin America, it is not something that we expect to happen in a civilized country, Kryptovault spokesman Gjermund Hagesæther told E24 in 2018.
Read E24 articles on total cryptocurrency electricity tax:
