Norway is setting up a 20 billion Norwegian crowns ($3.24 billion) fund to promote renewable energy

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Norway Sets Up $3.2 Billion Clean Energy Fund

OSLO - Norway is setting up a 20 billion Norwegian crowns ($3.24 billion) fund to promote renewable energy such as wind and hydropower while spurring energy savings, the government said on Monday.

It said the cash would help Norway achieve a goal of raising available power by 30 terawatt hours (TWh) by 2016, compared with 2001, from alternative energy sources and by greater efficiency. Its previous goal was a saving of 12 TWh by 2010 versus 2001.

Norway's total power output, mostly from hydropower, is about 120 TWh a year.

"Bioenergy, windpower, hydropower, and energy efficiency will contribute to new possibilities, new jobs and new optimism over the whole country," Oil and Energy Minister Odd Roger Enoksen said in a statement.

The fund would be managed by state energy firm Enova.

Under the scheme, Enova would strengthen infrastructure for district heating, stimulate energy efficiency and renewable energy in households and set up a deposit scheme to encourage scrapping of oil boilers.

Norway needs to promote alternative energy use partly because its emissions of heat-trapping carbon dioxide, mainly from burning oil, were far above target and about 9 percent above 1990 levels in 2005.

Under the UN's Kyoto Protocol on curbing global warming, Norway has to limit any rise in emissions to no more than one percent by 2008-2012 compared to 1990 levels.

That goal is hard to reach because fossil fuel use is rising in Norway, the number three oil exporter behind Saudi Arabia and Russia. Norway generates almost all its energy from hydropower and has few rivers left to dam.

Under the new scheme, about 10 billion crowns would be put into the fund from January 2007 through the government's annual budget, and another 10 billion from January 2009.