Norway’s energy problems do not stem from dependence on Russian gas. Its abundance of plateaus, natural lakes and fjords has allowed it to generate almost all of its electricity through hydropower for decades, supported by small amounts of gas and wind power.
It is also the world’s third largest natural gas exporter, behind only Russia and Qatar, leading some to describe Norway as the “battery of Europe”.
Now, however, as Europe faces an energy crisis in the wake of Putin’s invasion, foreign demand for Norway’s power is taking a toll on its consumers.
“Norway will be first”
As electricity export prices rise, so do domestic tariffs – to record levels this summer. Morten Frisch, a UK-based Norwegian energy consultant, says prices this year have typically been 10 to 20 times higher than in the past, adding: “This is not something people can afford to pay.” . The problem exacerbates regional disparities because most of Norway’s connections are in the south. While electricity can cost €2 per megawatt (£1.69) for households in northern regions, prices in south-west Norway can be €550 per megawatt, according to Frisch. However, tolls for Norway are not just financial. It relies on reservoirs to power its hydroelectric plants, which are mostly replenished by rain or snowmelt. After a drought during the spring and summer, reservoirs fell last month to a 20-year low of 46% capacity in the southwest. “This is not something you can just fill up at will,” explains Frisch. “When they dry out, they dry out and it’s likely to take at least three months, possibly six months, before they can be refilled by rain. For the government in Oslo, this has made the issue of foreign power exports all the more thorny. Some activists have called for Norway to cut itself off from Europe. A Facebook group called Vi som krämer billige strøm (meaning “we who demand cheaper electricity”) has more than 600,000 members. Users are complaining about a “price transmission” spreading from countries such as Britain and Germany and are calling on Prime Minister Jonas Gahr Støre to take action. Støre argued that staying connected to Europe benefits Norway and means it can tap into foreign power if needed, telling newspaper Aftenposten: “There is reciprocity in this.” However, there is pressure to reconsider. The country’s parliament could be recalled as soon as this week to discuss new measures to tackle the crisis. Ministers discussed strengthening government support for consumers and raised the possibility of restrictions on electricity exports. Støre’s minority Labor government is currently supported by the center party and relies on opposition parties to pass laws. Last week, Terje Aasland, the minister of petroleum and energy, told the newspaper Verdens Gang that “concrete measures” were planned to “restrict exports when the degree of filling of hydroelectric water tanks is below a certain level. “When there is some water in the hydroelectric water reservoirs, Norway will be first.” It is likely to raise further questions for National Grid about whether Britain can rely on Norway. The Grid claims there will be plenty of electricity this winter, with a projected buffer capacity of four gigawatts, or 6.7pc. However, this is based on expectations that the UK can source 5.7 gigawatts of power from Europe, or around 10% of peak demand. This includes 1.4 gigawatts from Norway.
