Head of market analysis
Head of Communications, Statnett
There are good reasons why the exchange of power is useful for Norway over time.
This is a debate post. Opinions in the text are at the writer’s expense.
Professor at NTNU Anders Skonhoft asks Statnett some questions to Aftenposten on 14 January. We are happy to answer them.
Norway produces around 155 TWh in a normal year and has a consumption of around 140 TWh. A profit of around 15 TWh ends up in net exports. The two new cables to Germany and England do not increase net power exports, but the exchange is spread over more countries than before.
We expect that the two cables over time will affect Norwegian electricity prices by 3–4 øre / kWh, in isolation. This is the same expectation we have had before.
The price effect is greatest this year with a lot of precipitation, while in dry years there will be a higher price in general – but the price effect of the cables will be less.
Now, however, power prices are very high, partly due to high prices for gas, coal and CO2, closure of nuclear power, little European wind power and less inflow in Norwegian reservoirs. Then the price effect of the two newest cables will also be higher. Nevertheless, the two cables are only a small part of the whole, and most of the price increase would have come without them.
The profit benefits us
Norwegian power exports with high prices provide increased earnings for Norwegian power producers, which are mainly publicly owned. The profits will benefit us who live here. At the same time, periods with a lot of wind power provide many hours of cheap imports to Norway. Both provide socio-economic benefits for Norway.
At the same time, electricity is becoming more expensive in a situation with high prices in the countries around us. This makes revenues greater for producers and the bill higher for consumers. How much it amounts to will vary from year to year. Exactly this winter, measures have been necessary to ensure that the cost does not become too demanding for electricity customers. Over time, however, we expect significantly lower prices than now.
Larger investments in renewable energy
Skonhoft asks about the climate effect of the cables. Exchange is necessary to develop renewable energy that can not be regulated. The opportunity to import power from Norway when own renewable production is low means that our neighbors dare to shut down coal power. The opportunity to export to Norway provides better utilization of renewable energy, and it can trigger larger investments in new renewable energy.
The opportunity to import power from Norway when own renewable production is low, means that our neighbors dare to shut down coal power
We have had exchanges with Denmark since the 70s.
Without this possibility, it would have been more difficult for the Danes to replace coal power with wind power. The same is true for our German and British trading partners, where the cables contribute to the phasing out of fossil power.
We have a great understanding that many people experience the high electricity prices as challenging right now. Nevertheless, there are good reasons why the exchange of power is useful for Norway over time. We need large amounts of new renewable energy in the future. It requires large investments in both production and transmission of power, and exchanges between countries are important for realizing this.