Wednesday, May 18

Rødt and Frp want a maximum price for electricity. It could give us a power crisis.

  • Sondre Hansmark

    Advisor in Civita

When Rødt and Frp in chorus shout “we have no electricity crisis, we have an electricity price crisis”, they are in many ways right about it, writes Civita adviser Sondre Hansmark.

Power systems are complex things. It does not tolerate ill-conceived solutions.

Debate
This is a debate post. Opinions in the text are at the writer’s expense.

Our water reservoirs have one this week degree of filling at 48.9 per cent against 67 per cent at the same time last year. This is the lowest level since 2011, when it fell as low as 18 percent in the spring.

If in 2011 we had had a maximum price for electricity of 50 øre, as Frp wants, or 35 øre, as Rødt wants, it may well be that Statnett would have had to initiate electricity rationing.

No unlimited item

Electricity is not an unlimited commodity, although many would like it to be right now. Electricity must be produced, and it requires input factors such as wind, solar, water, coal and gas. When there are few of these input factors available, ie that there is little wind or rain, or that the price of fossil fuels goes up, electricity becomes more expensive.

Electricity prices (and prices in general) are a signal to us consumers about how much is available in the market. If the prices are low, we have a lot. If the prices are high, we have little.

Rødt and Frp partly want to remove this important price signal, which says something about how much electricity is available out there. The result is not that there will be more electricity available (they can not conjure), but that consumers have no idea when we are emptying the water reservoirs.

If the prices are low, we have a lot. If the prices are high, we have little.

When the price of electricity does not exceed a certain level, regardless of how little water there is in the reservoirs, regardless of whether it means that we have to import animals and polluting gas power from the continent, it has consequences for security of supply.

Rhetoric does not fill the water reservoirs

When Rødt and Frp in chorus shout “we have no electricity crisis, we have an electricity price crisis”, they are in many ways right about that. Prices have been far too high, and the government has chosen to compensate in poorly targeted ways. But if we do as Rødt and Frp want, namely to set a maximum price for electricity and restrict the power exchange with other countries, then it will actually give us a power crisis.

Although the measures undoubtedly sound tempting, and make Rødt and Frp very popular among the many who are rightly frustrated by high electricity prices, they have a fundamental problem: Rhetoric does not fill up the water reservoirs.

In most outcomes against the high electricity prices, this perspective on scarcity is lacking. One can easily discuss how we should prevent equally high electricity prices in the future, but it will be too easy to take the access to power production out of the equation.

Mains in imbalance

The power market and the electricity grid must always be in balance for it to work. This means that as much electricity must always be produced as it is consumed. If we tell people to use electricity as before, even when there is little power available, then the power grid becomes unbalanced.

This problem can of course be solved by developing large quantities of new power production, but there is no political or popular acceptance for that. Then you are left with an energy account that does not go up.

Power systems are complex things. Like a fine-tuned watch with many gears. Such systems do not tolerate well-thought-out solutions. Then it can get dark. Literally.


Reference-www.aftenposten.no

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