Key information
- Norway’s energy minister has criticized soaring electricity prices, which are six times higher than the EU average.
- The ruling parties plan to campaign against the renewal of interconnections with Denmark and propose to review energy links with the United Kingdom and Europe.
- High electricity prices are expected to dominate political discussions ahead of next year’s elections in Norway.
Norwegian Energy Minister Terje Aasland criticized soaring electricity prices, six times higher than the EU average, calling the situation “absolutely shitty”. The statement comes as Norway’s ruling parties call for severing ties with European power grids.
The two main ruling parties plan to campaign against the renewal of interconnectors linking Norway and Denmark in 2026, as reported by the Financial Times. The coalition’s smallest party, the Center Party, also proposes reviewing energy ties with the UK and Europe. The campaign is largely driven by outrage over current electricity prices in Norway, which critics say should prioritize domestic needs before exporting its abundant hydropower resources.
Impact of European energy prices on Norway
Norway relies heavily on hydropower for its electricity generation, but around 10 percent comes from wind power, mainly from continental Europe. Recent weakness in wind generation in Germany and the North Sea, combined with cold temperatures in Norway, has amplified the impact of rising energy prices in the EU, causing a spillover effect in Norway. This has led to extreme price increases, reaching more than 13 crowns (1.12 euros) per kilowatt hour in the southernmost region of Norway during peak hours, compared to the EU average of 0. 1867 euro per KWh for the first half of 2024.
While eastern Norway also faces high prices, western Norway largely avoids the worst consequences and the north remains relatively unscathed due to its dependence on hydropower.
Government response and future plans
Prices are expected to decrease in the coming days. Weather forecasts suggest an increase in wind production across Europe this weekend, which is already translating into lower prices since Friday, according to Norwegian newspaper Nettavisen. However, these high costs have reignited debate over Norway’s willingness to share its electricity production capacity.
High electricity prices have been a source of discontent in Norway for several years, and the issue of exporting energy while facing price increases domestically is expected to dominate political discussions ahead of the elections. next year.
The ruling Labor Party has declared that it will not renew the “Denmark cables”, underscoring its desire to regain control of the situation. Norway’s abundant hydropower is a crucial source of electricity for other European countries and, as Western Europe’s largest oil and gas producer, it plays an important role in the energy market of the European Union, although it lies outside its borders.
Center Party Proposals
The Center Party, another ruling party, wants to renegotiate export conditions with the United Kingdom and Germany regarding Norwegian energy resources. The proposal will be discussed at the Labor Party’s national convention in April.
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