Comment by tordrt
13 hours ago
Theres not going to be built any more interconnectors from Norway anytime soon.
Electricity became a lot more expensive in Norway after building several interconnectors to UK and mainland Europe. Importing high prices from the failed energy politics of UK and Germany which both have among the most expensive electricity in the world.
This has been a huge debate, and the general concensus seems to be that joining ACER and building inrerconnectors to mainland Europe was a big mistake.
Does that mean Norway is making a huge amount of money exporting electricity over those interconnections?
Yes. But that is money the consumers don't see.
About 90% of Norway's 40 GW energy production (mostly hydro) is state owned. By exporting energy and thereby getting other countries to pay, the money literally goes to the norwegian people. Not directly into their bank accounts, but into their govt budgets, which they later pay less in taxes.
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There are government subsidies for consumers to either have a fixed price or a price cap on electricity in Norway as a political response to the increase. This would be harder to pull off if not most of the profits from export didn’t land in the public sector (either taxes or government owned energy companies).
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> Importing high prices from the failed energy politics of UK
Remember that its a market, not the consumer price.
The spot price for UK electricity is still quite competitive in the winter, just not reliable.
The other thing to note is that peak in the UK is different to peak further up in longitude, which means that there is benefit to both countries for this.
That seems counterintuitive to me.
Electricity prices don't go up because you have access to expensive power, it goes up because you don't have enough cheap power so you have to buy the expensive power.
It seems like Norway just wouldn't have power if they weren't connected to other sources, not that they'd have more cheap power.
Electricity prices go up when you have access to customers who are willing to pay more. If grid connections to other regions are limited, people in regions with a lot of cheap generation (such as Norway) pay low prices. But if you add grid connections without increasing generation capacity, prices start equalizing between regions, as every power company tries to sell to the highest bidder.
Norway could power itself fully with domestic hydro. But it chose not to, as the power companies make more money by importing foreign power when it's cheap and exporting hydro when it's not.
Washington state has the same problem to a lesser degree. California pays more for cheap Washington hydro, which causes the costs to go up for us, although I guess not as drastic as Norway since our electricity is still considered cheap.
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> "Norway could power itself fully with domestic hydro." We have events where the we cannot get enough load from domestic production. Typically in winter when water freezes.
> It seems like Norway just wouldn't have power if they weren't connected to other sources, not that they'd have more cheap power.
This is not the case as Norway and neighbouring Sweden have plentiful hydro. It's especially valuable as it can be regulated to complement wind/solar fluctuations, essentially replacing storage.
Prices went up in norway because the uk had even higher prices than norway. Having these interconnections is good for producers in norway and consumers in Uk, but very bad for consumers in Norway
but they have enough cheap power
they have too much cheap power, so they decided to sell it. But the fact they have a buyer that buys for more than locals, means they do not longer have to sell to locals at low price.
Tho it being state owned make it weird, you'd think state would keep lower rates for the people
Obviously the presumably large amount of money spent to interconnect could have been spent adding local production and storage. It would be a waste of money if there was a reasonable path to local energy independence that was neglected.
A significant proportion of Norway's domestic energy production is hydro, which comes with it's own "built in" storage up to the capacity of the dams, so Norway already has a very significant storage capacity.
Estimates suggests a storage capacity of 87TWh of storage in hydro reservoirs, compared to production capacity in recent years between 146 and 157 TWh, and a theoretical production capacity of ~309TWh (I don't know the basis for that - I'd imagine peak production at all the plants, but I doubt that could ever happen in reality, so the 146-157TWh based on real production are better...)
Compare that to Norwegian electricity consumption of 124 TWh in 2020.
Of course, since so much of Norways total electricity production is hydro, large storage is necessary, as the hydro supply is highly seasonal, based on e.g. things like the amount of melting snow in the mountains in spring.
It’s basic supply and demand. And by linking to other grids, you increase demand since there’s now more customers for your supply. What they have (comparatively) less is supply since the supply in those markets is shite in comparison to what Sweden and Norway have for their local demand.