Head of Market Analysis
Head of Communications, Statnett
There are good reasons why swapping power may be beneficial to Norway over time.
This is the topic of discussion. Opinions expressed in the text are at the author’s expense.
NTNU Professor Anders Skonhoft posed to Statnett some questions to Aftenposten on January 14. We are happy to answer them.
Norway produces about 155 TWh in an average year and consumes about 140 TWh. A profit of about 15 TWh will end up in net exports. The two new cables to Germany and England do not increase net energy exports, but the exchange is spread to more countries than before.
We expect the two cables over time to affect Norwegian electricity prices by 3-4 øre/kWh, separately. This is the same expectation we had before.
The price effect is greater this year with a lot of rain, while in dry years there will generally be a higher price – but the effect of the price of cables will be less.
Now, however, energy prices are very high, in part due to higher prices for gas, coal and carbon dioxide2, Shutting down nuclear power, less European wind power, and less flow to Norwegian reservoirs. Then the price impact of the newer two cables will also be higher. However, the two cables are only a small part of the whole, and most of the price increase would have come without them.
Profit is good for us
Highly priced Norwegian energy exports provide increased profits to Norwegian energy producers, which are mainly publicly owned. Profits will benefit those of us who live here. At the same time, periods when there is a lot of wind energy provide many hours of cheap imports into Norway. Both provide social and economic benefits to Norway.
At the same time, electricity is becoming more expensive as prices are rising in the countries around us. This makes revenue greater for producers and the bill on consumers goes up. The amount of the amount will vary from year to year. Exactly this winter, it was necessary to take measures to ensure that the cost did not become too demanding for electricity customers. Over time, we expect much lower prices than now.
Bigger investments in renewable energy
Skonhoft asks about the climate impact of the cables. Exchange is necessary for the development of renewable energy that cannot be regulated. The opportunity to import energy from Norway when private renewable production is low means our neighbors dare to turn off coal power. The opportunity to export to Norway allows for better use of renewable energy, and can lead to greater investments in new renewable energy.
The opportunity to import energy from Norway when renewable energy production is low means our neighbors dare to turn off coal power
We have had exchanges with Denmark since the 1970s.
Without this possibility, it would have been difficult for the Danes to replace coal energy with wind energy. The same is true of our German and British trading partners, where cables contribute to the phasing out of fossil energy.
We understand that many people are finding it difficult to increase electricity prices right now. However, there are good reasons why swapping power may be beneficial to Norway over time. We need large amounts of new renewable energy in the future. It requires significant investments in both energy production and transmission, and exchanges between countries are important to achieve this.
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