FT: The Norwegian government may close or limit electricity transmission connections to Central Europe

The Norwegians are tired of taking care of the electricity supply of Central Europe and Britain. The price of electricity rose in the NO2 price range of southernmost Norway on Thursday to its highest level since 2009. In the evening at 6 pm, electricity cost 90 cents per kilowatt hour without VAT.

In Norway, like in Finland, there has been a heated debate about the price of electricity for several years. Both Finland and Norway are connected to the Central European electricity market with transmission lines.

When, for example, there is a lull in Germany, or when there was a severe gas shortage in Germany three years ago, the price of electricity rises to heights in the Nordic countries as well.

Export restrictions were seriously considered two years ago, for example.

Thursday economic magazine Financial Times said that the Norwegian government is also now leaning towards limiting transmission connections. Minister of Energy representing the Labor Party Terje Aasland said, according to the newspaper, on Thursday that the situation is “absolutely crap”.

The Labor Party would not renew the large transmission line between Norway and Denmark when it comes up for renewal in a couple of years.

The government’s partner, the Center Party, has long demanded the termination of Denmark’s transmission connections. It would also like to renegotiate the use of transmission connections to Britain and Germany.

In Norway, the electricity market is divided into five price ranges, while in Finland there is only one price range. Electricity is usually very cheap in northern Norway, but significantly more expensive in the south.

The majority of Norway’s electricity production is held by the public sector. The state compensates consumers for expensive prices. The state pays 90 percent of the price exceeding a certain limit.

ME:n Norway’s plans would be a big blow to the common electricity market. Norway has a lot of low-emission and adjustable hydropower, whose ability to adjust will benefit the whole of Europe, including Finland.

Norway does not belong to the EU, but to the European Economic Area (EEA). If Norway really decided to reduce transmission connections to the rest of Europe, the price of electricity in Finland could also decrease, because electricity is often available from Norway at a very affordable price.

In practice, Norwegian hydroelectricity travels to Finland via Northern Sweden every day to balance the Finnish electricity system.

Correction 14.12. at 3:20 p.m.: The article previously read that the Norwegian state practically owns the entire electricity production. It is about the fact that the majority of Norway’s electricity production is held by the public sector.

Correction 14.12. 11:44 a.m.: The article previously incorrectly stated that there are four price ranges for electricity in Finland. In reality, there is only one region.