Heavy accusations from a billionaire about the European electricity market – Norway is considering limiting electricity exports

In Norway, there has already been a fierce debate going on for a long time about whether the country should limit its electricity exports to Germany and Britain.

The reason for the debate is the occasional high electricity prices and price spikes in the country, which is exceptionally energy-rich thanks to its oil and natural gas reserves. Electricity in Norway is mainly produced by hydropower.

The price spikes in electricity have been explained by the fact that the expensive prices in the neighboring countries of Germany and Great Britain raise prices in Norway as well.

Norwegian politicians blame Germany in particular for the country’s poor handling of its energy policy.

Connections lost or restrictions

The solution found in the Norwegian discussions is that the undersea electric cables leaving the country will be left unrepaired and the connections to foreign countries would thus be cut off.

17 electric cables leave Norway to the rest of Europe.

This has been demanded by local politicians and recently also by a major investor Øystein Stray Leprosy.

He says In an interview with Dagbaldet Borsen magazinethat the price spikes in Norway are due to electricity traders in Denmark, Germany and other parts of Europe speculating on the price of electricity.

According to him, speculators agree to buy a lot of electricity in a certain time, when the price will rise. After that, they sell the electricity at a high price.

According to the Norwegian billionaire, Norwegian electricity traders are not speculating, but the culprits can be found abroad. He would limit exports when electricity costs more than 50 øres per kilowatt hour.

The accusation is of course heavy, because it would mean big structural problems in the European electricity market.

The power analyst warns of the consequences

Now, however, a Norwegian analyst warns that the disconnection of electricity connections will lead to an increase in the price of electricity and an ever-increasing fluctuation of prices in Norway.

This would happen in those dry years and months when there is little rain and the country’s own water reserves are not filled. In Norway, the weather varies drastically and the electricity situation in the country is dependent on the weather.

Electricity consumption in the country is also expected to rise in the next few years.

“Norwegians are buying more electric cars, the oil and gas sector is being electrified and we are building data centers to facilitate the development of artificial intelligence,” says a power analyst at Volue Insight Tor Reier Lilleholt In an interview with E24 magazine.

He warns that without electricity cables, Norway would even face moments when electricity would not be available at all.

Zero prices, which are becoming more common, reduce investors’ interest in building more electricity production.

In Norway, in 2023, the electricity price committee found out how to maintain a low level of electricity prices in the country.

At least it did not propose that Norway cut off electricity connections to other countries as a solution, but politicians still consider the idea warm.