In Norway too, electricity prices are bananas

Yesterday, prices of electricity in the south of Norway reached NOK 3.26 per kilowatt hour, or around 0.33 euros. The website Norway Today described this price as « the second highest price level ever », the first one being a day in December 2021. Now that can surprise, knowing as Norway is a major electricity producer in Europe, but we are not spared the crisis hitting the rest of the world since the pandemic and the war in Ukraine.

It can seem surprising as Norway is the first power exporter in Europe, having surpassed France whose main source of energy is nuclear in the second half of 2020. The key to its success? Hydraulic power, which has always been the main source of energy in the country and that has increased recently because… it rains more! Instead of keeping this clean and expensive energy to make sure its citizens won’t lack of it, Norway has been exporting generous amounts mainly towards the Netherlands, Germany, Denmark, Sweden, and Finland.

Strong from a growing market, the previous government had made deals with different countries when it comes to a certain energy supply (it’s mainly valid for the oil and gas) for the years to come. When the Russian invasion of Ukraine started, prices of the European market in general have gone up, not sparing Norwegian citizens who could have benefitted from a cheaper access to their own national hydroelectricity! Prices are currently so volatile that fixed prices when it comes to individual consumption are to avoid, according to energy firm Lyse Energi’s product and business development director Kristian Helland for financial publication Dagens Næringsliv (DN).

People are in general quite angry to be a major producer of electricity and oil in Europe and be obliged to pay so much to access those ressources, while state-owned and private companies are currently making A LOT of money. Some of these contracts come from pre-agreed agreements Norway can’t get out from just yet, while some others are adjusted for benefits from the crisis. At the beginning of July, food prices have also suffered from a big adjustment upwards, and the change is very VERY visible.

I honestly think that Norway and its energy producers should consider its population, that has for now the capacities to adapt to such a world prices and resources crisis, but that might not be so patient on the long-run! For now, what is only being talked about is developing the green energy area with a focus on wind power so as to be able to provide more to the rest of Europe if the ban on Russian energy keeps on.