Prime Minister Jonas Gahr Støre and Oil and Energy Minister Terje Aasland presented their new management mechanism for power exports on Friday morning.
The aim of Støre’s move is to ensure that Norway does not end up in a situation where Norwegian water reservoirs are empty, and cannot supply us with electricity produced in Norway if it were necessary.
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The magazines were dangerously low in the summer and autumn, largely because Norwegian electricity producers exported too much electricity in the autumn and winter of 2021/2022, at the same time that southern Norway had a snow-poor winter and dry summer.
The EEA regulations make it difficult to limit the export of electricity, so the government’s move is therefore to regulate the production of electricity itself.
But the cost could be higher electricity prices for Norwegians, fears centre-party veteran and parliamentary representative Per Olaf Lundteigen (Sp).
– If you set requirements for the degree of filling in the water reservoirs without limiting exports, the price of electricity will only be even higher, says Lundteigen to Nettavisen.
Reduced power production will increase the need for imports, resulting in higher prices on average. Lundteigen believes that the current power grab is in poor harmony with the government’s own laws.
– The government’s Hurdal platform says that we must have competitive electricity prices that are stable, predictable and under national control to ensure security of supply. That is the government’s demanding task.
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– What should the government do?
– Inform Statnett that the export and import of electricity should, as a general rule, be net zero during the period when our hydropower reservoirs are at the median or lower level of filling. This is to ensure the security of electricity supply without having to use prices that are higher than in Germany as a means of action.
– My proposal for a solution is a positive answer to this, when combined with a general price reduction scheme for the electricity price above the state budget to, for example, 70 øre/kWh for households and businesses.
Will not intervene
Prime Minister Jonas Gahr Støre points out that it is security of supply that the government has in mind when designing the mechanism.
– Can you deny that this move could lead to increased electricity prices in Norway?
– Our aim is now to ensure the security of supply through political measures which ensure that the filling is at a level where we can have stable and low prices, says the Prime Minister to Nettavisen.
– My wish is that we avoid having to intervene because the companies take responsibility themselves and ensure proper filling. Safe and stable power supply, which we are now ordering with this political move, it must be at the bottom to have low and stable prices.
– But by reducing production, you have to import in certain phases, which on average will increase prices in certain phases. It may be true that the move will make electricity prices higher for most Norwegians?
– Norway is completely dependent on imports throughout the year. Even in a year where we have a power surplus, there are hours and days when we import. This is a fine-tuned system that works that way. It is absolutely crucial for Norwegian security of supply, but also for prices over time, that we can have exchanges with the countries around us, says the Prime Minister.
The government opens the mechanism to step in and limit exports if security of supply is threatened, and other measures do not work.
– How confident are you that the last step in the mechanism is within our obligations in the EEA regulations?
– I am absolutely sure of that.
Lundteigen and Frp’s solution
The Center Party’s Lundgeiten has previously been out with his view on stopping net energy exports when Norwegian hydropower reservoirs are below the median level. The Minister of Oil and Energy answered this through an answer to a written question from the Frp.
– If Norway is only to export power abroad when the Norwegian authorities want it, it will in practice mean that Norway is no longer part of the European power system, wrote Aasland.
Lund Teigen also got enough when the news came that the government’s latest electricity measure was to set up a committee to look at how to lower electricity prices. He called it all “too bad”, and called for stronger measures.
– Play for the Center Party
Nor is the FRP satisfied with the new mechanism.
– This is primarily a reporting regime, and if there is a full-scale crisis, some measures are possibly taken, says Marius Arion Nilsen, parliamentary representative from the FRP, to Nettavisen.
– This is just nonsense. It is a game for the gallery to silence the critics and pretend to do something. This is an awkward mechanism, says Nilsen.
To which the Prime Minister replies that he believes the FRP’s solution will be far more bureaucratic.
– I am against unnecessary bureaucracy. What this scheme sets out to do, in the first place, is to make the power companies aware of the responsibility they have. Then we have stepping stones in the direction of being able to intervene with concrete measures.
The FRP has previously agreed with Lundteigen, and has also advocated stopping exports when Norwegian water reservoirs are below the median level.
– Because then the producers have to run the power production completely differently to stay within. But if you get a limit that is lower, you can export exactly the same amount. It has the same problems as last winter, and the prices continue to be sky high, says Frps Nilsen.
– Here it is Ap and the EU supporters who have been successful, which gives the Center Party an empty victory. It’s just a show for the Center Party.
– Has no consequence now
– This is far too bad! A lot of noise for next to nothing. The “powerful measures” are not clear, is the verdict from energy policy spokesperson in Rødt, Sofie Marhaug.
The usual energy critic believes that the government takes too little control over the companies.
– Now they will start work on regulations and laws. It is mostly reporting, and legislating a vague responsibility. This is not taking control of the power companies and exports.
Marhaug points back to the summer of 2022, when large electricity exports contributed to a record low fill rate, followed by record prices in August.
– About a year ago, the companies drained the magazines for profit. Nevertheless, the government says that a lot needs to be done to intervene. And the arrangement has no consequence this winter.
