But do the people really want a Norwegian Brexit?
No to EU leader Einar Frogner lost the Acer case against the state in the Supreme Court on Monday. Photo: Martin Solhaug Standal / NTBPublished: Published:
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Comment This is a comment. Comments are written by BT’s commentators and editors, and express their own opinions and analyses.
On Monday, No lost to the EU against the state in the Supreme Court: Norway did not give away so much of the control over energy policy in 2018 that it meets the constitutional requirement of a three-quarters majority.
The outcome was as expected. Whole page EEA Agreement was adopted in 1992, the Storting has given more and more power to the EU without them having thought that the decision was far-reaching enough to require such a majority.
The Supreme Court relied on it, to put it simply.
There have been many demonstrations against Acer in recent years. Here from Torgalmenningen in 2018. Photo: Rune Sævig
Because most people have The Acer case was about the right to manage electricity prices without influence from other countries. In other words, have lower electricity prices.
But the free trade advocates, such as Høgre’s Nikolai Astrup, are right that the Acer decision in 2018 in itself has little to say for Norwegian electricity prices.
The problem lies far deeper: in the EEA Agreement itself, which is most profoundly about reducing trade barriers. Including trading with current.
But since access to affordable electricity is important for all EU countries, there are still many obstacles that need to be broken down. Not least, several power lines (and cables) are needed.
It takes time, and this is where the various “energy packages” for the EU come in.
For each package, it becomes more difficult for the nations to pursue their own policies, for example to ensure the industry’s competitive advantages. The logical endpoint is a stream market with a price.
But it is far yours.
The Supreme Court agreed with the state on Monday. Photo: Martin Solhaug Standal / NTB
For now, Norway can pursue a protectionist power policy, by building out more power without building more foreign cables. That is what the current government says they want to do.
More locked-in power, as it is called, is the only way to lower electricity prices in Norway in relation to our neighboring countries. There is little to be done with the cables that are there.
Unless someone wants to terminate the EEA agreement, then.
And here lies perhaps No to the EU’s real victory in the Acer case. Even though they lost, the verdict shows that the EEA agreement is the foundation for electricity exports.
Perhaps No to the EU will now get more people to join them in terminating the agreement, as the Center Party, SV, Rødt and the Industrial and Business Party already have in the party programme.
The question is whether high electricity prices really are so bad that it justifies such a radical move. Hardly.
70 percent of Norwegian exports go to the EU and Great Britain. Being shut out of the EU market at a time of increased protectionism is almost economic suicide.
One need look no further than Great Britain. Despite the fact that it is a much larger country with a larger domestic market, figures show and research that both value creation and investments have fallen sharply due to Brexit.
Norway needs the EU both as an export market and as protection against increasing protectionism in the rest of the world, not least from the USA and China.
And it gets worse when the oil runs out, and we become more dependent on other exports.
Government attorney Fredrik Sejersted was satisfied. Photo: Martin Solhaug Standal / NTB
That’s why it’s the best Norway can combine the development of new power generation with saying no to new overseas cables. Then we’ll see how long it lasts.
The logic of the EU’s free trade, both of goods and power, means that the competitive advantage of cheap power will disappear in the long term. It is not certain that Norway will in future be able to say no to the packages that will ensure this, and thus to more foreign cables.
In that case, it will be worst for power-intensive industry. Here, the state is unlikely to be allowed to compensate for more expensive electricity with subsidiary and other measures.
Ordinary households, on the other hand, can go a long way in shielding. In principle, the state can subsidize electricity as much as it wants, because it does not distort competition.
Power-intensive industry in Odda and elsewhere may have problems with higher electricity prices in the future. Photo: Fred Ivar Utsi Klemetsen
Norway already owns it an electricity subsidy that covers 90 per cent of the bill over 70 øre per kilowatt hours. There is nothing to prevent it being lowered, for example to 40 øre.
That people have to pay some of the price above that amount, like today, is wise. It gives people a reason to save when there is scarce electricity and prices are high.
One problem with even more generous current support is that it will cost.
In addition, people will have less reason to insulate their houses, install heat pumps and other measures to reduce consumption.
But such incentives should come gradually anyway. The problem since Russia invaded Ukraine is that the price increase came so suddenly that people had no chance to adapt their houses or their private finances.
And when interest rates and food prices rose simultaneously, there was a perfect storm against the current policy.
People have the right to be angry at the current shock, without being labeled as nationalist populists. That’s how it was by Oil and Energy Minister Terje Aasland last week.
He and the government should instead do what they can to mitigate the consequences for people and businesses.
The alternative, that the people turn against the EEA agreement, is far worse.
Published:
Published: November 1, 2023 4:29 p.m
2023-11-01 15:29:14
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