An announcement on Monday that state power network operator Statnett has won approval to build new electricity cables to Germany and the UK means electricity prices in Norway are likely to rise, according to analysts. The government, however, thinks the new undersea cables will make better use of Norway’s power system.
Norway’s possibilities for exporting electricity will increase by around 50 percent when Statnett starts operating a cable from Tonstad in southern Norway to Wilster, Germany in 2018 and a cable from Kvildal in western Norway to Blyth, Great Britain in 2020. The connection to Great Britain will be the world’s longest undersea cable of this type.
Exporting more of Norway’s electricity abroad, however, is expected to lower supply available in Norway as demand rises, thereby raising local electricity prices. “The cable that goes to Great Britain in 2020 will have the biggest impact on prices,” power analyst Johan Olav Botnen of Markedskraft told state broadcaster NRK. Its export will be much larger than that to Germany, he said. Analyst John Brottemsmo of Bergen Energi also told NRK that “we can expect that the Nordic prices will rise,” but he claimed the rise wouldn’t be dramatic.
Oil and Energy Minister Tord Lien said that the cables will contribute to “value creation” of Norway’s power grid, and that the cables were “important” in order for Norway to succeed with new emphasis on increased production of renewable energy.
Statnett operates around 11,000 kilometers of high-voltage power lines and 150 power stations around Norway. Statnett is also responsible for connections to Sweden, Finland, Russia, Denmark and the Netherlands. It is officially owned by the government Ministry of Petroleum and Energy.