Norway is contemplating severing its energy links with Europe due to a surge in domestic electricity costs. The proposal has sparked political debates that could influence the country’s energy policies and upcoming elections.
Outrage Over High Electricity Prices
Norwegian Energy Minister Terje Aasland expressed frustration, calling the situation an “absolutely sh*t situation,” as reported by the Financial Times. Current electricity prices in Norway are six times higher than the EU average, putting pressure on the government to protect local consumers.
In response, Norway’s ruling coalition parties are pledging to cut the power interconnectors with Denmark when the agreements are up for renewal in 2026. The smaller coalition partner, the Center Party, also seeks to renegotiate energy agreements with the UK and Germany.
Causes of Norway’s Energy Price Spike
Norway’s energy system primarily relies on hydropower. However, around 10% of the country’s electricity comes from wind power imported from Europe. Recently, a shortage of wind in Germany and the North Sea, combined with cold weather in Norway, caused EU energy prices to rise sharply, impacting Norwegian costs.
In Norway’s southern regions, electricity prices peaked at 13 kroner (€1.12) per kilowatt-hour, far exceeding the EU average of €0.1867 per kilowatt-hour. While southern and eastern regions faced extreme costs, western Norway saw milder increases, and northern Norway continued to benefit from cheaper hydropower.
Calls for Domestic Energy Prioritization
Many critics argue that Norway should ensure low domestic electricity prices before exporting surplus energy to Europe. For decades, the country maintained this policy, but recent price shocks have reignited calls to return to this approach.
Weather forecasts predict increased wind production in Europe, which may reduce electricity prices soon. However, the temporary relief hasn’t quelled the broader debate about Norway’s energy strategy.
Energy Costs Shape Political Debate
Electricity prices are becoming a central issue ahead of Norway’s next elections. Are Tomasgard, from the ruling Labour Party, announced that the government will not renew the power cables with Denmark. “It has gotten out of control, and we are going to take that control back,” he stated.
Norway’s hydropower is essential for European energy security, and the country is also Western Europe’s largest producer of oil and gas. Despite not being an EU member, Norway is a crucial energy partner for the bloc.
Potential Changes in Energy Agreements with the UK and Germany
The Center Party is advocating for renegotiating energy export terms with the UK and Germany. The proposal to end or revise these agreements will be a key topic at the Labour Party’s national convention in April 2025.
Norway’s decisions on energy exports could have significant repercussions for European electricity supplies and the nation’s energy independence.
