edited and translated from original in Norwegian by Bård Ole Thorsen
Unique to Norway is that we produce 98% of all our electricity from renewable energy; hydropower.
That is an incredible amount of energy. Clean energy as such. In a global context, only 6 countries in the world produce more hydropower than Norway and Norway also punches way beyond its size when it comes to installed capacity. We have more than enough electricity from renewables. In fact, we produce so much electricity that Norway is the country in Europe that exports the most electricity. WE HAVE power for these cold winters, ACTUALLY. But when we sell the electricity in the summer (read drain the water sources that can be used in the winter for export), then there is a deficit here in Norway in the winter.
Nevertheless, it is only autumn and we experience that we “lack power” and thus see record-high prices in several parts of the country. How can this be? We need to look at history.
In the early 1900s, it was a rapid development of hydropower plants around the country. This electricity production became a hub in settlements and cities. Often because the industry, for example, aluminum production, needed a lot of electricity, and it was natural to lay these close to the hydropower plants. This created many jobs. The population got both jobs, but also cheap electricity for their houses for heating, etc.
Compared to our neighboring Sweden, they are not used to “electric heating” as here in Norway. This is because electricity was costly in Sweden – as opposed to here in Norway, where electricity became very cheap.
Electricity was seen as infrastructure, like water, sewage, waste disposal, and road networks. Electricity was something everyone had to have. Electricity was something that people had to have for the “wheels” to turn. So electricity was not something anyone would make money on. Just like now, there is no one to profit from the water that comes from the tap in our houses. What we pay in connection with water and sewage is maintenance etc. Our drinking water is not on “tender” or sold based on demand.
This cheap electricity meant that, despite the fact that wages in Norway were high, Norway, as an industrial country, was still competitive precisely because of the cheap electricity. Like when we extracted, for example, iron ore in the mountains – then we could refine it here and export a refined product to our international customers.
This was the case until 1991. The electricity produced was “the property of the whole nation.” The Norwegian population had paid dearly for the development through the tax slip and customer relations (consumption). It can be said that electricity production in Norway was built to gain a competitive advantage.
In 1989, we got a government consisting of the Conservatives, the Christian People’s Party, and the Center Party, led by Jan Peder Syse (Conservatives). Then electricity was turned into a market commodity through the liberalization of energy laws. Eivind Reiten was Minister of Petroleum and Energy (Center Party) and is described as the “father” of these legislative changes.
What did this change in the law mean in practice, and what does it have to do with current electricity prices?
With the change in the law, Norwegian power production was “privatized.” Now the power made was to be sold at the best price, such as the Grandiosa pizza, the snow drawer, or the new Nike sneakers. The price of electricity was to be regulated on demand. That is when you have high demand and high prices. Low demand means low price, just like the snow shovel. You get the best price in the winter and the worst price in the summer. This is logical. Stores have learned this and adapted their inventories to demand, such as winter/summer, etc.
With this change in the law, you also have the same mindset regarding electricity. Of course. Of course, those who sell electricity will make as much money as possible. But what happens to us as consumers? Yes, we have to pay dearly for electricity when we need it most, but it is also the cheapest when we need it least. This way, “the hydropower of the entire population” was stolen from the Norwegian people. Electricity became expensive, and industry and jobs were moved abroad. And with that, small communities began to die out. In 1994, Norway became part of the EEA. Thus, the EU’s energy directive was incorporated into the EEA agreement.
After various directives have been adopted in the Storting and incorporated into the EEA agreement, the ESA (EFTA Surveillance Authority) ensures Norway complies with the directives 100% and the EU’s laws. If Norway does not do what the EEA agreement commands – Norway can be convicted by the EFTA Court.
The EU has established its energy agency, Acer, of which Norway became a member in 2018. The EU’s goal is a common European electricity market. Thus began massive planning and development of power cables for the EU, expenses charged to Norwegian customers through increased grid rent. The development of, for example, wind turbines is not electricity that we in Norway need. In addition, extra power grids are now being built for wind turbines to go to households in Norway.
In other words, clean, renewable energy from hydropower is sold abroad. In contrast, the dirty unstable wind power is sold here, in addition to the fact that we have to import electricity from the continent, which we as a population have to pay dearly. You and I have to pay for the power grid built today. Therefore, we have to pay again for something that our ancestors paid for us in the past and that we should enjoy in the future.
I would add that it costs 5 – 12 øre to produce 1 kWh. As a customer, you pay an average of 100 øre per kWh plus grid rent. That is, there is a 95 øre or 2000% surcharge on the item for you as a customer.