Amid skyrocketing electricity costs, Norway is considering limiting its energy exports to Europe. The proposal has ignited political debate and could impact both national policies and European energy markets.
Outrage Over Rising Electricity Costs
Norwegian Energy Minister Terje Aasland described the situation as “an absolutely sh*t situation,” as reported by the Financial Times. Currently, electricity prices in Norway are six times higher than the EU average, causing significant frustration among citizens.
In response, Norway’s ruling coalition plans to cut power links with Denmark when their contracts come up for renewal in 2026. The Center Party, a junior coalition partner, is also pushing to reassess energy agreements with the UK and Germany.
Why Are Electricity Prices So High?
Norway primarily relies on hydropower for electricity. However, around 10% of its energy comes from wind power imported from Europe. Recent low wind production in Germany and the North Sea, combined with cold weather in Norway, has driven EU electricity prices higher, affecting Norway as well.
In the southern parts of the country, prices soared to 13 kroner (€1.12) per kilowatt-hour, far above the EU average of €0.1867 per kilowatt-hour. In contrast, northern Norway, which benefits from abundant hydropower, continues to enjoy lower prices.
Calls to Protect Domestic Energy Supply
Critics argue that Norway should prioritize its own electricity needs before exporting power to Europe. This approach was standard practice for decades until recent energy shocks reignited the debate over Norway’s export policies.
Although forecasts predict that increased wind production in Europe will lower prices soon, the recent surge has intensified calls for change.
Energy Costs Set the Stage for Political Debate
With elections approaching, high electricity prices have become a central issue. The Labour Party announced plans to end the “Denmark cables” to regain control over domestic energy pricing. Are Tomasgard, a Labour Party official, stated, “It has gotten out of control, and we are going to take that control back.”
Revisiting Energy Deals with the UK and Germany
The Center Party is advocating for renegotiating energy export agreements with the UK and Germany. These proposals are expected to be discussed at the Labour Party’s national convention in April 2025.
Impact on Europe’s Energy Market
Norway, Western Europe’s largest oil and gas producer, is a key player in the region’s energy supply. Although not an EU member, Norway participates in the European single energy market and has crucial energy links with the continent.
If Norway proceeds with reducing energy exports, it could disrupt European electricity supplies and reshape the country’s energy policy for years to come.
