Title: Norway‘s Power Prices: Stable Now, But Future Depends on Infrastructure Expansion – Statkraft Direct
Norway’s power prices currently aren’t exceptionally high, according to Statkraft’s director, Birgitte Ringstad Vartdal. However, she warns that without significant infrastructure expansion, prices could rise in the long term.
Historical Perspective
Adjusting for inflation and currency exchange rates, Norway’s power prices aren’t significantly high compared to historical levels. Data from Norway’s power exchange, Nord Pool, shows that the average spot price in the most expensive region (NO2, covering parts of Vestlandet and Sørlandet) was 58.2 øre/kWh in 2022. In Oslo and Akershus (NO3), the average was 48.7 øre/kWh, and it was considerably lower in Nord-Norge (NO1) and Midt-Norge (NO4).
SSB’s statistics series, dating back to 2012, reveals prices ranging from a low of 20.1 øre/kWh (excl. taxes) in 2020 to a high of 149.6 øre/kWh in 2022. The average over this period is 51 øre/kWh, with an overall price increase of 38% during this time.
Price Projections
Vartdal expects power prices to decrease by 2025, with market projections ranging between 35-40 øre/kWh. However, she cautions that without investment in new power generation, prices could rise in the long term.
Statkraft’s Role
Statkraft plans massive investments in upgrading Norwegian hydropower plants, aiming to keep prices under control. "With efficiency upgrades, we can produce more energy during peak demand periods, which helps to dampen prices during the most expensive hours," Vartdal explains.
She also emphasizes the importance of developing wind power, both onshore and offshore, as a crucial addition to Norway’s energy mix. "We’re currently utilizing water resources well, so new energy will mainly come from wind power," she says.
Challenges and Future Outlook
While Statkraft works to expand its power generation capacity, it will take time before new wind power projects come online. The earliest completion is expected around the late 2020s, with most projects likely to be finished in the 2030s.
Looking ahead, Vartdal believes that the increasing electrification of industries and the potential expansion of renewables on the European continent could help maintain stable or even decrease power prices. However, this depends on successful development and implementation of new power generation projects in Norway.
