Headline: Soaring Power Prices Spark Calls to Cut Europe’s Electricity Lifelines
Subheading: Analyst warns of extreme consequences in dry years as Norway’s power exports come under scrutiny.
Byline: By [Your Name], Tech & Energy Reporter
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Article:
Power prices in Europe have soared, with single-hour prices hitting an all-time high of over 13 Norwegian kroner last week. Investors, including Norwegian billionaire Øystein Stray Spetalen, have reacted strongly, with Spetalen suggesting cuts to Norway’s underwater power cables exporting electricity to Europe.
However, strømanalytiker Tor Reier Lilleholt of Volue Insight warns of the risks associated with such a move, particularly in dry years. E24 spoke with Lilleholt about the potential consequences of cutting Norway’s 17 underwater cables, which export power to Europe.
Q: What would happen if all of Norway’s underwater cables were cut?
Lilleholt: Right now, it might not have a significant energy impact because we have plenty of water in our reservoirs, thanks to the wet year we’ve had. But we need to consider changes in the weather further ahead. Norway’s power production is 100% dependent on weather conditions – either hydropower or wind, and a bit of solar. So, we’re completely at the mercy of what comes from above.
Q: Isn’t Norway planning to build more renewable energy capacity?
Lilleholt: While we’re expecting power demand to increase in the coming years, due to factors like more electric vehicles, electrifying oil and gas sectors, and building data centers for AI development, it doesn’t look like we’ll be able to build enough new power plants, either onshore or offshore wind, in the coming years. So, the surplus of power will decrease.
In a normal weather year, it’ll be fine, but in a dry year, we won’t have enough power. It’s already happening in single hours today. It’ll be blackouts. It’s an extreme situation.
Q: How would power prices be affected?
Lilleholt: If you cut all the cables, Norway would be in what’s called ‘island mode,’ meaning power prices would fluctuate much more than they do now, between dry and wet years. While very low prices in wet years might not be desirable either, as producers might not invest in new power plants.
To mitigate this, producers could get subsidies to build unprofitable power plants. Alternatively, they could invest in energy storage solutions to balance out power production and demand better.
Q: What about strangling the foreign market instead of Norway?
Lilleholt: While cutting exports to Europe might decrease power prices in Norway, it won’t help with the fundamental challenges: We still won’t have enough power production for our needs in dry years, and we need to invest in new power plants and renewable energy projects to tackle that.
Callout Box:
- ** Øystein Stray Spetalen suggests cutting power exports when prices surpass 50 øre.
- ** Norway has 17 underwater power cables exporting electricity to Europe.
- ** Strømanalytiker Tor Reier Lilleholt warns of power shortages in dry years.
- ** Cutting exports might lead to more price fluctuations and could hinder new power plant investments.
