Norway is contemplating a significant shift in its energy policy as high domestic electricity prices fuel discontent among citizens and government officials. Energy Minister Terje Aasland described the current situation as “outrageous,” with prices in some regions of Norway soaring to six times the EU average. The issue has reignited debates over the country’s energy exports to Europe and is poised to dominate political discussions ahead of next year’s elections.
Norway generates the majority of its electricity from hydropower, supplemented by wind power imported from continental Europe. However, a combination of low wind output in Germany and the North Sea, coupled with unusually cold weather, has driven up EU power prices. These price shocks have spilled over into Norway, particularly in the southern and eastern regions, where electricity costs reached over 13 kroner (€1.12) per kilowatt-hour during peak hours. By contrast, northern Norway, which benefits directly from abundant hydropower, has maintained low electricity costs.
For comparison, the EU average electricity price in the first half of 2024 was €0.1867 per kilowatt-hour, highlighting the disparity.
The ruling Labor Party and its smaller coalition partner, the Center Party, have pledged to campaign against the renewal of two power interconnectors with Denmark, which are due for review in 2026. The Center Party is also pushing for a renegotiation of energy export terms with the UK and Germany.
“We cannot continue this way. It has gotten out of control. And we are going to take that control back again,” said Are Tomasgard of the Labor Party, as reported by Norwegian media outlet bt.no. The proposal to abandon these energy links will be discussed at the Labour Party’s national convention in April.
Critics argue that Norway should prioritize domestic energy needs and ensure low prices at home before exporting electricity. For decades, Norway’s abundant hydropower allowed for affordable domestic electricity while contributing to Europe’s energy supply.
Norway is a key energy supplier to Europe, both as Western Europe’s largest petroleum and gas producer and as a significant provider of hydropower. While not an EU member, Norway participates in single-market initiatives, including electricity interconnection agreements. These links have allowed the country to play a crucial role in stabilizing European energy markets, particularly during crises like the Russia-Ukraine conflict.
High electricity prices have been a contentious issue in Norway for years, and the government’s energy policies are likely to shape the outcome of next year’s elections. The Labour Party’s pledge to sever ties with Denmark, coupled with the Center Party’s push to renegotiate terms with the UK and Germany, signals a shift toward greater energy independence.
The proposal has sparked debate about balancing domestic affordability with international obligations. Critics warn that scrapping energy interconnectors could disrupt regional energy stability and harm Norway’s reputation as a reliable energy partner.
While weather forecasts suggest that electricity prices may drop as wind production picks up in Europe, the current crisis has already reignited public and political debates about Norway’s energy exports. The government’s decisions on interconnectors and export agreements will have lasting implications for both domestic consumers and Norway’s role in Europe’s energy landscape.
