In a closed meeting in the Storting on 8 July 1946, Storting representative Olav Oksvik presented the Gerhardsen government’s proposal to let the power from the Tyin power plants go to Norsk Hydro’s aluminum plant in Årdal. The Conservative Party disagreed. They wanted to build transmission cables to the south, so that the electricity could be sold to the highest bidder. The Labor Party won the referendum, and the rest is, as they say, history. The power was to be used to build industry and export income for future generations. In 2021, the profit in Norsk Hydro was NOK 28 billion. Norwegian hydropower gave business a competitive advantage and Norwegian families affordable electricity. Build the country or send the power in transmission cables south. It sounds oddly familiar. Many of us were captivated by the vision that foreign cables would make Norway Europe’s “green battery”. In Energi Norge’s argument for the foreign cables, it is stated that these will “increase the value of Norwegian hydropower”. But there is only one thing that “increases the value of Norwegian hydropower”: That it is sold more expensively. Also in Norway. It is obvious that the interconnection between the electricity market in southern Norway and the continent affects the price. If the current flows freely, and the price at the other end of the cable is NOK 3, then the price at our end will also be NOK 3. If the price in Norway were to remain at 50 øre and the price in Europe was 3 kroner, all power would be sold out of the country. This is how the market works. But why do we only export 10 percent of our power, some ask. The reason is precisely that the price in southern Norway has increased in line with the price increase in Europe. We have had foreign cables for many years, but the capacity was very limited. Large-scale export was not possible, and prices were therefore different in Norway and in the rest of the world. That was the reason why this was not a topic when the EEA Agreement was drawn up. The cables were used for what they were supposed to be used for: security of supply and a reasonable exchange of electricity throughout the day. For many decades this worked well. What has changed the picture are the last two foreign cables which increased the export capacity by as much as 50 per cent. At NHO’s annual conference in 2013, Prime Minister Jens Stoltenberg said clearly: “I warn against the belief of the newly saved in a free release of power exports. It could weaken the Norwegian power balance and lead to higher prices, both for consumers and the power-intensive industry.” LO also warned that the cables would increase the price for Norwegian consumers. They were absolutely right. But then NHO manager Kristin Skogen Lund stood firm on the demand for more foreign cables and dismissed the objections: “Many analyzes have been done on this, and in the worst-case scenarios the prices will increase marginally as a result of this”. It is a strange sight when NHO now demands that the state cover the companies’ increased electricity bills. In the long run, we must have companies that make a profit, not with subsidies. In 2014, Erna Solberg’s energy minister Tord Lien (Frp) gave a license to the two large new cables. At the same time, he was clear that this would lead to increased electricity prices. “The answer to that is yes. There is a surplus of electricity in Scandinavia. That’s why the prices are low,” replied Lien. And at Statnett’s autumn conference just weeks after the Solberg government had taken over, Lien believed that Norway had to ensure that “cables are built that will have something to say about the price picture in Norway in the period around 2020.” Some argue that it is the war in Ukraine that has led to the high electricity prices in Norway. It is true that the increased price of natural gas has led to more expensive electricity, for example in Germany. But Norway does not generate electricity from natural gas. In contrast, the foreign cables lead to Southern Norway being affected by the German development in electricity prices. Trønders and northerners also live in a world with war in Ukraine and increased gas prices, but are not affected by the high prices. The reason is that Central Norway and Northern Norway are not connected to the European electricity market. The export capacity to high-price countries is so low that the power surplus results in low prices. You might think that if you connect Northern and Southern Norway together, the price will be somewhere in the middle. But it won’t be, also Central Norway and Northern Norway will then get the same high price as Southern Norway. The reason is simple; as an integral part of a European electricity market, it is the price in this market that decides. Transmission capacity between north and south will result in central Norway and northern Norway also receiving these prices. Low power prices in Norway will be history. And if we produce 5, 10 or 15 TWh extra with hundreds of new wind turbines, it will still not change the price in a European market of 3500 TWh. The billions that the power companies earn correspond to billions in increases in electricity bills. Norway will not get richer from it. People are getting poorer and the power companies are getting richer. The government responds with large aid packages. It’s important, and it helps people in the short term. But it is not a long-term solution for the state to transfer tens of billions to the power companies via Norwegian consumers and businesses. Yes, the power companies are largely owned by municipalities. But there are better and fairer ways to strengthen the municipal economy than through a large extra burden on people’s private finances. The long-term answer is an electricity policy built on solid social democratic values. If you want to keep lower prices in Norway, you have to gain control over the foreign trade in power and the security of supply throughout the year. NVE and Statnett must be tasked with managing power resources that ensure predictable and long-term access to clean and affordable energy for Norwegian households and businesses. It requires that the exchange of power with foreign countries be managed according to this objective. Only then does it make sense to develop new clean power, and then the state can spend its billions on ENØK and good climate measures. Managing foreign trade by force does not mean “cutting the cables”, any more than traffic regulations mean “closing the roads”. It means putting people before the power companies, community interests before market forces. Power rationing is now feared. But Norway does not lack power. There is enough reasonable power for both households and businesses as long as we use it sensibly and have control over exports. Paradoxically, it is particularly pointless for those who do not want to regulate foreign trade to talk about rationing. Supply and demand always go up in a market. When market forces rule, higher prices mean that those who cannot afford it are left without enough electricity. That has never been the Social Democrats’ answer. Ultimately, this is about a choice: Is it the case that people exist for the economy and money? Or should the economy we create exist for the people? In opposition, the Labor Party contributed to the state owning the foreign cables. But what was the point of it, if it wasn’t to be able to rule? Already last winter, many AP teams decided that we must get control of the electricity market. Norwegian hydropower has been a cornerstone in the building of social democratic Norway, because wise people decided that it should not be a common market commodity. The stone worker Olav Oksvik from Møre and the road worker Gerhardsen made choices that built the country. Now we must make equally brave, wise and forward-looking choices.
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