Until 5pm today, there are negative electricity prices in southern Norway, and between 2pm and 3pm the electricity is minus 23 øre/kWh, before grid rent and taxes. Electricity prices have never been so low on a weekday. The prices apply to Eastern Norway and Sunnhordland to Buskerud, i.e. price level NO1 and NO2. – It is the effect of both sun and wind in the countries around us. That’s what the managing director of Nord Pool, Tom Darell, says. He points out that the prices are due to a lot of wind and sun in the Netherlands and Germany, as well as wind in Denmark and England. Wind turbines that produce electricity when they rotate in the green outskirts of Bottrop in Germany. Photo: AP Darell tells of a growing trend, where the effect of both sun and wind from nearby countries leads to cheaper electricity between 10am and 4pm. – When the sun goes down in the afternoon, you are left with only wind. Then Norwegian producers start producing again, and then prices go up. In this case you can read about: Collaborating on cheap electricity – Power prices in our neighboring countries, including Germany, have a major impact on power prices in Norway, says Anders Kringstad, director of market analysis at Statnett. When Russia went to war against Ukraine and much of the gas disappeared from Europe, it suddenly became clear to many how the energy market is connected. Norway, and the rest of Europe, cooperate to produce electricity as cheaply as possible. – The countries did that before as well. Just not as visible, says Kringstad. Norway already got its first overseas cable to Sweden in 1960. After the invasion of Ukraine, Russian gas supply was reduced from 40 per cent of Europe’s demand to around 9 per cent, and we had the so-called energy crisis. The EU’s ambitions are now to become independent of Russian coal, oil and gas by 2030, and preferably before 2027. This means that energy equivalent to around 1500 TWh must be covered by renewable energy, energy efficiency and savings, other natural gas, nuclear power and other sources and measures . This is necessary if the targets of a 55 per cent emission cut by 2030 are to be achieved. Energy revolution in the EU The whole of Europe – where coal and gas have long been an important part of energy production – is now working on restructuring its energy system. SUN FOR THE PEOPLE: Workers install solar panels on the roof of a house in Rivas Vaciamadrid, Spain. The energy crisis is speeding up the installation of solar panels in housing communities in Spain that want to become self-sufficient. Photo: AP By 2030, the EU must have 32 per cent renewable energy sources in the EU’s energy mix. This will be done through the EU’s fourth energy market package. The aim of the package is to facilitate the transition from fossil energy to clean energy, and fulfill the climate commitments in the Paris Agreement. And one of the countries that is well placed in the renewable race is Germany. Much of the reason is that Germany had the largest import of Russian gas in Europe before Putin turned off the tap. The country therefore had to quickly switch to other energy sources, and in 2023 renewable energy accounted for a record share of 59.7 per cent of the public net power production in Germany. The main share of renewable power produced in Germany is obtained from wind and solar power. The disadvantage is that the production varies with the wind and solar conditions. PURE AMBITIONS: – Germany wants to reach 80 percent renewable production in the power sector by 2030 and almost full renewable production by 2035, says professor of energy economics Konstantin Lenz. – You will have times when you have more supplies than you need. And times when you have less supplies, depending on the weather. Under such conditions, you need predictable backup capacities. That’s what Konstantin Lenz says, professor of energy economics at Erfurt University College and energy analyst at Volue Insight. So when the sun doesn’t shine and the wind doesn’t blow, the gap between consumption and production must be closed. – Then we need the gas power plants, says Lenz. And that’s when the electricity price can suddenly become higher. What does the EU’s fourth energy market package contain? Package number four is characterized as the most comprehensive energy package ever, and consists of eight laws that improve and tighten the current climate and energy regulations. Development of more renewable power and more energy efficiency are two key words. This means the following: • 32 per cent of the EU’s total energy consumption in 2030 must come from renewable sources. • The EU steps up the target for energy efficiency to 32.5 per cent in order to reduce energy consumption in Europe. • A strengthening of the consumer’s role and rights on the energy market • Each country must, in collaboration with neighboring countries, draw up national energy and climate plans for 2021 and 2030. Here a description of measures to achieve the various goals must be given. The package also provides a larger and more important role of Acer, which is the EU countries’ overall regulatory authority for energy. Varying electricity prices Without wind and solar power, the rest must be covered with production from power plants based on coal, gas and biomass, or with imports from other countries. This can affect prices throughout the European electricity network. He says that unlike renewable energy, coal and gas have different fuel and CO2 costs, says Lenz. The gas price has fallen since the energy crisis in 2022, but is again on the way up. Although Statnett’s analyzes indicate that the gas price will fully normalize, prices may be higher in the winter of 2024 and in 2025. At the same time, high CO2 prices result in relatively high electricity prices when gas power sets the price. – So what happens to electricity prices in Norway when the wind is calm in the countries around us? – If the wind is calm during the periods when it is cold and consumption is high, then there will be a shortage. Then the prices will also be high mostly across the continent. Then we will be affected here in Norway as well, says director of Nord Pool, Tom Darell. Darell points out that you get the opposite effect when there is ample access to renewable sources. DOES IT BLOW?: If it doesn’t blow on these wind turbines in Germany, the result could be high electricity prices here in Norway. But if it blows well, you get the opposite effect. Photo: AP When there is a lot of wind and a lot of sun in the countries around us, there is a power surplus that gives low prices. Then Norway can choose to save on water and take advantage of cheap imports instead. – Then the power price can even go into the red for periods. The market must ensure that everyone always uses the cheapest electricity to satisfy their electricity consumption and that the resources are used in the best possible way. When the cheapest electricity price is in Norway, we export to a neighboring country with a higher price. And when the situation is like today, we import. This is how export/import works The market model is based on the cheapest unit that is available being used first So, if Norway has the lowest price, we will export to a neighboring country with a higher price, as long as there is free transmission capacity If the cheapest unit or lowest price is outside Norway will import The capacity of the cables will limit how much we can export or import There is no single player (read producer) who has access to the Norwegian foreign cables Everyone buys or sells in the area where they have their obligations – export/import will be a result of the bids in the market Source: Nord Pool Norway’s unique position Hydropower from lakes and rivers is the very backbone of the Norwegian power system – and accounts for around 88 per cent of the total Norwegian power supply, according to the Ministry of Energy. – We are in an incredibly favorable situation in Norway. Today we have a power surplus of between 15 and 20 TWh, says Darell. ABUNDANCE: There is rarely a shortage of hydropower in our long country. This photo was taken at the Hellefoss power plant in Hokksund during the flood last autumn. Photo: NTB But he believes it is important to remember that the power surplus can vary greatly from one year to the next. – In addition, we expect that increasing electricity consumption will eat up the current surplus by 2027-2028. That is why it is important to add new energy also in Norway, according to Darell. He nevertheless points out that Norway sits on hydropower bases that are flexible and that we are better equipped to handle the challenges surrounding unregulated renewable power, which some other countries face. The power market in brief Why do we have power markets? In the past, each country had national monopolies that controlled energy. But the EU wanted to create more competition and transparency. Therefore, energy exchanges were established where electricity can be bought and sold. How does the power market work? Imagine that electricity is like a big cake. This cake is shared on the energy exchanges. Suppliers (those who sell electricity) buy pieces of the pie, and producers (those who make electricity) sell pieces of the pie. The power can be delivered the same day, the next day or even months in the future. High-voltage cables connect the countries so that electricity can flow between them. This helps to even out prices. What affects prices? Supply and demand: If there is a lot of demand for electricity, prices can rise. International events: Conflicts, natural disasters or politics can also affect prices. Connections between countries: The better the cables between the countries, the more stable the price. What about electricity prices? Prices affect everyone. Over the course of a year, prices can fluctuate a lot. Expecting lower prices in the future According to Statnett’s short-term market analysis from 2023, Europe’s energy crisis is now abating. – The main trend is that there has been more balance, the energy crisis is largely over, and they have managed to replace Russian gas a long way, says Kringstad. Russian gas has largely been replaced by liquefied natural gas, lower consumption and more renewable production. And power prices will probably be lower and more variable throughout Europe – also in Norway. Published 04/07/2024, at 14.31 Updated 04.07.2024, at 14.32
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Why do we get cheap electricity in Norway when it’s windy in Germany? – news Norway – Overview of news from different parts of the country
