Norway maintained its right to cut power exports, but only if there is a real shortage of electricity at home.
The government on Friday presented its highly anticipated plan to control exports during a supply crisis. The proposal suggests a staged approach to protecting water resources, including requirements that hydropower producers implement strategies to ensure security of supply and the right for authorities to intervene if there are concerns about a shortfall.
Germany and the Netherlands rely on electricity from the Nordic nation, which is sometimes referred to as Europe’s green battery because of its vast and cheap hydro resources. About 10% of the UK’s electricity demand is also met by Norway.
Norway’s hydro reservoirs have recovered in the past few months, but are still below the long-term average for this time of year. At the height of the energy crisis in August last year, the government indicated it may curb exports to protect domestic supplies.
“The new management mechanism means that greater demands are placed on the producers in situations where there is a prospect that the magazine filling may reach low levels,” Prime Minister Jonas Gahr Store said on Friday. “Through this, exports can be limited.”
Norway isn’t a European Union member, but is part of the single energy market, and rules state that countries aren’t allowed to curtail flows to neighbors for prolonged periods. The nation gets almost all its electricity by running water through turbines. Historically, it has been able to export a hefty surplus and still have among the lowest prices in Europe.
Open borders are key for protecting security of supply, newswire NTB reported Johannes Bruun, a director at Danish network operator Energinet, as saying. “The whole narrative in Norway is wrong,” he said, adding that the legal options for limiting exports are also limited.
The Norwegian government insisted on Friday that its new plan falls within the limits of EU laws.
“If we had had this system in place in the spring last year, before we saw the consequences of the snow melt, the management through the summer would have been better,” Oil and Energy Minister Terje Aasland told journalists. “Before you had to hit the breaks, both on production limits and eventually export limits, the situation would have been much better than it was.”
“Norway’s system is different from most country’s systems,” Store said Friday. “At Nordic meetings and European meetings, we have taken the initiative to explain how Norway will secure its levels, such as Germany is filling up their own gas reservoirs. That has been explained politically and, I believe it has been well understood.”
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