NORWAY Law and Practice Contributed by: Jøran Sandvik, Aksel Tannum and Ida Mattsson Sperre, Advokatfirmaet Haavind AS
1. Structure and Ownership of the Power Industry 1.1 Law Governing the Structure and Ownership of the Power Industry Norway’s power market is a cornerstone of its economy, characterised by a comprehensive regulatory framework that is aimed at ensuring efficient operation and sustainability. The Nor- wegian power sector is distinguished by its sig- nificant reliance on renewable energy sources, particularly hydropower, which accounts for a substantial portion of electricity generation. As of 2024, approximately 88% of the energy mix was derived from hydropower, while wind power contributed around 11% (see also 2.2 Electricity Imports and Exports ). Notably, more than 75% of Norwegian hydro- power production is flexible, thanks to the presence of reservoirs that account for half of Europe’s total reservoir storage capacity. This not only underscores Norway’s commitment to sustainable energy, but also influences the struc- ture and regulatory approach of the industry. The Norwegian power industry’s ownership structure influences its operation, efficiency and strategic direction, and is characterised by a mix of state, municipal and private ownership. The public sector owns approximately 90% of the production capacity for electric power in Nor- way – mostly due to requirements for a minimum of two-thirds public ownership for hydropower (see also 1.4 Sale of Power Industry Assets ). The largest producer is Statkraft SF, which is wholly owned by the state and is Europe’s larg- est generator of renewable energy. The Norwe- gian mixed ownership model, combined with a robust regulatory framework, supports Norway’s objectives of maintaining a reliable, efficient and sustainable power system.
Statnett SF, also a state-owned entity, owns almost 100% of the Norwegian transmission system, as well as a significant portion of cross- border cables, including subsea interconnec- tors. It is mandatory for all grid companies to be legally unbundled, and grid companies with more than 100,000 customers must also be function- ally unbundled, as specified in the Energy Act (Sections 4-6 and 4-7). Most grid companies are primarily owned by municipalities and coun- ties, although some are privately owned as well. There are no requirements for public ownership for wind power plants, solar power plants, and transmission or distribution facilities. The governance of ownership and operations within the various segments of the Norwegian power industry is underpinned by several pivotal statutes, notably the Energy Act ( Energiloven ). This Act lays down the foundational legal frame- work for structuring the electricity sector in Nor- way, addressing aspects such as market regu- lation, system responsibilities, and fostering a competitive market landscape. Ownership of hydropower plants is regulated in the Waterfall Rights Act. The Norwegian Water Resources and Energy Directorate ( Norges vassdrags- og energidirek- torat or the NVE) plays an instrumental role in regulatory oversight of the energy sector. The NVE handles licence procedures, ensures adher- ence to legal standards and monitors the ener- gy sector to promote efficient and sustainable operations. The Norwegian Energy Regulatory Authority ( Reguleringsmyndigheten for energi or the NVE-RME) is the regulatory authority for the electricity and natural gas markets. Other central authorities include various minis- tries within the Norwegian government, with the Ministry of Energy ( Energidepartementet ) being
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