NORWAY Law and Practice Contributed by: Jøran Sandvik, Aksel Tannum and Ida Mattsson Sperre, Advokatfirmaet Haavind AS
1.8 Unique Aspects of the Power Industry
areas capable of producing 30,000 MW from offshore wind.
The Norwegian energy sector is unique in sev- eral ways, particularly due to its geographical, climatic and legislative characteristics. Some of its distinctive features are as follows. • Hydropower dominance: Norway’s energy mix is heavily dominated by hydropower, which accounts for around 88% of domestic electricity production. The country’s topogra- phy, with its numerous rivers, waterfalls and mountainous terrain, is ideal for hydropower generation. • High share of renewable energy: Norway has one of the highest shares of renewable energy in its total energy consumption in the world, largely thanks to its extensive use of hydropower. • Energy export: Norway is not only self- sufficient in terms of energy, but it is also a significant exporter of electricity, primarily to neighbouring countries such as Sweden, Denmark, Finland and the Netherlands, through interconnectors. • “Europe’s Battery”: With its vast hydropower storage capacity, Norway acts as a sort of “green battery” for Europe. It can store excess electricity when demand is low and generate and export electricity when demand is high, thus providing grid stability and stor- age capacity for the integration of more inter- mittent renewable energy sources like wind and solar power in the European grid. • Public ownership: A significant share of Nor- way’s energy sector is under public owner- ship. See also 1.2 Principal State-Owned or Investor-Owned Entities . • Offshore wind power: The government has set significant ambitions for offshore wind development. By 2040, the goal is to allocate
2. Market Structure, Supply and Pricing 2.1 The Wholesale Electricity Market The Norwegian Wholesale Electricity Market Norway’s electricity market is an example of a mature, liberalised energy system that has been evolving since the early 1990s. As part of the Nordic electricity market, Norway has been at the forefront of market-based energy trading, emphasising efficiency, competition and cross- border integration. The Energy Act is the principal law governing the structure and function of the wholesale mar- ket. Regulation (EU) No 1227/2011 on whole- sale energy market integrity and transparency (REMIT), the EU framework for detecting and deterring wholesale energy abuse, has not been implemented into Norwegian law. Many of the regulations that follow from REMIT are, howev- er, implemented through the Energy Act and its Regulations, as well as the Nord Pool’s (private law) regulatory framework that prohibits market abuse. At the heart of Norway’s electricity sector is a market-based trading system. This system is characterised by its high level of hydroelectric power, making the Norwegian market highly renewable and flexible. The unique aspect of Norway’s electricity generation is its capacity to act as a “green battery” for the region, given its ability to quickly adjust production levels from its hydroelectric plants in response to market demands.
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