NORWAY Law and Practice Contributed by: Jøran Sandvik, Aksel Tannum and Ida Mattsson Sperre, Advokatfirmaet Haavind AS
High-Load Consumers in the Electricity Market High-load consumers are addressed in Norway’s electricity market through a combination of mar- ket mechanisms, regulatory frameworks and tai- lored agreements. Given Norway’s abundant renewable energy resources, low energy costs and sustainable energy system, its electricity market has become a favourable environment for power-demanding industries, such as aluminium production and data centres, in which companies balance oper- ational needs with sustainability goals. High-load consumers can participate in the elec- tricity market by either purchasing electricity directly from the wholesale electricity market or by entering into long-term PPAs. PPAs are often entered into by industrial cornerstone compa- nies with neighbouring renewable power plants, to secure stable electricity prices and supply for a longer period of time. High-load consumers in Norway are further encouraged to participate in demand response programmes with the TSO or local DSOs by reducing or re-allocating electricity use during peak demand periods and offering flexible ser- vices, such as frequency regulation or reserva- tion of capacity, in order to help balance the grid and reduce electricity costs in the market. 2.2 Electricity Imports and Exports The Norwegian electricity market is part of the Nordic and European power market. Most Nor- wegian power is produced from hydropower. Norway is a power surplus country, meaning that in a normal year Norway exports power to its neighbouring countries.
Norway’s international electricity interconnectors consist of a total of 17 cables, including both overland power lines and subsea cables. Nor- way has a total of seven undersea power cables projecting to other countries; four of these go to Denmark. These cables are old and have a much lower capacity than the new “highways” that have been built to the UK and Germany. The total installed capacity of the interconnectors is over 9,000 MW as of 2022, according to the Norwegian Energy Regulatory Authority (NVE- RME). This provides the theoretical potential to transfer approximately 80 TWh/year between Norway and other jurisdictions. Norway has a total theoretical transfer capacity of around 30 TWh/year to non-Nordic countries, namely the Netherlands, Germany and the UK. The division between the import and export of electricity to and from Norway varies from year to year based on weather conditions, etc. In the period 2003–19, the average annual import amount was 8.4 TWh, while the annual export amount was 15.2 TWh. In 2020, there was a lot of precipitation and full power reservoirs in Norway. In total, Norway exported 25 TWh of electricity in 2020 and imported 8 TWh. In 2021, the situation was quite the opposite, especially in southern Norway in the second half of the year. There was little wind and precipitation, extreme gas and coal prices, and a doubling of CO₂ quota prices. Despite lower reservoir lev- els, power exports increased by 3.4% compared to the previous year. In 2023, Norway exported approximately 30 TWh, at an average rate of 86 øre/kWh, and imported approximately 13 TWh at an average rate of 80 øre/kWh. Power exchange with other jurisdictions is han- dled by the Norwegian TSO (Statnett). Power exchange requires a separate foreign trade licence. There is a joint licence for the Nordic
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