Norway faces pressure to curb power exports as prices surge

(Bloomberg) -- The Norwegian government is facing increasing calls to curb electricity exports to the continent as power prices jump at home. 

The uncertainty over coal and gas supplies from Russia has sent power prices soaring across Europe, which is making the cheap Norwegian hydro electricity even more attractive. Exports outside the Nordic market are up almost 50% from a year ago just as more households and factories than ever are struggling to pay their bills. 

The government has been called on to take measures -- both by the public on social media and in the parliament. Among others, former energy minister Sylvi Listhaug of the populist Progress Party this week proposed to limit foreign sales. 

“It’s not acceptable that Norwegian power consumers should pay the price for Germany’s naive energy policy,” she said in a parliament session, referring to Germany’s historical dependence on Russian energy that is now backfiring. 

The Norwegian government will only go as far as to say that it wants to review exports. Flows on the cables are regulated by deals with both the European Union and the U.K. and Norway can’t simply cut flows to provide relief to domestic supplies, which are the lowest on record in parts of the country. 

Power prices are almost five times higher than a year ago and Norway, like other European nations, has been forced to introduce subsidies as the cost of everything from food to petrol is surging. While lower than in most other European nations, inflation remains close to the 13-year high reached in December and pressure is mounting on new Energy Minister Terje Aasland to take action.

“We want to have a dialog with the U.K. and the EU on imports and exports with regard to our national security of supply,” said Amund Vik, state secretary in the Norwegian Ministry of Petroleum and Energy. The department is also planning a review of how exports are impacting the competitiveness of Norway’s companies, he said. 

So far this year, Norway has exported almost 4 terawatt-hours, or about 7% of its total production, to Germany, the U.K. and the Netherlands. Hydro-reservoir levels in the most western price area is just over 10% full.

So far in April, power prices in the Oslo area have been as much as 37% higher than the Nordic average. 

The nation get almost all of its electricity from its vast hydro resources. Historically, it has been able to export a hefty surplus and still have the lowest prices in Europe. 

(Updates with Oslo power prices in penultimate paragraph.)

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