UK markets closed

Why the ‘battery of Europe’ threatens to exacerbate Britain’s winter energy crisis

·5-min read
norway
norway

Perched on the edge of Lake Suldalsvatnet, few Britons will have heard of the Kvilldal power station.

Yet this hydroelectric plant – Norway’s largest, with capacity to power 1.7m homes – may soon play a pivotal role in keeping their lights on.

The site is one being relied on by the National Grid to provide power when the electricity network is most stretched this winter.

It is directly linked to the UK via a 450-mile interconnector that travels through underground tunnels, into the great Bokna Fjord and along the bed of the North Sea, before resurfacing in Blyth.

According to the National Grid, it allows us to tap clean power on demand when the wind isn’t blowing and our offshore turbines are standing idle.

But this link – and others between Norway and its neighbours – is fast becoming a toxic issue for politicians in Oslo as its electricity prices rocket.

Norway’s energy troubles do not stem from a dependence on Russian natural gas. An abundance of mountain plateaus, natural lakes and fjords has allowed it to generate almost all of its electricity through hydropower for decades, backed up by small amounts of gas and wind power generation.

It is also the third largest exporter of natural gas in the world, behind only Russia and Qatar, leading some to describe Norway as the “battery of Europe”.

Now, however, as Europe faces an energy crisis in the wake of Putin’s invasion, foreign demand for Norway’s power is having a stark impact on its consumers.

'Norway will come first'

As electricity export prices increase, so have its domestic tariffs – to record-breaking levels this summer.

Morten Frisch, a Norwegian energy consultant based in the UK, says prices this year have typically been 10 to 20 times higher than previously, adding: “This is not something people can afford to pay”.

The problem is exacerbating regional disparities, because most of Norway’s interconnectors are based in the south.

While electricity can cost €2 per megawatt (£1.69) for households in northern areas, prices in south western Norway can be €550 per megawatt, according to Frisch.

The toll on Norway is not just financial, however. It relies on reservoirs to feed its hydroelectric plants, mostly refilled by rain or melting snow. Following a dry spell during the spring and summer, the reservoirs were last month reduced to a 20-year low of 46pc of capacity in the south west.

“This is not something you can just fill up at will,” Frisch explains. “When they run dry, they run dry, and it's likely to take a minimum of three months, possibly six months, before they can be refilled by rain.

For Oslo’s government, this has made the subject of foreign power exports increasingly thorny. Some campaigners have called for Norway to cut itself off from Europe.

A Facebook group named Vi som krever billigere strøm (meaning ‘we who demand cheaper electricity’) has more than 600,000 members. Users complain of a “price contagion” spreading from the likes of Britain and Germany and call on Prime Minister Jonas Gahr Støre to take action.

Støre has argued that staying connected to Europe benefits Norway and means it can tap foreign power if needed, telling the Aftenposten newspaper: “There is reciprocity in this”.

Yet there is pressure for a rethink. The country’s parliament could be recalled as soon as this week to discuss fresh measures to tackle the crisis.

Ministers have discussed beefing up government support to consumers, and floated the possibility of power export restrictions. Støre’s minority Labour government is currently propped up by the Central party and relies on opposition parties to pass laws.

Last week, Terje Aasland, the oil and energy minister, told the Verdens Gang newspaper that “concrete measures” were being devised to “limit exports when the degree of hydroelectric water reservoir filling is below a certain level.

“When there is little water in the hydroelectric water reservoirs, Norway will come first”.

It is likely to prompt further questions for the National Grid about whether Britain can rely upon Norway.

The Grid claims there will be plenty of electricity available this winter, with a forecast buffer capacity of four gigawatts, or 6.7pc. However, this is based on expectations that the UK can draw on 5.7 gigawatts of power from Europe, or roughly 10pc of demand at peak times. That includes 1.4 gigawatts from Norway.

“I don't think the UK should rely on the 1.4 gigawatts coming,” Frisch says.

A Grid spokesman previously said it was “important to note that a stress period in Great Britain coinciding with one in Europe is extremely unlikely and to date has never happened before.”

A UK Government spokesman insisted that Britain had "secure and diverse energy supplies", including gas reserves in the North Sea. He added that the North Sea Link with Norway would bring "stability and security to both our countries’ power markets – bringing mutual benefits and ensuring efficient electricity trading".

Kathryn Porter, a UK energy analyst behind the consultancy Watt Logic, thinks the British and Norwegian governments should discuss in more detail what would happen in that unlikely scenario - and whether we can do more to help Norway.

The UK could agree to send more power to Norway in the months ahead of winter to reduce strain on its reservoirs, for instance.

“If they use that water today, then it really won’t be available tomorrow,” she adds. “Foreign demand is using up a scarce resource that is supposed to benefit the citizens of Norway, who paid for it.”

That is worth remembering this winter, when flipping a light switch in Britain uses power generated more than 400 miles away in Kvilldal.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting