Norway Eyes Cutting Power Exports Amid Soaring Domestic Electricity Prices

Norway is grappling with skyrocketing electricity prices, which have surged to six times the European Union (EU) average, sparking political and public backlash. The country’s energy minister, Terje Aasland, has voiced frustration over the situation, describing it as “outrageous.” In response, the Norwegian government is considering a major shift in its energy policy, with discussions underway to cut the interconnectors linking Norway with Denmark when the agreements come up for renewal in 2026. This proposal is central to a broader political debate about energy security and the domestic affordability of power, especially as Norway has historically benefited from low electricity costs due to its abundant hydropower resources.

Rising Electricity Prices and Domestic Impact
Norway’s electricity prices have recently reached historically high levels, with peak prices rising above 13 kroner (€1.12) per kilowatt-hour, which is significantly higher than the EU average of €0.1867 per KWh for the first half of 2024. This price hike has been driven by several factors, including lower-than-expected wind energy generation in Germany and the North Sea, combined with colder-than-usual temperatures in Norway itself.

The price spike is most pronounced in the southern and eastern regions of the country, where prices are much higher compared to the western and northern regions. The latter areas still benefit from the country’s vast hydropower resources, which keep prices relatively low. Despite forecasts for a reduction in prices, due to an expected increase in wind energy production across Europe, the current situation has fueled calls for a review of Norway’s power export policies, particularly the interconnections with neighboring countries.

Energy Export Policies Under Scrutiny
The high domestic prices and the ongoing electricity price shock in Europe have intensified a political debate over Norway’s energy exports. Norway has traditionally exported a significant amount of its hydropower electricity to other European nations, particularly Denmark, Germany, and the UK. The governing Labour Party has announced that it will not renew the “Denmark cables” in 2026, which facilitate electricity transfers between Norway and Denmark. This move aims to prioritize domestic consumers and ensure that Norway’s electricity resources remain affordable for its population.

Alongside the Labour Party’s position, the smaller Centre Party, another coalition partner, is calling for a renegotiation of the terms of power exports to the UK and other European countries. The Centre Party’s leadership is pushing for stricter controls on power exports to ensure that domestic needs are met before electricity is sent abroad.

The core issue here is the perceived injustice of exporting affordable hydropower while domestic prices skyrocket. Critics argue that the electricity generated from Norway’s abundant renewable resources should first be used to keep prices low for Norwegians, as it has done historically. They see the export of electricity at high prices as a contradiction to the country’s long-standing energy policy, which focused on ensuring affordable power for its citizens.

Hydropower and Norway’s Strategic Role in Europe
Norway plays a central role in the European energy landscape, largely due to its vast hydropower capacity, which supplies a significant portion of the continent’s renewable electricity. In addition to hydropower, the country is a major producer of oil and natural gas, making it a key player in Europe’s energy supply chain. However, Norway is not part of the EU and, as such, has more flexibility in determining its energy policy. Despite this, it remains a crucial energy partner for the EU, particularly in terms of electricity interconnections.

The growing dissatisfaction with high energy prices has sparked a renewed debate about how much power Norway should continue to export, and under what terms. The Labour Party’s commitment to canceling the Denmark cables and the Centre Party’s push to renegotiate deals with the UK and Germany are indicative of a broader shift toward prioritizing domestic energy needs over European energy integration.

Electoral Impact and Policy Direction
The issue of electricity prices and power exports is expected to be a dominant theme in Norway’s upcoming 2025 parliamentary elections. As high electricity prices continue to dominate the national discourse, both the Labour Party and the Centre Party are aligning their platforms around the need to secure affordable energy for Norwegian citizens. The public discontent over rising electricity costs has already begun shaping political campaigns, with parties seeking to address the concerns of voters who feel that their power supply is being unfairly affected by external energy links.

The political momentum against power exports is growing, and the government’s decision to cut interconnections with Denmark and potentially renegotiate energy agreements with the UK and Germany will be pivotal in the coming years. As discussions move forward, these decisions will undoubtedly influence both domestic energy policy and Norway’s future role in the European energy market.

A Strategic Shift in Energy Policy
The debate over electricity exports and the country’s future energy policy will culminate in the national convention scheduled for April 2025, where the Labour Party will formally discuss its proposal to cancel the Denmark cables. With the rising cost of electricity continuing to put pressure on consumers, Norway’s energy strategy is at a crossroads. The proposed changes could not only reshape the country’s energy future but also redefine its relationship with the broader European energy market.