EXPLAINED: Why are energy costs soaring in southern Norway? 

EXPLAINED: Why are energy costs soaring in southern Norway? 
Vemork, a hydroelectric plan. Photo by Mark König on Unsplash
Electricity bills for customers in southern Norway are shooting up due to record-high energy prices, leaving a big dent in people's pockets. Here's why. 

The price of electricity in southern Norway has reached the record high level of more than 115 øre per kilowatt-hour

This is more than double the cost of electricity in central and northern Norway, and the rising prices mean that energy bills for consumers in the south could increase by as much as 2,000 kroner per month more compared to last year, according to energy price analyst from Volue Insight, Tor Reier Lilleholt . 

The massive price differences between the north and the south are down to a few factors. Firstly water reservoirs in southern Norway are incredibly low due to a small amount of rainfall over the summer. 

“In the northern and in central Norway, we have water in our reservoirs, while southern parts of the Nordics have very little water,” Trygve Sørås, head of power management at NTE Energy, told public broadcaster NRK

In addition to the lack of rainfall, southern Norway has also exported large amounts of energy to the continent, meaning supply has struggled to meet up with demand.

“The continent is also seeing very high power prices, so some energy has been exported there. Therefore in the south, reserves aren’t as fully stacked,” Sørås said. 

Norway sold a record 5 billion kroner worth of energy to other countries in the first half of 2021, a record for power exports in the country.  

Things are looking much rosier for consumers in central and northern Norway, though. central Norway is benefiting from increased wind and hydro production. This output is expected to continue for the foreseeable future keeping energy prices low throughout the winter in central Norway. 

“If the weather is normal for the time of year, the prices in central Norway will be at this level throughout the winter,” Sørås explained. 

Frustratingly, the south can’t buy any of the surplus power from northern and central Norway. 

“There is little transmission capacity from the north to the south, which means a price bottleneck between the north and south,” energy price analyst from Volue Insight, Tor Reier Lilleholt, explained to the public broadcaster. 

This means southern Norway is forced to buy much more expensive energy from the continent through subterranean cables. 

READ MORE: Norway and UK complete world’s longest underwater sea cable

Lilleholt believes this will exacerbate the issue even further for those in the South, leading to consistently high prices throughout winter. 

“We will also connect to Britain and British prices with a new cable in southern Norway during the autumn. Prices are even higher there than in Germany and the Netherlands, and the UK needs even more power than those countries. This together with a dry autumn could trigger high prices this winter,” he told NRK. 

How to get the best deal

With prices in southern Norway only expected to rise during the winter, getting the best deal possible has never been more important to stop you from feeling the pinch. 

Shopping around isn’t the only tip for getting the best bang for your buck, but also making sure you choose the type of energy agreement that works best for you. 

If you want to find out more, check out our guide to getting the best deal here


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