High energy prices in Norway to continue into summer

High electricity prices in Norway are likely to continue throughout the spring and summer, with experts predicting seasonal price records during the year's warmest months. 

A dam in Norway.
High prices could be caused by reservoirs not being sufficiently replenished by melted snow. Pictured is a stock photo of a dam. Photo by Bjørn Kamfjord on Unsplash

Residents in southern Norway can expect to pay record energy prices this summer, electricity price analyst Tor Reier Lilleholt has said. 

“It is estimated to be the highest you have seen. A price of between 1.5 and 2 kroner per kWh, without taxes, is expected in southern Norway this summer,” Lilleholt told business and financial site E24

However, Lilleholt added that bills were still expected to be lower overall as consumption would also dip during the summer.  

Energy prices are typically lower during the year’s warmer months as the snow melts during the spring, replenishing reservoirs. Most of Norway’s energy needs are provided by hydroelectricity.  

However, as there has been little snowfall this year, it is expected that the melted snow won’t refill reservoirs to the same extent. High gas and coal prices, triggered by the war in Ukraine, are also likely to contribute to high prices throughout the summer. 

Aslak Øverås, information manager at Energi Norge, the organisation representing companies that produce, transport and deliver electricity, said that firms would need to plan ahead this summer. 

“The power producers will arrange the water in the reservoirs so that it will last throughout the year. They will also need to consider that there is abnormally little snow in the mountains and that there is less precipitation in the spring. The alternative to keeping prices high now is that the magazines can run low, and we get even higher prices when autumn comes around,” Øverås said. 

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Norwegian gas plant back in service after fire

Norway is Europe's second-biggest supplier of natural gas behind Russia and key to ensuring energetic autonomy for the continent. Its sole liquefied natural gas plant is operating once again after being ravaged by a fire in 2020.

Norwegian gas plant back in service after fire

Norway’s sole liquefied natural gas (LNG) unit has been restarted after a 2020 fire and will soon begin production, energy company Equinor said Friday, a move expected to help increase exports to Europe.

Norway is Europe’s second-biggest supplier of natural gas behind Russia.

Production at Equinor’s plant in Hammerfest in northern Norway, which makes it possible to deliver gas by ship in liquid form, is to help Europe cut its dependency on Russian gas after its invasion of Ukraine.

“We have completed the repair work on the plant, we have completed the testing… and we have now started the cool-down process,” Equinor spokesman Gisle Ledel Johannessen told AFP.

“It will take some time to finalise the cool-down process. The next step is to get the liquefied natural gas on the tanks”, he said.

Johannessen would not specify when that could happen, but said it was “a short time frame”.

The site, damaged in a September 2020 fire, produces almost 4.65 million tonnes of LNG per year, according to Equinor.

Norway announced steps in March to keep its gas production at maximum levels to help Europe reduce its Russian dependency.

Among other things, the Norwegian Petroleum and Energy Ministry agreed to adjust the production licences of three offshore fields so that they can prioritise gas production over oil.

But its exports have been squeezed by production capacities, already churning at maximum levels, and the distribution system via pipelines.

It is hoped the Hammerfest unit will make it possible to increase export volumes.

Norway covers between 20 and 25 percent of the European Union’s and Britain’s gas needs, while Russia currently supplies around 40 percent.