Expensive market: Engineers near turbines at a wind farm in Sainte-Suzanne on the French island of Reunion. The country’s ruling National Rally wants to replace free trading with bilateral or multilateral contracts with its eurozone neighbours. — AFP
LONDON: The collapse of Norway’s government brings into focus the hundreds of cables transporting electricity across borders in Europe and how they’re being transformed into political weapons.
A dispute about exports of Norway’s cheap power is partly behind the government breakdown.
Elsewhere, Swedish Energy Minister Ebba Busch said she was “furious” with Germany in December as exports to Europe’s biggest economy caused higher prices for the Nordic nation.
In France, the far right party wants to stop free trading across borders altogether.
Europe’s electricity system is the world’s largest interconnected grid linking nearly 600 million people, according to energy think tank Ember.
It embodies the spirit of solidarity in the European Union and sharing resources with your neighbours. The rise of right-leaning parties with an emphasis on inward-looking policies is disrupting that harmony.
“We will have national control,” Norway’s Prime Minister Jonas Gahr Store said at a press conference last Friday. “It is Norwegian democracy that shall decide over Norway’s power resources.”
Interconnectors are supposed to work based on price not politics. The idea, is that power flows to the more expensive market, providing more supply and reducing costs in that country.
The links work best between countries with different energy mixes, for example France with its huge nuclear fleet and the United Kingdom with its supply of wind generation.
The rise of intermittent renewable sources of power has revealed the downside to these links – a shortage in one country often leads to soaring costs next door too.
The debate in Norway has been brewing for some years, with soaring prices in north-west Europe stoking discontent.
The nation was Europe’s third-biggest electricity exporter last year and sales to the United Kingdom and other markets have caused price spikes, particularly in the south of the country.
Higher bills for Norwegians, make it a political issue. Norway’s citizens are due to go to the polls in September.
Though Norway isn’t an EU member, it is part of the single energy market. Under the rules, countries aren’t allowed to curtail flows to neighbours for prolonged periods.
The unity of Europe’s energy market was tested during the energy crisis. Would countries be willing to export electricity and risk pushing up bills further at home?
The framework largely held up but the cracks started to show prompting the Norwegian government to mull a control mechanism to limit exports.
Whether or not to replace aging cables in Norway that are approaching the end of their operating lives “has become a huge political debate and a very populistic debate”, said Lars Ove Skorpen, director of Power and Renewable Energy at Pareto Securities in Oslo.
Norwegian Premier Store does say he wants to work with other Nordic countries to address fluctuations and instability in the power market.
“If we lift our gaze and look forward to what is happening around the North Sea, there is a strong emphasis on renewable power from all countries,” he said.
“But then every country has to sit down and consider what is their share of such a possibility and there is no one who is going to do something that is not in their interests.”
In France, Marine Le Pen’s National Rally wants to take back control and replace free trading with bilateral or multilateral contracts with neighbouring countries.
France and its 57 reactors are the backbone of the European power system. If politicians can find a way to keep more of that cheap supply at home, it might even attract more manufacturing and industry, providing an economic boost. — Bloomberg
