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Norwegian Nordic Power Market: Current Trends and Future Opportunities

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The Norwegian Nordic power market is characterized by a balanced supply and demand, dominated by hydro and nuclear energy. With an annual supply of 85-140 TWh and significant interconnection capacity, the market faces various challenges, such as price volatility driven by weather conditions and declining long-term prices. The push for renewable energy, alongside political pressures, is reshaping the market landscape. Opportunities lie in Norway's potential as a green battery for Europe, offering balancing power to support renewables like wind and solar, contingent on the development of more interconnectors.

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Norwegian Nordic Power Market: Current Trends and Future Opportunities

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  1. Perspectives and possibilities in thepower market Norwegian Nordic Power Market • Ole Gabrielsen

  2. Present situation • Balancedpower market • Balanced: supply ≈ demand • Dominated by hydro and nuclear (appr 90 %) • Norwegian supply: 85-140 TWh/year • Rathergoodinterconnection-capacity • Short term: weatherthe most important price-driver • temperature, precipitation and wind • Long term trend: decliningprices • «Grey» Europe influencesthe Nordic market • Thermalproductioncost (coal) decisive for Nordic powerprices ! • Coalfiredpower plants and interconnections «balance» the Nordic Power market • Price collapse in emissions has decimatedalso Nordic powerprices

  3. Wherearewe heading?

  4. Supply • Swedish-Norwegian market for el-certifikates • To meetEU’sdemandfor 67,5 % renewables (of total energyconsumption) within 2020 • Goal: 26 TWh(10 % of present supply) newrenewableswithin 2020 • Norwegian investments : appr 50 billion mrdr NOK • Pressure in thevendor market • Sponsored by theconsumers • All consumersobliged to buycertificates • Project income: power + certificates • The priceofcertificates have to be highenough to realizetheneededinvestments • New nuclearpower plant in Finland 2016 : 13 TWh • Extensionofcapacity in existingSwedishnuclears +15 %

  5. Demand • Demand: status quo (+) • Considerabledecline in industrialcomsumptionafterfinancalcrisis 2008 • 15 % decline in Norwegian power intensive industry • Shutdownsofcapacity in Swedish / Finnish paper and pulp industry • Still ongoing (Sødra, Stora Enso) • Politicalpressure for reducedconsumptionofelectricity • Buildingregulations: reluctant to electricheating • Energy efficienicy :EU-goal 20 % improvementwithin 2020 • Upsides • Growth in population, electrificationoftransportationand off-shore, newindustry

  6. Energy balance • How largesurplus ? NB: Prisavhengig produksjon (kull/gass) kommer i tillegg NB: Pricedependent supply (coal/gas) in addition

  7. How to utilizethesurplus(25-50 TWh or 10-20 %) ? • Pressureonpowerprices • More volatile prices • Renewables not regulated ! • El-vehicles: good, butminorimpact • 50 % of Norwegian vehicleselectrical = 3,5 TWh • Electrification offshore: good, butminorimpact • Utsira-høyden = 3 TWh • New powerintensive industry: good, butminorimpact • (Hydro Karmøy= 3 TWh) • Favourablepowerpricessufficient ? • Interconnectors: to come, buthowmany and how fast ? • Interconnectors more exchangethanexport • Exportca 60 % ofcapacity

  8. Opportunities for Norway • Norway: Green Battery for Europe • «Renewable -Europe» needbalancingpower • Norway canassist theunpredictablewind and solar • Norway withitshydro has theability, but dependent of more interconnectors • Installedcapacity in Norway is sufficient to offer balancingpower and potentialto invest in more capacity • Extension in existingpowerstations • New pump storagefacilities • Realistic potensial: another 10.000 MW

  9. Interconnectors is thekey • Do Norway catchthepossibility ? • Plannedinterconnectors • Ambitionsarereduced from 4 to 2 newinterconnectors • Germany 2018 • UK 2020 • Afterthat ?? • Long lasting project planning (10 years) • Monopoly for theGowernment • New legislation: Only Statnett is allowed to take part in interconnectors • Acceptable business models ? • One owneroftheinterconnector – anotherownerofthecapacity • EU in favourof spot to spot- exchange • Limited timeframe: How longwill Europe wait for Norway ? 2020 2016 2018 ??

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