opinions
Arne O. Holm comment:
It Is Absurd That The North Pays For Electricity In The South
Commentary (Eastern Finnmark): We are paying the electricity bill for the rest of the country, while lacking enough power for our own consumption. The fact that several months of rainfall in the north have filled the reservoirs, while drought is emptying those in the south, does not improve the situation. We are footing the bill regardless.
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This is a comment written by a member of the editorial staff. All views expressed are the writer's own.
Few things generate more political engagement – read: arguments – and a comments section far beyond the vulgar, than electricity prices. Even the roar of diesel engines pales in comparison.
So let me establish a couple of things before I continue, and then we can argue about the rest.
It is not true
It is not true that what we primarily lack in the Northern Norway is electricity. What we lack is transmission capacity. Grid capacity from production to consumer. After this summer, the reservoirs are full of water that is being locked in. Millions of kroner – an important part of municipal finances – are simply flowing straight into the sea.
While in the south there is an obligation to connect those who want more electricity, whether private individuals, businesses, data centres or crypto speculators, everything comes to an abrupt halt in the north.
In Nordland county, from Svartisen northwards, in Troms and in western Finnmark, reservations, as they are called, stop at 5 megawatts (MW). Exactly within what the regulations require, but no more should anyone need it.
Everyone knew, nothing was done.
But that is not the full picture.
In Lofoten and Vesterålen in Nordland, and around Harstad in Troms, the limit is 1 MW. The same applies in eastern Finnmark.
Thank you for still following along.
A state of emergency
But forget the details.
The most important thing to understand is that part of Norway, with plenty of electricity – the North with a capital N this time – is subject to an energy policy state of emergency. Exceptional rules replace the rules that apply to the rest of the country.
One more thing before I continue.
There is no point in joining the queue to be allocated electricity either. Even if some of those who have already received a reservation withdraw, no new applicants are admitted. That is simply how it is.
By the way, I must add one more thing, because you may be asking: is this really this serious? The grid may be old and poor, and unsuitable for transporting more electricity from producer to consumer, but it still supplies those who already have it, does it not?
Well. This was a foretold crisis. As early as 2005, it was established that the grid in Finnmark could collapse.
And it did, because nothing was done, even though everyone knew.
It was a crisis that had been warned about.
In August 2022, the system collapsed for the first time. The solution was to cut power to parts of the business sector for a period.
So then it was fixed?
Collapse upon collapse
There is no quick fix for a power grid whose warning lights were already flashing red 20 years ago. Bright red.
On 22 June 2024, it happened again, on Norway's border with Russia. All of Eastern Finnmark was plunged into darkness. A few months later, in September, the Norwegian Water Resources and Energy Directorate (NVE) concluded that security of supply in Eastern Finnmark had deteriorated further.
People shouted and screamed, but no one listened. Not for 20 years.
But then something happens, elsewhere in Norway. Suddenly, electricity prices rise in the south.
In the north, on the border with Russia, the electricity supply is critical.
In the south, electricity becomes more expensive because sanctions against Russia reduce imports of Russian gas to Europe. That cry is heard, and so it takes only a few months before the state picks up the electricity bill in the south. Various schemes eventually led to something called the Norgespris (Norway price). In time, for both cabins and homes.
A maximum price which the government has calculated will cost NOK 21.5 billion in subsidies. And because electricity is guaranteed to be cheap regardless of what it actually costs, electricity consumption rises even as production falls due to low water levels in the reservoirs.
They shouted and screamed, but no one listened.
Now comes the bonus
There is no longer any reason to save electricity when the state pays the bill.
And now you will get the bonus, if you are still following.
In the north, where there is plenty of electricity but no grid to distribute or sell it, the price is too low for the Norway price to be worthwhile. That is why no one north of Trøndelag has chosen such a solution.
Instead, we pay for the electricity in the south through our taxes.
For the sake of illustration, and to make the point crystal clear.
Sometimes that is necessary to be heard.
If every resident of Norway were to pay the same amount, which is not the case, Northern Norway accounts for just under nine per cent of the population.
Nine per cent of NOK 21 billion is almost NOK 2 billion in subsidies from north to south.
The state picked up the bill
Not to mention what NOK 21 billion would mean for grid capacity and preparedness at the border with Russia.
It took only a few months of case processing before the state picked up the bill for electricity prices in the south.
So far, it has taken 20 years to fix security of supply in the north.
Then perhaps it is some consolation that we can still afford to pay for both hot tubs and air conditioning in the south.
