Does Norway have cheap electricity?

Norway has traditionally had very cheap electricity where you could use almost as much electricity as you wanted without fearing the bill. But that has all changed after Norway’s electricity export lines skyrocketed the electricity prices back in 2021, and they are now far higher than ever before.

How much does a kilowatt-hour of electricity cost in Norway?

While one kilowatt-hour of electricity cost on average NOK 0.61 in February of 2021 (USD $0.06), it had jumped to NOK 5.43 in August of 2022 (USD $0.55). That’s an almost tenfold increase. Yes, the cost of living is high in Norway, but electricity was always an exception. So, what is happening? Why are the prices so high?

Why are Norway's electricity prices so low?

Historically, Norway has enjoyed relatively low electricity prices, thanks to its extensive hydroelectric power generation, which accounts for nearly 90% of the country’s energy supply. However, this sharp rise in prices is largely due to a shortfall in wind energy from Germany and the North Sea.

Why does Norway have a high electricity consumption?

High electricity consumption in Norway is not just down to low prices, but also to the fact that the country has a cold climate and that most houses are heated with electricity. Read more: Paying for Power: Electricity Bills in Norway Explained

Does Norway need a new energy policy?

Despite its abundant and inexpensive hydroelectric power, Norway’s energy prices have increased domestically when European countries draw on that energy. Norway may have to revert to an old policy and allow those power exports only when its power demand is satisfied to the dissatisfaction of its European neighbors.

Why are electricity prices so high in Sweden and Norway?

Both Sweden and Norway suffer from inadequate internal electricity transmission infrastructure, which results in higher prices in the south—where demand is concentrated—compared to the north, where much of the power is generated. Europe’s shift towards renewable energy sources like solar and wind has faced significant challenges.