Norway, one of Europe’s top exporters of electricity, may be about to limit power exports. Normally, the country sends about a fifth of its output to its neighbours, but low water levels in southern Norway mean the government says it needs to act now to prevent domestic shortages this winter. Refilling reservoirs will be prioritized over power production when levels fall below seasonal averages, Energy Minister Terje Aasland said on Monday.
With European energy markets in disarray, Norway has put in place an electricity subsidy scheme for households and some businesses, which increased the electricity subsidy for households to 90% from 1 September. But this does not solve the underlying problem. Despite the abundance of hydropower, the centre-left Norwegian government decided on Monday to prioritise replenishing reservoirs when water levels are below seasonal averages. Meanwhile, the Presidency will meet next Tuesday to decide whether it needs to restrict hydropower exports or develop new business models.
Were this to occur, it will pose further challenges to the security of power supply in several countries this winter, including the UK, foreshadowing a tough winter in Europe.
Bloomberg, Financial Times, NRK, VG, VG, Vårt Land
The Storbrännkullen wind farm will be built in the counties of Ragunda, Strömsund, Jämtland and Västernorrland, approximately 100 kilometres from Östersund. The park will be connected to the regional grid of E.ON and is scheduled to be operational by the end of 2023. Neoen intends to sell most of the electricity through a Power Purchase Agreement (PPA), and will maintain 100% ownership of the park for its lifetime and be responsible for its operation. The company is committed to ensuring that the investment benefits the local community and by establishing a fund to benefit the local community, and in addition, Neoen will support local initiatives and contribute to local development.
For Neoen, Storbrännkullen is the first step towards achieving its goal of becoming a leader in the Swedish energy market and playing an active role in supporting the transition to a 100% renewable energy system by 2040. Neoen has been in Sweden since autumn 2020 and today has a fast growing team developing wind, solar and energy storage projects across Sweden.
In December 2020, Hexagon Purus, a hydrogen company, was spun off from the listed Hexagon Composite as an independent company on Euronext Growth. Hexagon Purus' revenue increased by 123% from NOK 94 million in the second quarter of last year to NOK 210 million in the second quarter of 2022. At the same time, operating costs increased to NOK 322 million. Together with depreciation, the operating loss was NOK 135 million, down from a loss of NOK 78 million in the same period last year. The company wrote that the increase in turnover was driven by subsidiary, Wystrach, which contributed NOK 142 million in sales and NOK 14 million in operating profit before tax. The negative earnings were driven by investments in people and infrastructure to enhance the company's future growth. In the second quarter, the company lost an agreement to supply battery packs for electric heavy transport. It is estimated that the agreement would have generated a turnover of more than NOK 7 billion for the company.
The last few days have seen sharp fluctuations in the price of electricity in Finland. On Monday, the price broke a record. According to the electricity exchange Nord Pool, the spot price on the exchange was temporarily €861/MWh from 9-10am. Prices have been falling since the peak, but are still well above the average of recent days. According to analysts, the price rise is due to a rapid fall in wind power generation and annual maintenance to the Loviisa nuclear power plant
Next winter, Finland's electricity system and market will face an unprecedentedly difficult situation that cannot be alleviated as it was before. Olkiluoto 3 reactor is being tested again. The nuclear plant is far behind schedule and its tests are in disarray. Industry representatives, consumers and ministers are hoping that by Christmas at the latest the plant will be operating at full capacity and connected to the grid. The likelihood of success cannot be fully deduced from the tests so far. If the connection is not made, Finland will be in serious trouble, and even if everything works perfectly with Olkiluoto 3, electricity prices will become very expensive in winter.
Russia has accounted for just over half of Finland's energy imports in recent years. In 2020, for example, this share was 53%. Around one third of all Finnish energy have been imported from Russia in one way or another. Now Finland must move away from its dependence on Russian energy. According to estimates by the grid company Fingrid, Finland could become independent of electricity by 2024, as wind energy and the Olkiluoto-3 power plant will provide additional energy in the near future. In the last ten years, wind energy production capacity has increased 16-fold. 10% of electricity is now generated from wind power. As many as 350 wind farms are in the pipeline and some are under construction, making a total of almost 7,300 wind turbines.
Another possible alternative to Russian gas is to buy LNG from other countries. In April 2022, Finland and Estonia announced that they would acquire a joint floating LNG terminal, with the aim of reducing their dependence on Russian gas. However, Finland uses almost half of its energy consumption for industry and has many links with Russia. But industry could also be reformed to reduce energy consumption. The era of Finnish energy imports from Russia could therefore come to an end much sooner.
The Nordic countries are some of the most dynamic and successful economies in the world. They are also leaders in sustainability, from renewable energy, biofuels, carbon capture and storage and the hydrogen economy, circular economy business models and battery development, the Nordics are pioneers in policy design, technology development and consumer uptake. Mundus Nordic Green News is covering this transition for the international community. Every day we curate the stories of most relevance to international businesspeople and policy experts from the flow of news. Mundus Nordic Green Indices summarise the meta-data from our daily coverage to enable easy tracking of trends. We supplement these with our own opinion pieces and commentary.