Sweden has profited from a large disparity in energy prices between the south and the north in Norway, Norwegian public broadcaster NRK reports.
Energy in north Norway is considerably cheaper than in the south, where price records have been broken throughout the summer. Sweden imports cheap energy from north Norway into north Sweden before moving it south and exporting it to south Norway.
“It is often the case that power is exported from northern Norway to northern Sweden and imported from southern Sweden to southern Norway, and lately it has at least been like that,” Ann Myhrer Østenby from the Norwegian Water Resources and Energy Directorate (NVE) told NRK.
Around 80 percent of the energy exported from Norway is from the north, according to figures from the NVE. Power is much cheaper in north Norway because more is produced than can be used, while in the south, reservoirs used in hydroelectric production are extremely low.
“People scream about exports from the south, but it is actually the northern Norwegian power that has been exported,” Tor Reier Lilleholt, energy analysis manager at Volue Insight, told NRK.
Between January and July of this year, 4.51 Terawatt-hours (TWh), or 4.5 trillion watts, were sent from Norway to Sweden, while Sweden exported 3.67 TWh to Norway. Not all of the energy exported into Norway will have originated in the country’s north, though.
Energy from the north is exported rather than directly transferred to parts of Norway where energy is the most expensive domestically because Norway does not have the infrastructure or capacity to move large quantities of electricity from north to south.
Whereas Sweden has a much better energy transmission capacity than Norway, meaning it can import energy from its neighbours, transport it south and then export it back.
Bank Nordea’s investment director Robert Næss told online publication Nettavisen earlier this year that Sweden has made billions of kroner by importing cheap electricity from north Norway and exporting it to the south.
“I arrive at a gross profit of just under 2.3 billion Norwegian kroner, and then they have to hand over around half a billion kroner of this profit to Statnett,” he estimated in May.
If Norway were to build power lines to move power from the north to the south, rather than exporting it to Sweden, it could take up to ten years, and it isn’t clear whether it would equalise prices throughout Norway or stop its neighbours from profiting from price disparity anyway.
“It would probably have a certain effect, but how much depends on many assumptions that are difficult to take into account. It is very complex,” Østenby said.