The winter’s high electricity prices have made extra large inroads into bank accounts and wallets, but without the foreign cables the power would have been even more expensive according to the Norwegian Water Resources and Energy Works (NVE).
In the past couple of months, the average price of electricity has been more than 50 øre per kilowatt hour on the Nordic power exchange wrote Aftenposten newspaper.
NVE has tried to calculate what the electricity prices would have been if we had not had power cables that allow us to export and import from Europe. The answer is that it would have varied more, and could be 2-3 times higher in the winter.
‘’Foreign trade is a safety valve that dampens the price fluctuations. This makes the electricity cheaper than it would otherwise have been, especially during periods of low rainfall followed by cold winter in Norway’’ said senior engineer, Raghav Gogia, of the NVE to the newspaper.
Without the safety valve, the manufacturers would save on the water to be prepared for a year of poor rainfall and possible shortage of electricity he explained.
‘’This saving means less production, which will generally raise prices.’’
In addition, NVE believes that a power system without trading opportunities would lead to the development of reserve capacity to be better equipped for dry years. This would dampen the price fluctuations, but demand billions in development costs.
© NTB Scanpix / #Norway Today