Nov. 15 (Bloomberg) -- Norway’s power exports may hit a record this year, amid abundant hydroelectric output and rain, evidencing a need for more cross-border cables for trade, Energy Norway said today.
The country has so far this year shipped a net power glut of 17 terawatt-hours abroad, worth nearly 4 billion Norwegian kroner ($ 694 million) and equivalent to half of yearly domestic electricity use, with exports for the year poised to exceed a record 19 terawatt-hours from 12 years ago, the industry association said in an e-mailed statement.
Norway’s water reservoirs are filled to the brim, and the glut can’t be absorbed by domestic demand, so without exports, the operators of hydropower plants would be forced to spill the surplus into the sea, Oluf Ulseth, chief executive officer of Energy Norway said in the statement.
Running water through turbines provides 99 percent of Norwegian electricity consumption, which exposes it to volatile weather factors, with dry spells triggering power imports and wet periods resulting in exports. This shows a need for more power cables to boost trade with neighboring countries, the association said.
Planned power cables set to link Norway to Germany and the U.K. must benefit the country, and not be used purely for cheap electricity exports, if they are built, Ola Borten Moe, oil minister said on Oct. 18.
The boost in water supplies has benefited the country’s leading hydropower operators, Statkraft AS and Norsk Hydro ASA, while record Swedish water supplies have boosted output for the Nordic region’s biggest utility Vattenfall AB and Finland’s biggest power company Fortum Oyj, both reported last month in their third-quarter earnings statements.
The glut of water supplies has cut average price for day-ahead power in the region by 38 percent from the same period of 2011 this year to a five-year low of 29.92 euros ($38.11) a megawatt-hour in the Nordic market, which covers Norway, Sweden, Denmark and Finland, according to data from the Nord Pool Spot AS exchange in Oslo.
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