Power exchange has been important for a long time
Norway has had transmission connections to foreign countries since the 1960s, when the first connection to Sweden was built. Today, there are lines to Sweden from Eastern Norway, Central Norway, and Northern Norway. In Northern Norway, there is also a connection to Finland. Sweden and Finland are also interconnected and have their own connections to other countries.
From Southern Norway, subsea connections have been built to Denmark, the Netherlands, Germany, and the United Kingdom. These connections are owned and operated by Statnett together with the partner in the country the connection goes to. In the 1970s, a line was also built between Kirkenes and the Boris Gleb power plant in Russia. Today, there is no activity on this line. In total, Norway has 17 lines or subsea connections to other countries.
Mutual benefit
With an increasing share of intermittent renewable power production in both the Nordic region and the rest of Europe, the benefit of power exchange is increasing. The interconnectors contribute to value creation by increasing the value of Norwegian hydropower through export.
Norwegian power producers are mostly publicly owned, and the surplus therefore returns to Norwegian municipalities and the state. The connections also allow for import in situations where there is a lot of power production in our neighboring countries. This helps to lower power prices and allows Norwegian hydropower producers to save water in their reservoirs for later.
The possibility of importing from other countries is also important to ensure the power supply to Norwegian consumers in years with little precipitation. The interconnectors also facilitate increased production of renewable energy and thus help to achieve climate goals both in Norway and in the countries the connections go to.
Revenue from power trading
Power production and consumption are traded in the bidding area (price area) where the production or consumption takes place. This means that Norwegian power producers sell the power in their respective bidding area at the price that applies there.
The surplus or deficit is balanced through exchange with connected bidding areas where the power is cheapest. The price difference between the areas constitutes so-called congestion revenues.
These revenues are shared between Statnett and the owner of the connection in the country it goes to. The congestion revenues cover expenses that would otherwise have been covered through Statnett's tariffs. In this way, these revenues help to keep Statnett's share of the grid fee down.
Here you can read more about congestion revenues and this year's tariff.