Abstract
Norway is in most parts a mountainous country with ample precipitation and since such regions are thinly populated the exploitation of the hydro resources (which provides 99% of electricity) has been generally coupled with the development of power-intensive industries, e.g. aluminium, ferro alloys, nitrogen fixation, and carbides production.
Investors (many of them foreign) were attracted by cheap power that could be developed on a reasonable scale. Power plant and the industry were initially built as integrated, and isolated, units by private investors. More recently the State and the communities have taken a bigger stake in the development and a common grid that now covers the entire country has been established. Today, less than 20% is privately owned, about 1/3 belonging to the state and the rest split between county and local communities.
Availability of hydro power is subject to variations in precipitation and in addition a large fraction falls as snow (October–April) in the mountains where its potential is highest, but its contribution to the energy supply very small until it has melted. Economically exploitable hydro power in Norway is 170 TWh/year of which 95 TWh/year is fully developed (25 TWh will be exempted because of nature conservation) leaving room for substantial expansion. Although the off/shore oil and gas resources are now at the centre of the Nation's expectations (and, admittedly, these energy resources surpass hydro by some orders of magnitude) hydro power is still vital to the country's development.
Less than 10% of the total is marketed by a ‘Power Pool’ who fix night and day prices and coordinate supply from the power companies. As in most countries, electricity prices are subject not only to cost and market forces, but also to political considerations. Most households and general industry pay 20 øre (ca. 2 UK-p) per kWh (per capita consumption is >20 000 kWh/year), while the large-scale power-intensive industry may have long range contracts at 6–8 øre and even lower. This includes an electricity tax of 2 øre for most users. The Norwegian electricity system is energy dimensioned, the main problem being the collection and storage of water, while it is relatively cheap to supply sufficient power. This points to benefits from cooperation between Swedish nuclear power, Danish coal-fired stations and Norwegian hydro plants (a 500 MW DC-cable connects Denmark and Norway).
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