The electricity prices in Europe and Norway have been historically high in 2021. What is the reason for this? Will the increase in electricity prices become the new normal? What measures can we take to reduce energy consumption right now?
How the weather affects electricity prices
The increase in electricity prices is related to the weather. In 2020, there was heavy rainfall in the mountains and good wind conditions, so domestic power production was at a record high. The year was also the warmest ever measured, and we, therefore, used less electricity for heating.
Overproduction of electricity in 2020
The capacity of the cable network that connects us to other European countries was reduced in 2020, so exports of surplus power were considerably low. This resulted in overproduction, which resulted in oversupply. Since supply and demand govern the fluctuations in electricity prices, we had low energy prices in Norway.
Electricity prices in Europe affect Norwegian prices
Many European countries have come a long way in developing wind power and solar parks as energy sources. Still, because there has been little wind and solar cells need cloudless skies, the natural precondition for producing energy has been poor.
Thus, the European power market has been dependent on supplementing with oil, gas and coal as power sources. However, the price of fossil raw materials has skyrocketed. This, combined with a doubling of the CO2 tax on non-renewable power sources, results in high electricity prices in Europe.
How the power cables to Europe affect electricity prices
The first established power cable out of Norway was laid in Sweden in 1960. Since then, we have taken an increasingly larger part in the European power market by connecting with other countries. The cables strengthen the security of supply and direct consumption towards renewable energy sources.
Will the energy prices keep going up?
Read the full article and learn about the energy prices forecast and Measures that provide better predictability in electricity prices
Originally published at https://clevair.io on December 7, 2021.
