Northern Norway has the lowest power price in the Nordics over the last three years, and the lowest estimated future power prices.
The lowest historical power prices
Significantly lower historical power prices (average 2016 - 2018) for Northern Norway compared to selected price areas in the Nordics.
The lowest future power prices
The main reasons that Northern Norway is estimated to have the lowest power prices in the Norway, the Nordics and Europe are:
- Continued oversupply of renewable energy. Additional wind power projects to be constructed in the region.
- Grid export constrains export of the the power southwards. Leads to increased oversupply of production, but it might also limited long-term wind power growth.
- Northern Norway is and will not be connected by interconnectors to high price areas such as UK or Continental Europe. Northern Norway is mainly couple with price areas SE1 and SE2 (Northern Sweden), which is also assumed to have fairly low power prices.
The graph below shows the average estimated power price difference from 2019 – 2038 compared to the average system price in the Nordics, which is the average power prices in the Nordics, assumed by three independent analytics (2H 2018) - SKM, Wattsight and StormGeo Nena.
NVE, the Norwegian Water Resources and Energy Directorate, estimated in their latest annual power market analyses (Oct. 2019) that Northern Norway would have the lowest power prices in Norway and in the Nordics. The Nordics were as a region also assumed to have the lowest power prices in a European comparison. Power prices given in real 2019-prices:
The Nordics offers at the moment a favourable PPA market for consumers as there are more sellers than buyers in the PPA-market due to the fact that the funding side of renewable projects need long-term hedge to receive project financing. Several examples that DC operators have entered into long-term PPAs in the Nordics over the last year.