Norway’s Wind Power Threatened by Low Energy Prices

Offshore Wind FarmAfter Russia, Norway is the second-largest gas supplier to Europe. Norway is also highly dependent on hydro-power, which is green in its own right. Unfortunately it leaves Norway susceptible to changing weather patterns, specifically rainfall, which push them back toward non-renewables to take up the shortfall.

On the other hand, when the rain is good, power prices drop so low that further energy diversification, such as wind power, isn’t attractive.

Norway’s government is working to provide subsidies to make renewables, such as solar and wind power, more profitable, but still doesn’t have enough money to make it happen. “Without subsidies, (wholesale) power prices need to be around $100 per megawatt-hour to make things fly,” Andreas Aasheim, an advisor to Norway’s wind energy association Norwea said.

At the moment, wind power in Norway costs about $100 per MWh to produce, but even with the subsidy, profits barely squeak past $70 per MWh. If wind projects are going to get off the ground past the 520 MW they had in 2011. By comparison, Norway has about 1,000 MW of non-renewables, and they only expect about 150 MW in the next couple of years.

The government wants to add an additional 5 GW by the end of the decade, with about 50% of that from wind, but the way current pricing is going, it doesn’t seem that they will meet their goal. Green certificates issued just aren’t worth enough to pay for the wind power projects under consideration, and so some major changes are going to be needed if Norway is going to break free from non-renewable energy.

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