OSLO Oct 8 Norway's incoming right-wing
government has pledged to end a state monopoly on building power
export cables and to increase local use of Norway's natural gas.
The Conservatives, led by prime minister-designate Erna
Solberg, and their smaller ally, the populist Progress party,
clinched a coalition deal on Monday and are due to take power
Among other agreements on energy policy, the two parties
said they would change the energy law to allow groups other than
the state-owned Statnett to own and operate power
interconnectors between Norway and the rest of Europe.
Countries such as Britain and Germany are keen to connect to
Norway's grid to benefit from its vast hydropower resources to
balance their volatile wind and solar power.
Norway, which belongs to a bigger Nordic power market, is
already linked by undersea cables to the Netherlands and
The outgoing centre-left government had said Statnett should
have a monopoly on interconnections.
The policy change could help to revive plans by a group of
companies including Norwegian utilities Agder Energi
and Lyse to build a link to Britain.
However, the NorthConnect project has already suffered a
setback with the withdrawal of its British partner, the power
While promising more competition in cable building, the
coalition parties said they would "ensure a good balance between
the development of new generation (capacities) and new
Many consumers in Norway fear that an increase in power
export capacities will lead to higher domestic prices as
electricity will flow to more lucrative markets.
To boost the supply, the coalition parties promised to
increase output from renewables, and to speed up licensing of
domestic power cables needed to connect wind farms.
The country already meets about 95 percent of its own needs
from hydropower, but generates less power from wind than its
The incoming government said it would seek to facilitate
increased use of gas in Norwegian industry with the aim of
replacing oil and liquefied petroleum gas, which provide a
better export return, encouraging investment and also improving
the power supply to areas far from hydroelectric plants.
Norway exports nearly all its natural gas to customers in
Britain and continental Europe.
Analysts said that, to make increased gas use in Norway
practical and cost-effective, Solberg's government would have to
open its market to competition, the same way the European Union
(EU) is doing.
Norway is not a member of the EU but has a free trade
agreement with the union, which means it implements directives
"One measure would be to implement the EU's gas market rules
in full, and to set up an independent regulator for gas," said
Dragos Talvescu, an analyst at Oslo-based consultancy Sund
"When you break up the monopoly and introduce price
transparency, it will be easier for industries to consider
alternatives for switching to gas from other fuels."