Oil Report

Norway may limit power exports to preserve hydropower -government

OSLO, Aug 8 (Reuters) - Norway will more tightly regulate its power production and could ultimately limit exports to prevent hydroelectric reservoirs levels from running out of water, the government said on Monday.

Norway relies on hydropower for around 90% of its electricity output, but following a dry winter with relatively little snow, reservoirs in the southern part of the country hold far less water than in average years.

“We need a management mechanism or security mechanism that safeguards national security of supply so that we do not run out of water in our reservoirs,” Minister of Petroleum and Energy Terje Aasland told Reuters.

“We are now introducing a system where, when we come to a situation where the magazine capacity is below what is normal for the time of year and down to a critically low level, there will be a restriction on exports,” he said.

The regulation is still on the drawing board, however, and it was not yet clear where the lower limits of reservoir capacity would be set or how any export restrictions would be managed.

Power producers in southern Norway have already cut output this year to save water for the winter in a bid to avoid a supply crunch. (Reporting by Nora Buli, editing by Terje Solsvik)