Britain depends on Norway for energy. Some Norwegians want to cut us off

Telegraph

23-02-2025

It was a typical, some might say miserable, British winter day: grey, still and biting cold.
As millions of people came home in the early evening on Jan 8, boiled the kettle, made dinner and settled down in front of the TV, the pressure on Britain's electricity system surged.
At the peak of demand around 5.30pm to 6pm, solar panels were sitting idle in the dark and wind farms were generating only an eighth of their maximum output because of a lack of wind.
Had it not been for electricity flowing from countries like Norway, the evening 'would have been a disaster', says Kathryn Porter, of consultancy Watt Logic, threatening a 'cascading blackout'.
'We did come really close,' she says.
Such days are a reminder of how reliant Britain is on the kindness of strangers to keep the lights on and prevent bills from spiralling out of control.
Thick copper cables buried under the seabed are now crucial to the country's energy security. Chief among them is the 450-mile-long interconnector that runs from the English coast to south-west Norway.
'If we weren't able to access it, it would certainly increase prices in Great Britain,' says Tom Edwards, from Cornwall Insight, another energy consultancy.
'It would get tight. The risk would be that prices would spike during cold, dark, still evenings at close to £6,000 a megawatt hour, which is 100 times the normal.'
Norway's sprawling network of interconnectors carries electricity generated by its rivers, waterfalls and dams to homes in countries such as Britain and Germany.
Such cables were once regarded as a hallmark of success in the Nordic nation described as Europe's battery. Yet they have become deeply contentious after the energy crisis.
While they help to lower costs in the countries to which they connect, Norwegians feel they are paying the price through far higher and more volatile bills. It is particularly galling in a country accustomed to cheap and abundant energy.
'Many people are really angry,' says Mímir Kristjánsson, a Red Party MP. 'They feel they have been deceived.'
He represents the region of Rogaland, where the British interconnector resurfaces. It has the highest electricity prices in the country.
'It's about more than money,' says Kristjánsson. 'People just see the situation as really wrong.'
Tensions over the electricity market blew up Norway's two-party coalition last month, leaving the country's Labour Party in charge of a minority government until elections in September.
'We say enough is enough,' Trygve Slagsvold Vedum, the leader of the Centre Party, declared when announcing their exit from government.
'We are doing this to change Norwegian electricity policy and create a dynamic where we can take steps that can give us lower and stable electricity prices in Norway and so we don't give away more power to the EU.'
Norway is one of the world's richest nations. Yet even here cost of living pressures are fuelling a polarised debate. It is not helped by Euroscepticism and the sense that Norwegians are being asked to pay for other countries' energy policy failures.
In December, electricity spot prices briefly hit a 15-year-high, sparking widespread anger.
'A lot of the political parties in Norway are thinking of cutting the cables,' says Eimund Nygaard, the chief executive of power and telecom firm Lyse in Stavanger, a city on the country's southern coast. 'The nationalism we see on this is quite scary.'
In Britain, Ed Miliband, the Energy Secretary, would be wise to pay attention.
'Price infection'
While other European countries race to expand renewable energy, Norway started powering its country from clean hydropower more than a hundred years ago. The country's thousands of fjords, rivers and lakes make it the perfect place to generate electricity from water-powered turbines.
'We have mountains that are flat and not very high compared to the Alps. Therefore we gather a lot of rain and snow high up in the mountains. There are lakes, rivers and waterfalls. We have almost always had cheap electric power,' says Egil Hollund, from the Chamber of Commerce in Stavanger.
While the country exports vast amounts of oil and gas, its own homes and industry are powered by cheap, clean energy. An abundance of power has become ingrained in the national psyche.
'There is this saying: if you go past student halls in the UK, you can easily see where the Norwegian international students are living because they always have the lights on,' Hollund adds.
Hydropower has the added benefit of being more reliable than wind. This abundance of stable, cheap electricity makes the Nordic country a convenient trade partner.
Hollund's office in Stavanger is only about 50 miles as the crow flies from where Britain's interconnector with Norway emerges from the North Sea at Kvilldal, a hydropower plant in Rogaland.
When it became operational in 2021, the interconnector cable was the world's longest. The North Sea Link can power 1.4m homes, carrying 1.4 gigawatts (GW) of electricity between the countries.
It was built by mutual agreement and with investment from both countries. Britain's contract with Norway still has decades left to run and billions have been invested.
The UK has similar links to countries like Denmark, France and Belgium. Within the next decade there may even be one to solar farms in the Moroccan desert.
'We have built out interconnection massively over the last few years. We now have about 10 gigawatts of interconnection. Back in 2010 we only had two and a half gigawatts, so we've quadrupled the amount,' says Shivam Malhotra, an analyst from consultancy LCP.
This radical expansion of the ability to import power has coincided with a shift in national energy policy away from fossil fuels and towards renewable power. As older gas power stations have shut down, Britain has needed a backstop to guard against blackouts as we ramp up wind, solar and nuclear power.
'The interconnection in Great Britain is a necessity at this point,' says Malhotra. 'We've seen that recently over the very tight days in winter. In those periods where there is very little wind, it is very useful for us.'
While the power can flow to either country, Britain is usually the recipient. The imports can prove vital to preventing blackouts or stress on the grid.
Edwards, of Cornwall Insights, says: 'The Norwegian and Danish interconnectors are the single largest sources of import power. 1.4GW on our peak demand is about 3pc. So on a tight day when our margin might only be 5pc or 10pc that can be quite a lot.'
While the imports are gratefully received in Britain, they are viewed very differently by many Norwegians. They call the growing impact of interconnectors on their bills 'pris-smitte' – price infection.
It is not only the British cable that Norwegians must contend with. As net zero gathers pace, countries are getting increasingly interlinked by a growing spider web of copper cables.
As Britain's link to Norway opened, the country also became more closely tied to the German market through a separate cable.
It was just as gas prices were starting to rise. Vladimir Putin was also preparing to invade Ukraine and before long Europe was in the throes of the worst energy crisis in a generation.
The interconnectors, which helped keep the lights on in the UK and Germany, became extremely controversial.
'The two electricity cables that were put into operation in 2021 increased export capacity by 47pc and tied the Norwegian electricity market closely to markets with high and volatile energy prices,' says Gro-Anita Mykjåland, a Centre Party MP and the party's spokesman on energy policy.
'Today, European energy prices clearly have a strong impact on Norwegian prices, particularly in the southern parts of the country. We see that prices in Norway surge significantly when there is, for example, little to no wind in Germany.'
Such frustrations helped pave the way for the coalition imploding last month.
Two interconnectors to Denmark are up for renewal next year. The country's minority Labour Party government has already said it is not inclined to expand the lifespan amid public outrage over prices. New connections are also out of the question.
'We have announced that we won't consider any new interconnectors in the next term of parliament. It's a wise decision with the quite polarised energy debate that we have seen in Europe as a whole and also in Norway,' says Elisabeth Sæther, state secretary in the energy department, the second most senior official in the organisation.
'It's very unfair. I feel betrayed'
Many Norwegians will point to one day in particular as emblematic of all of these issues.
Electricity spot prices hit a 15-year high of 13.16 kr (£0.94) per kilowatt hour on Dec 12 last year, 27 times the average seen in 2019.
Businesses and households in Norway are typically on variable energy contracts, leaving them exposed to such sharp price fluctuations.
Monica Oliversen, the chief executive of Håland Kjøtt, a family-owned butcher business in the small town of Kleppe, near Stavanger, is still shaken by that day.
'You go to work and you just know you're losing money,' she says. 'I can't stop the production. You just have to keep on going.'
Grey, still weather in Germany was a key factor in the spike. A lack of wind power there led to a surge in electricity imports. Britain also imported electricity via the interconnector during peak hours that day.
This sparked anger and frustration in south Norway as prices surged. Terje Aasland, the Norwegian energy minister, had a blunt assessment at the time: 'It's an absolutely s--- situation.'
Businesses in the south of Norway that are reliant on energy for their production, like Håland, are especially exposed to such crises. This is despite being in the vicinity of many of the country's wind farms and largest hydropower stations.
'For us, it's been a struggle,' Oliversen says. 'We had to reduce 5,000 working hours. That is people who have been working here for like 20-30 years. You have to look them in the eye and say, 'Hey, we have to reduce your work time.''
While the government shields households from some of the price rises, businesses are not offered the same support.
Oliversen says her company's annual electricity bill surged from 300,000 kr (£21,342) one year to 1.3m kr the next. It has now finally fallen to 500,000kr.
'It's still unacceptable, because I don't know if I get a [monthly] bill of 20,000kr or 70,000kr,' Oliversen says. 'You cannot budget. And that's crazy because Norway has the electricity.
'It is very unfair. I feel betrayed ... or like somebody is taking me for a fool.'
The country is split into five areas, with energy prices far lower in the north where there are no large interconnectors and fewer people.
The south, by contrast, produces plenty of electricity but also sends large amounts to other countries.
Big energy-intensive businesses based in the south that sell across the whole country face a distinct disadvantage because their bills are so much higher.
The smallest businesses, meanwhile, find it difficult to survive. Olga Tønnessen ran a bakery from home for eight years but was ultimately forced out of business by high energy bills.
'I used to pay maybe 1500kr a month and suddenly it was like 4,000 or 5,000 when I was baking a lot,' she says.
'Unfortunately, I had to increase my prices and because people didn't want to pay I had to stop. It was really tough. It was my baby. I really, really loved it. And I think I was good at it.'
But she adds: 'I work 20 hours on a cake and make nothing. It's not worth it.'
'People feel no one is in control'
Tales of wildly swinging energy bills will be familiar to business owners across Europe. But many Norwegians feel particularly affronted given the country produces far more electricity than it needs.
'It's difficult to understand why the prices have to be that high in Norway when there is no energy crisis in Norway,' says Hollund, from the Chamber of Commerce in Stavanger.
'The average Norwegian struggles to understand why, when we have enough water, do we have to pay three times more because they have a shortage in the UK or Germany?'
Access to cheap hydropower is considered a part of Norwegian identity, says Mímir Kristjánsson, the Red Party MP. The right to generate power from waterfalls, rivers and dams is enshrined as a right for local councils and the Government, with no intervention by foreigners.
Power from waterfalls, rivers and dams is enshrined as a resource that belongs to and must be managed in the best interests of the public thus preventing foreign ownership.
'This is something Norway is really proud of,' he says. 'You get taught that this is how Norway became a rich country. When the oil was discovered, we took the same approach with the state owning it rather than foreign companies. Hydropower is described as the family silver.'
Such strong feelings have made the debate over electricity prices even more explosive. Electricity prices have also risen just as interest rates soared, hitting mortgages in Norway instantly, and the value of the national currency plunged.
Kristjánsson says many people feel there has been a lack of honesty around the impact of the interconnectors.
'The electricity debate is the start of a million conspiracy theories. But there is this genuine feeling at the same time. People were told we would get interconnectors and it would have no impact on the price. Then suddenly they have a very high impact. I think this has damaged trust in politicians in Norway for many years to come.'
When the Norwegian government approved the interconnectors to Germany and the UK in 2014, Statnett, the Norwegian state power company, predicted it would only raise prices marginally by 3-4 øre per kilowatt hour – less than a penny.
Not everyone was convinced. Businessman Øystein Stray Spetalen at the time offered to bet 1bn kr against an energy boss who made a similar claim. It appears he has been vindicated.
'The fact that people have constantly been told these half-truths has created this really angry feeling among people,' Kristjánsson says.
Experts like Nygaard, the chief executive of Lyse, point out that the average prices are now back to 2019 levels when accounting for inflation.
'The big problem now is that even though you can explain this, people just don't accept it. They don't even believe it. People don't accept that in winter time you have these peak prices because they feel insecure. They feel no one is in control,' he says.
'It's more the discussion of what's acceptable for the public than the market. The market really did a good job all over Europe in these difficult years from 2022 to 2024. It handled the situation. People forget this is a physical market.'
For households and businesses struggling to come to terms with fluctuating energy bills, there is little respite ahead.
'I'm trying to be totally open about this. I don't think it will change this. This will be volatile, even more volatile than today,' Nygaard says.
'On very cold days with dunkelflaute [still, dark periods of weather], the prices are going to be extremely high because there is not enough capacity,' he says.
'To prevent blackouts we need to have high pricing to take out consumption. There is no alternative the way it is now.'
Many politicians argue otherwise. They say there is an alternative, with suggestions ranging from large subsidies, renegotiating interconnectors and ceasing all cooperation over energy with the EU. This could effectively take Norway out of the European Economic Area.
Gro-Anita Mykjåland, from the Centre Party, which ended the coalition, warns that without action 'rising energy prices may jeopardise Norwegian industry, especially the competitiveness of the strategically important energy-intensive heavy industry.'
It's only 'prudent' to seek to limit the impact of interconnectors on Norway's market, she says.
'The key is to ensure political control so the cables are mutually beneficial. We can achieve this by renegotiating the agreements that govern power exchange through this cable,' Mykjåland says.
The governing Labour Party has meanwhile surged in the polls after promising a fixed 'Norges pris' for households from October, meaning that regardless of spot prices they'll have the option to always pay the same.
The proposal will cost a cool £818m a year for a country of 5.5m people, analysts estimate, and will undermine incentives to use less power.
Sæther, from the energy ministry, says her party has no intention to turn off the connections to the UK and other countries. 'It's not on the table for us to challenge those agreements,' she says.
'We had interconnectors in Norway from the 1960s. We have a high interconnectivity and that also benefits Norway.
'But of course the political debate is challenging. It's a complex system and easy solutions dominate. My concern is that we will make bad decisions if we don't calm down the debate.'
Looming elections in September are raising the pressure. The Progress Party, which is polling neck-and-neck with Labour, declared as far back as 2021 that 'Norway should not be Europe's battery'.
Tina Bru, a Conservative MP for the region where Britain's interconnector makes land, says the cables have been 'fiscally very good for Norway'.
But she warns: 'If we're not good enough at explaining why we are well served with the system, my fear is it will drive us to eventually make decisions that we are not well served with in the future.'
In Kleppe, Monica Oliversen just wants lower and more stable prices for her family butchers.
'We have to be helpful to other countries,' she says. 'But there has to be compensation for us when the prices are high.'
Kathryn Porter, at Watt-Logic, says the debate playing out in Norway is a sign of what's to come across Europe. The country is 'the [canary in the] coal mine on all of this,' she says.
'While Norway is explicitly saying what it's doing, other people are secretly thinking about it. You can expect that other countries will behave in a similar way, just maybe less openly.'
For now, Britain can rely on its Norwegian neighbours to help keep the lights on in the depths of winter. But as tensions rise across the North Sea, ministers would do well to consider what they would do if the cable was cut.