Norway’s government collapses over EU spat

26 comments

1. If the dude on the right is kicked out of our government, I am celebrating!!!

2. Who the hell votes for parties who DON’T want to “…increase renewable energy and encourage more energy-efficient infrastructure construction…” ?!

   Nah. We prefer less energy efficiency and more polluting practices. Vote for us!

3. Don’t think it matters that much right now, but it is a bit interesting.

   According to polls, Conservatives+Progress will get a majority in the election in september (if nothing major happens). The only question is if they need one extra small party for majority, and if Progress can actually land the Prime Minister role. And Conservatives and Progress disagree about EU, so I’m not sure those negotiations will be easy either.

   Labour has proven they have some semblance of a backbone, but also shown that they can’t keep a stable government as things are now. Ratings are at an all time low. They will have a hard time getting anything done being in a minority.

   The Centre Party are back to being opposition, and can argue and promise freely again. Probably not enough to bring back all the people who fled. They collapsed while being in the government.

4. Any background on this? What’s exactly the debate here?

5. Germany’s insanity is not only damaging its economy, but also sabotaging European integration.

6. I mean if Norway don’t want to be energy exporters Sweden shall “reluctantly” pick up the slack. Please send us all your money Germany.

7. Maybe EU shouldn’t have threatened us to implement policies which are bad for us. The perception we have of eu has never been worse

8. Norway should not compensate for Germanys de-industrialization project.

9. Norway makes a ton of money by selling electricity. So it’s wrong to say that Norway would be paying the price, they make a lot of money by selling electricity.

   But I understand the problem. It is that profits from selling energy goes to energy companies, while average guy mainly sees higher electricity bill. So even if the whole thing it is (and is most likely is), net beneficial economically, it is not for average person.

   And this is probably the thing where the public discussion in Norway mostly is. Its idea that is simple and affects everyone.

   Altough I’m not quite sure how linked this “EU’s fourth clean energy package” is to that. I read the NRK’s and Politico’s articles, but they didn’t specify at all what this is actually about.

10. “Their exit leaves Prime Minister Jonas Gahr Støre’s center-left Labour Party to govern on its own for the first time in 25 years.”

    Oh no that would be terrible.

11. I agree with norway here. As much as I want further european integration, it shouldn’t come at the expense of its citizens. Energy in particular is one of those things you don’t want to mess with, it can easily derail an entire country.

    Next government please.

12. Saying that it’s collapsed is a gross exaggeration. One of the two parties that were in government left over a disagreement on electrical prices caused by Norway selling power to the EU (which in turn has lead to higher electrical prices here).

    Nothing could make a government in our chill little country “collapse”.

13. There has been a lot of discussions about energy and how Germany has made our energy prices volatile.

    I thought it was going to be a big issue in the election in September. However it has already collapsed the government.

    I would go and get popcorn, but I, unfortunately, live in Norway.

14. The government did not collapse, but Senterpartiet moved out of the coalition and is no longer in power.
    Arbeiderpartiet is still in power, but are now on their own and will be until the election.

15. What exactly are the new EU directives? It doesn’t really say in the article.

16. Norway has every right to disagree over the EU energy directives and if it doesn’t want to share its energy, they should.

    But as everything in life, there is a trade off and the EU market is not going to be open to other Norwegian exports.

    You can’t cherry pick which part of the EU Single Market is to your liking, so hopefully not sharing your energy will outweigh the negative trade off of reduced market opportunities.

17. To be honest, I’m not sure it is in Norways best interest to hand energy policy to Brussels.

    Had they done that 20 years ago, there’d probably be no gas in brussels right now.

18. Disclosure. I uploaded 6 peer reviewed papers, most published in 2024, to Claude AI and asked it to explain the cause of Norway’s electricty price increases:

    **Causes of Norway’s Electricity Prices**

    Norway’s electricity market has undergone significant transformation since its early development. While initially focused on providing low-cost hydropower for domestic consumption, the market has evolved into an integrated part of the European energy system.

    This integration, particularly through new transmission cables to Germany and the UK completed in 2021, has fundamentally changed price dynamics in southern Norway. The region has experienced a dramatic increase in electricity prices, with average rates more than quadrupling from 263 NOK/MWh in 2013-2020 to 1192 NOK/MWh in 2020-2023.

    However, it’s important to understand that this price increase isn’t simply a result of companies choosing to export at the expense of domestic consumers. Rather, it reflects the complex interplay of market integration, physical transmission constraints, and broader European energy dynamics.

    Most of Norway’s hydropower capacity remains publicly owned, with municipalities, counties, and the state controlling approximately 90% of production. The price differences between northern and southern Norway primarily stem from limited transmission capacity between these regions, preventing price equalization across the country.

    While southern Norway has become more exposed to European market prices through new interconnectors, northern Norway has remained relatively insulated from these price increases due to these transmission constraints. This regional divergence, rather than artificial scarcity, appears to be the key factor driving price differences within Norway, highlighting the crucial role of infrastructure and market design in determining electricity costs for Norwegian consumers.

    **Policy Solutions for Controlling Electricity Prices**

    Several approaches could help control and reduce electricity prices in Norway, particularly in the southern region. A key solution would be improving internal transmission capacity between northern and southern Norway, which would help equalize prices across regions and reduce southern Norway’s exposure to high European prices.

    The implementation of more sophisticated price support mechanisms could also help – while current schemes offer some protection for residential consumers and businesses, they could be expanded or redesigned to better shield consumers from extreme price spikes. Additionally, since temperature is shown to be the primary driver of consumption patterns, increased investment in energy efficiency measures and alternative heating sources like heat pumps (which 39% of households already use) could help reduce demand during peak price periods.

    The research also suggests that managing electricity exports through the interconnectors to Germany and the UK more strategically, particularly during peak hours, could help reduce price volatility, as these connections have been shown to contribute significantly to extreme price events. However, any such measures would need to balance domestic price stability against Norway’s commitments to supporting European energy transition through its hydropower resources and maintaining the benefits of market integration.

    *I also asked Claude to comment on the Euroskeptic Centre Party’s position on the EEA and Energy Directives. I won’t post, although it sounded well-thought-out. Instead, where’s the mostly factual parts*:

    * Norway has been exporting electricity since 1960, long before EEA membership, and has historically produced more electricity than it consumes (net exports in 23 out of 32 years from 1990-2022).
    * However, since the new interconnectors opened, southern Norway’s electricity prices have more than quadrupled from an average of 263 NOK/MWh (2013-2020) to 1192 NOK/MWh (2020-2023).
    * Not joining the EEA and energy directive would not shut down the interconnects to the UK and Germany

    *It’s also convinced that a major cause of price hikes is the limited interconnection between the south and the rest of the country.*

    **References used:**

    Bendiksen, V. and Løining, L.O.F. 2024. Cross-border and cross-regional electricity transmission: Is there a price impact in south Norway? SSRN, 1–45.

    Do, H.X., Nepal, R., Pham, S.D. and Jamasb, T. 2024. Electricity market crisis in Europe and cross border price effects: A quantile return connectedness analysis. Energy Economics, 135, 107633.

    Hofmann, M. and Lindberg, K.B. 2024. Residential demand response and dynamic electricity contracts with hourly prices: A study of Norwegian households during the 2021/22 energy crisis. Smart Energy, 13, 100126.

    Idsø, J., Nesse, J.G. and Larsen, Ø.H. 2024. The Short-Term Price Elasticity, Temperature Elasticity, and Wind Speed Elasticity of Electricity: A Case Study from Norway. Sustainability, 16, 3321.

    Lyu, C., Do, H.X., Nepal, R. and Jamasb, T. 2024. Volatility spillovers and carbon price in the Nordic wholesale electricity markets. Energy Economics, 134, 107559.

    Sæther, B. and Neumann, A. 2024. The effect of the 2022 energy crisis on electricity markets ashore the North Sea. Energy Economics, 131, 107380.

19. The problem is not the EU, but the greedy companies who rater sell expensive to Europe instead of cheap to Norway. They could simply apply diferent tarifs : one for Europe another for Norway?

20. It’s not a collapse, Labour will now be alone and a lame duck, until next election, after Sp pulls out. Also it’s not really about EU integration (although Sp is anti-EU), it’s about Sp seeing very low support on polls, thus needed to reposition before next election. (For some added context, Sp is traditionally the farmers party).

21. Well I think at this point it is starting to become faster to count the European countries without stable governments than it is to count those with stable ones

22. Putin is loving all these news about collapsing governments in Europe…

23. Norwegian here. Norway’s government hasn’t collapsed. This is bullshit. We’re too vanilla to truly collapse over anything. This is merely an election disagreement, not the end of the country.

24. We are setup for low prices on electricity. Everything runs on electricity. The water heater, stove, cooking top etc. Prices have gone up over 100% the last years. I used to pay 4-50 euros a month. Now I pay 150-250.

25. Individuals receive government support whenever electricity prices get too high. But from my understanding we cannot simply have a max price as that would violate some EU rule(?).

    One reason why this is still a political talling point is that the rules are somewhat complex and people were traumatised by the high prices we did have. Realistically prices are pretty cheap for households though.

    Another concern is about businesses. They also receive gvt support when power peices surge. No idea about how much.

    So it’s kind of a silly thing, but it will garner votes, and that’s why SP pulled out.

26. the Nordic countries are so funny man, cause what do you mean I check up on the parties in the Norwegian parliament, see “Conservatives” and “Progress” with politcal ideologies listed as “centre-right, right-wing populism” and then look deeper and find out that BOTH of them voted in favour of Gay rights to both Marriage and adoption… IN THE TWO-THOUSANDS

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