The power system in Norway

At the beginning of 2023, the power supply in Norway had a total installed production capacity of 39 703 MW. In a normal year, Norwegian power plants produce about 156 TWh (source: Electricity production - Norwegian Energy).

The power production per year fluctuates depending on water inflow to the reservoirs. Still, hydropower is the only form of renewable energy production that can be adjusted based on demand. With its combination of stability, flexibility and low production costs, it can make a huge contribution to a sustainable society.

Read more about hydropower in Norway

In addition to hydropower, wind and solar power are growing in Norway. At the beginning of 2023, Norway had 65 wind farms with an installed capacity of 5 073 MW, producing about 16.9 TWh annually, although production varies with the weather. Solar power had a total installed capacity of 299 MW, with over 90 per cent connected to the grid and primarily installed on rooftops for self-consumption (source: Electricity production - Norwegian Energy).

Norway is a member of the International Energy Agency (IEA), which offers an overview to compare electricity generation in different countries.

The Norwegian electricity network is made up of three main categories: transmission (central), regional and local distribution:

• transmission network (400kV-132kV)
• regional distribution network (132kV-33kV)
• local distribution network (22kV-240V)

Statnett is the only Transmission System Operator (TSO) and is responsible for transmission tariffs. There are some 140 network companies (grid operators or DSOs) that own and operate regional distribution and/or distribution networks (source: Network regulation - NVE).

View a map of Norway and its grid companies below.

The process of connecting to the power grid is made up of several steps, from submitting a grid connection request to signing a connection agreement and getting everything else into place to start consuming or producing electricity. Businesses seeking a grid connection in Norway should begin by contacting the local grid owner. If a new project requires more than 300 MW, it may be handled by Statnett directly, but this is determined on a case-by-case basis by Statnett and the regional grid company.

Read more about the grid connection process on the Statnett website.

Businesses in Norway must take into consideration several different cost elements for electricity. The main ones are electricity price, grid rent, electricity tax and potentially a grid connection fee (grid investment contribution).

This is what you pay for your actual electricity consumption and depends on the type of contract you have with your electricity supplier. Some electricity suppliers can offer power purchase agreements (PPA) for 5–10 years or so. In a weather-based power system like Norway’s, the power situation will vary between different parts of the country, and there is not enough capacity in the power grid to equalise the differences in all situations. Therefore, the grid is divided into five price zones.

(image source: Why we have bidding zones | Statnett)

Read more about the weighted average of electricity prices for different industries in Norway on the Statistics Norway website. (Scroll down to Table 2 “Prices on electricity and grid rent excluding taxes, by consumer group”.)

Grid rent is what you pay for the electricity to be supplied to your business. You pay this rent to the grid operator that owns the power grid in your local area. This cost is determined by a regulated tariff model managed by Statnett, which you can read more about here.

Grid rent varies depending on the area, grid balance, your energy consumption and more. To determine the exact expected cost, you must talk to the grid operator for your location in Norway.

Read more about the weighted average of grid rent for different industries in Norway on the Statistics Norway website. (Scroll down to Table 2 “Prices on electricity and grid rent excluding taxes, by consumer group”.)

This fee covers the cost of connecting your business to the electricity grid, including any necessary infrastructure upgrades or extensions. A grid connection fee may not be necessary if your business’s grid connection does not require any infrastructure changes, but often this is the case for power-intensive businesses. The local grid owner handling your grid connection request will inform you of any potential grid connection fees.

A tax is levied on all electric power supplied in Norway with rates set by the Norwegian Tax Administration. In some cases, the end user has the right to an exemption from the excise duty or a reduced rate. It is the grid companies that collect the tax along with the grid rent on a regular basis.

Read more about tax rates and requirements for reduced rates or exemption on the Norwegian Tax Administration website