The brilliant idea of selling power where it’s most expensive
It was once a beautiful country with the world’s best energy supply. Hydropower was abundant, with mighty mountains and heavy rainfall, and it was a firm policy that all this should be to the benefit of the country through public ownership and inexpensive access to electric power, both for households and for industry. This is how our prosperity was built.
There were some who had the brilliant idea that instead of distributing all this equally to the population through a sound energy policy and a rational expansion of necessary energy production—but not more—one should instead try to make as much money as possible from it. For those who ended up on the receiving side, there would be millions of crowns times 10 and times 100 and times 1,000, for the production side has no upper limit, and the supply side is insatiable.
In 1990, energy policy was changed from being politically managed according to professional advice to being market-driven, according to advice that wasn’t always easy to know where it was coming from. The objective of the Energy Act was to remain intact, with energy production that was good for society (including transmission, turnover, and distribution), in which affected public and private interests were to be considered.
But now it was the market that was going to control this. That was about 30 years ago. And over the course of these 30 years—gradually, insidiously, imperceptibly—this market mindset has grown to override professional advice and also reality. If the market says it is profitable, then it is also rational. In this way, Haramsøya, Storheia, Øyfjellet, Kjølberget (Finnskogen), Stadlandet, and Tysvær can get a license to build wind power and produce surplus energy for export.
The struggle to conserve the environment from hydropower development put a stop to several large hydropower developments, so there was no more money to be made. But exactly the same areas and even more areas are open to wind power because there are no limits. On the contrary, there is a desire for 10 times more than what has already been built, for both the supply side and the demand side are unlimited. It will always be possible to produce more power, and a world in expansive economic growth at the same time as existing energy production will be phased out, will always hunger for more and more and more of all energy available.
Market thinking is deadly when it comes to critical infrastructure like this. Especially when market players are so cynical and irresponsible. The risk they expose our societies to is enormous. The energy price crisis is already here; we are just scratching the surface of it. It has only just begun to dawn on people what high energy prices will mean, not only for oneself and one’s own private economy, but for business, industry, and the entire economy. Everything is getting more expensive. Profitable companies are becoming unprofitable and are closing down. Jobs are disappearing. It’s a spiral of death.
The politicians appear to be shellshocked and seem completely unable to face the seriousness and risk. They are caught up in the idea that this insane energy policy is necessary for the planet’s climate, as well as that only market-driven energy production and power speculation can reduce emissions. They have great difficulty in orienting themselves to the correct information, especially when it is their friends, networks, and former colleagues who constantly insist that this is the only way to go, it’s the right thing to do, it will get better, it’s a smart thing to do.
Ten percent of our power is now privately owned, and 100% of the privately owned power has been developed since 1990. There are small hydropower plants, and there are wind power plants. They produce 1.5 billion kilowatt-hours (kWh) a year. It will amount to billions when the price [per kWh] reaches 1 krone or more. They’re skimming the cream off the top, when municipal power companies and Statkraft [a hydropower company, fully owned by the Norwegian state] fire up with reminders that the power is publicly owned, so that high power prices benefit “us all.” Check out the company Cloudberry, their portfolio (hydropower and wind power), organization, primary insiders, and company information. Each gigawatt-hour (gWh) of power they produce is millions of kWh and results in millions to distribute to the employees (who are mostly directors) and the owners.
Thus, the crowning achievement. Why sell the power only where it is needed? Why think short-term, environmentally friendly? Some got the brilliant idea that the power could be sold where it is most expensive. Just look at the map of Europe, check the cables, line networks, and electricity prices. See where they pay the most. Call it “price signals,” call it “security of supply,” and then make sure that the politicians decide that cables and lines are built there and that the costs for this are also passed on to the consumers.
That’s where we are now. It is not market thinking, obviously, not a free market, where suppliers compete to produce a product that is in demand and gives customers a choice according to quality and price. This is vital. Like the oxygen we breathe. All power goes into the same network, the consumer has no possibility to choose one producer over the other, no possibility to do without. And the seller can without cost—or at the consumer’s collective expense—transport the product to where they pay the most for it, thus, where there is no abundance, where there is a shortage, and prices everywhere reach the level where they will pay the most.
Translated by Lori Ann Reinhall
This article originally appeared in the Feb. 4, 2022, issue of The Norwegian American.