A team of analysts at Volue Insight, led by Tor Reier Lilleholt, created an energy price scenario. This scenario assumes a situation in which Norway does not use the two interconnectors with Great Britain and Germany.
Analysts conducted a pricing scenario simulating a situation in which Norway does not use two interconnections with Great Britain and Germany. The results were then compared to the base case where the cables are fully accessible. This scenario is unlikely and was done mainly to answer a recurring question in the media. This question is, “What if Norway has not built two cables connected to southwestern Norway (NO2)?”
Volue Insight's findings show a much greater impact on interconnections market prices in southern Norway than previously thought, with previous predictions based on simulations conducted before the invasion of Ukraine.
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According to the analyst Volue Insight, this means that electricity prices in Norway would have been 25 percent lower were it not for the interconnections with the UK and Germany. Previous estimates were 10%, but they did not take into account the energy crisis and geopolitical events such as the conflict in Ukraine.
The results therefore seem to indicate a 25% increase in prices that may be due to new cables connected to southern Norway, writes Volue Insight.
Source: Volue Insight
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