OSLO, July 5 (Reuters) - Norway’s electricity prices, usually among the cheapest in Europe, have doubled for the third quarter as a lack of rainfall makes hydropower dam output as costly as German power, the country’s regulator said. Norway’s electricity price for the third quarter was trading at 0.43 crowns ($0.0532) per kilowatt hour (KWh), twice 2017’s level, according to Norway’s water resources and energy directorate (NVE).
That continued a trend of high Norwegian power prices this year, with the spot energy price during spring and early summer also double 2017 levels.
Norway counts on competitive electricity prices to attract international power-hungry investors, who seek low-price regions to build their factories and data centres. The country was also planning three interconnectors to export its cheap power.
But the price is now not as cheap as it used to be.
“The lack of rainfall is the main reason why the price is about twice as high as at the same time last year,” the NVE said in a report. It also corresponds to the cost of producing power from coal, it added.
To add to the lack of rainfall, Norway’s wind power production fell sharply, it added, while consumption in the Nordic countries increased simultaneously.
Norway, which usually exports surpluses during the warmer summer time, is seeing imports exceed exports this summer, the country’s grid said on Wednesday.
Norway’s reservoirs have received rainfall in 2018 that is equivalent to 22 terrawatt hours (TWh) less than a normal year, a shortfall equivalent to the energy needs of 1.1 million households, or half of Norway’s population, it said.
In a separate report produced by the country’s statistics agency SSB on Thursday, May’s power imports grew by 78.1 percent from the same month last year, while exports fell by 28 percent. Total energy production in Norway also declined by 8.7 percent.
Norway’s imported power is coming from Sweden and Denmark, countries that are seeing a wind power production surplus, state-owned grid Statnett said. (Editing by Jan Harvey)