In a delightful turn of events, market data reveals that electricity was completely free in Norway’s largest cities on Monday. This can be attributed to the abundant rainfall throughout the summer season, which replenishes the hydro reservoirs used for electricity production. Norway’s heavy reliance on hydroelectric power means that the more it rains or snows, the lower the electricity prices become.
The recent “Hans” summer storm, along with consistent rainfall, has significantly filled up the reservoirs in certain areas of Norway. As a result, the spot price of electricity in the capital city Oslo and the second largest city Bergen was expected to range between 0 and -0.3 kroner (-0.03 U.S. cents). Wholesale electricity prices on Europe’s leading power market, Nord Pool, averaged at -1.42 euros per megawatt hour in these cities. This negative price means that electricity companies are actually paying consumers to use their production.
Interestingly, electricity producers have previously stated that it is more cost-effective to continue production even when prices are slightly negative, rather than halt production altogether. Even in parts of the country where the spot price was slightly negative, companies can still profit from green electricity certificates.
Climate experts have linked this excessive rainfall to global warming, which has led to more frequent and intense precipitation in northern Europe. The Norwegian Meteorological Institute reported that August temperatures in Norway were 0.9 degrees Celsius (just under 2 degrees Fahrenheit) higher than usual, with 45% more rainfall than average. One weather station in southern Norway even recorded a staggering 392.7 millimeters (approximately 15.5 inches) of rain in August, which is a 257% increase from the norm.
It is worth noting that this is not the first time electricity prices have turned negative in Norway. A similar situation occurred on August 8 in the aftermath of storm “Hans.” Nevertheless, while the weather may be unusual, it presents an opportunity for consumers to benefit from free electricity.
Overall, Norway’s reliance on hydroelectric power and its response to climate change-induced weather patterns is providing a unique advantage to its residents, who are enjoying the benefits of free electricity.
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