Germany’s contemporary Role in Norway’s Energy Politics

Einar Andreassen: I study history at the University of Oslo, Norway. I mostly study modern and ancient international history. In addition I have studied some political sciences and social psychology. I have written articles for the political sciences student magazine Zoon Politicon in Oslo. Besides studying, I run my own parkour coaching business for children.

Norway | June 27, 2020 | Student Essay

Germany has been a topic of a certain public engagement on the Norwegian debate agenda for the last few years, mostly concerning transfers of energy to Germany from Norway’s hydropower energy production. The goal for Norway has been to contribute to the European shift towards clean energy while at the same time the power companies gain an extra income. “Clean energy” meaning what is commonly seen as non-polluting energy production. For Germany the goal seems to have been to reduce dependence on fossil fuels in order to reduce CO2 emissions. This has raised hot debates in Norway. Some Norwegians are sceptical to the idea of selling energy to Germany while they are likely to have to pay more for their otherwise cheap and clean energy.

The idea seems to be that national energy production has to be protected against foreign intervention and ownership. This might be a tradition of thought originating in the final national protection of Norwegian natural resources against foreign intervention. While Norway had some considerable German intervention into its industries during World War Two, the mentality now held by many Norwegians is based in the related conflicts of the early 20th century. Much of industrial technology at the time was imported from Germany, which set some German industry groups in important positions in Norwegian industry and energy production.

The national liberal politics of Norway in the early 1900s and anxieties around dominating foreign investment in natural resources led to a law restricting concessions of natural resources to investors with less than half their capital being foreign. This set the standard for Norway’s more formal attitude towards foreign interest into Norway’s natural resources. The principle is that Norwegian national benefits should be first priority when allowing foreign investment. An example is the exclusive high tax set on oil producing companies in Norwegian waters. Norwegian petroleum tax has been for a long time set at 78 percent, against the ordinary tax at 22 percent.

The situation today is different in that it is not so much about foreign, in this case German, investment as it is about foreign export. German investors seem to want to buy relatively cheap clean energy from Norway in order to reduce Germany’s own less clean energy production, such as coal. Although, part of this is investment in wind farms in Norway for transferrable energy to Germany. Such foreign interest has again provoked different Norwegian organisations, both environmental and liberal, touching on their ideal of national utility of natural resources and sceptical attitude towards wind parks for their environmental impact.

A German Coal Commission published in early 2019 a report recommending that Germany should hasten the phasing out of energy from coal. A consequence of that would be higher prices for power for Norwegian consumers and cheaper power for German consumers. Not strikingly, this has not been received as good news for the national-liberal populations or the environmentally engaged. Those taking it as a positive development has been the more economically oriented politicians.

In this regard, a cable has been laid between the two countries from 2018 to 2020. In 2018 the first 99 kilometres of a power cable called NordLink between Germany and Norway was installed via the coastline. It was to be finished by 2020 and is supposed to work as a two-way green energy transfer. Before 2025, when the German grid is supposed to be able to transmit the surplus power from wind generation in the north to the south more effectively, Norwegians will experience a slight reduction in power prices by importing cheap wind power from Germany. After 2025 they will experience a slight increase. This is according to Norwegian Statnett spokesman Christer Gilje. Statnett is the Norwegian link in the development of the power transmission alongside Dutch-German grid firm TenneT and Germany’s KfE investment bank.

The Norwegian minister of EEA and EU affairs stresses the importance of the close relations between the two countries in solving international issues. In addition to electrical power, Norway shares its gas with Germany. This makes for a certain co-dependence. In a speech of his at an energy conference in Berlin, it becomes clear that the current government in Norway means to continue and expand its sharing of resources with Germany in a European effort to develop sustainable growth and stability.

This case of undesirable, although probably necessary, mixed conflict and partnership does not seem to have put any noticeable strain in German-Norwegian relations. Overall, Germany’s main roles in Norway is as an energy trading partner and international political ally.

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