The Ministry of Petroleum and Energy today presented a White Paper to Parliament on security of electricity supply. The Paper presents the experience from the winter of 2002-2003, and announces a strategy for a more secure energy supply in Norway.

In the autumn of 2002 precipitation in the Nordic countries was very low. The decline in precipitation in relation to average figures equalled nearly 9 per cent of the yearly electricity use in the Nordic market. The resulting decline in production of hydropower led to very high electricity prices during the winter of 2002/2003.

Norway has a high consumption of electricity compared to the other Nordic countries. In addition, hydropower accounts for nearly all the electricity production. These factors make the Norwegian consumption more vulnerable to shortfalls in precipitation than the other Nordic countries.

In the White Paper, the Government emphasizes that the Nordic power market rapidly adapted to the new conditions. This flexibility was connected to:

• hydro power reservoirs acting as a buffer between production and consumption
• idle production capacity being put into use
• increased import into the Nordic countries
• reduced consumption.

The White Paper emphasizes that the energy strategy is based on a well-functioning power market and an active exchange of power between countries. The power exchange market has led to efficiency improvements in the power industry and a better utilization of available resources.

To improve security of power supply it is vital to continue efforts directed towards increased efficiency and flexibility in the market.

- The Nordic power market is important for an efficient use of energy resources, capitalizing on the advantages of a generation system based on both hydro and thermal power, says Einar Steensnæs, Minister of Petroleum and Energy.

The White Paper underlines the importance of improving security of power supply. An action list with ten policy measures is presented. The initiatives are partly directed towards a more robust power supply in the longer term, and partly directed towards an improved management of future situations with precipitation shortfalls.

The ten policy measures:

1. Increased efforts to effect environmentally friendly changes in energy consumption and energy production. A system for stimulating the construction of an infrastructure for district heating
2. Improved rules and regulations for effecting changes in energy consumption and production
3. A strengthened basis for increased hydropower production
4. Development of a common Norwegian – Swedish market for green certificates to increase renewable electricity production
5. Support for an environmentally sound use of natural gas in Norway
6. A strengthened Nordic co-operation on electricity, and facilitation of new interconnectors to other countries
7. Continuous efforts towards an effective competition in the power market
8. Specification of the responsibility of the rationing authority and the system operator. Reserve production capacity might be established.
9. Increased consumer flexibility
10. Strengthening of the consumers' position in the power market.