Europe's news in English

COPY LINK

ENERGY

Norway to scrap gas exploration licences in untapped areas

Norway, Europe's biggest supplier of natural gas, will not grant licences for new exploration in untapped areas from 2025 under a political deal announced on Tuesday.

Published: 29 November 2022 19:45 CET

Pictured is an oil rig.

The government will not grant licenses to search for oil in 2023.Pictured is an oil rig. Photo by Kevin Harris on Unsplash

In talks to pass its 2023 budget proposal, the centre-left minority government agreed to a request from the Socialist Left (SV) party, which has
made the climate a priority.

“SV had this at heart, they prevailed,” Prime Minister Jonas Gahr Store told a press conference.

Since 1965, a mechanism has allowed oil companies to apply for exploration licences in areas of the Norwegian continental shelf that have seen limited or
no exploration.

With the North Sea extensively explored, attention has turned to the Barents Sea in the Arctic, which is likely to contain Norway’s largest remaining hydrocarbon reserves.

The agreement does not rule out the awarding of licences in areas in so-called “mature” zones.

Though the chance of discovering large deposits in these areas is slimmer, they are still attractive to the oil industry because it is easier and cheaper
to develop existing facilities.

Member comments

Log in here to leave a comment.

Become a Member to leave a comment.

Why your latest energy bill in Norway was so expensive

The average energy bill for November is expected to exceed 2,000 kroner, according to an energy price index from the energy organisation Fornybar Norge.

Energy prices in Norway were high across the country, and the average price was high enough in all five energy price regions to trigger government support. The state in Norway covers 90 percent of the energy price that exceeds 70 øre per kilowatt hour.

The reason for the spike in prices was a colder than typical November, which saw several records broken. Last month was the coldest November for 13 years.

READ ALSO: Could a heat pump be a cheap alternative for keeping your home warm in Norway?

The lower temperatures meant more and more cranked up the heating to keep warm. Energy consumption increased by a third during November compared to the same month a year ago.

“The reason for the high electricity bills is that winter came early this year. It was bitterly cold for large parts of November, and this has meant that people have used much more electricity to heat their houses. This has led to increased demand for electricity, which in turn has caused electricity prices to rise,” deputy director Bård Standal of Fornybar Norge said.

Due to the prices triggering support, Fornybar Norge estimated that households in southern Norway received around 640-700 kroner in energy support. Those in central and northern Norway may have received around 300 kroner in support.

“The electricity subsidy scheme reduces the price consumers pay for electricity and probably also leads to somewhat higher electricity consumption,” Fornybar Norge said.

Norway is reliant on hydropower to meet the majority of its energy needs. Low precipitation levels also mean that the occupancy rate in hydroelectric reservoirs is lower than the median in recent years.

“In November, there were several weeks of low temperatures and less precipitation than average. The low temperatures contributed to a large part of the precipitation settling as snow and giving little inflow to the water reservoirs,” the Norwegian Water Resources and Energy Directorate (NVE) said.

In the winter, energy prices in Norway are likely to fluctuate, according to the NVE.

“NVE assesses the power situation on an ongoing basis, and at the start of winter the power situation is good. We still expect periods of higher power prices than what we have been used to historically. What the prices will actually be during the winter depends on many factors such as the weather and the gas price,” the NVE said in a report.

Another factor that affects energy prices in Norway is the export cables that transfer power from Norway to the continent. This also means that when energy prices are high across Europe, they will also be high in Norway.

Gas prices also affect energy prices in Norway due to the presence of cables. While gas prices are lower than last year, they are still high compared to other years.

Url copied to clipboard!