Nordic countries debate energy policy after spikes in power prices

On Thursday, the hourly electricity prices in certain parts of Scandinavia reached record levels. They were tenfold higher in some cases than average, due to cold weather and lower wind power production. This prompted politicians to suggest a change in energy policy.

In Denmark, the price per megawatt-hour (MWh) for an hour starting at 1600 GMT has risen to 936 Euros. South-western Norway and Southern Sweden have seen prices above 700 Euros/MWh.

The German price has also risen due to the unusually low amount of wind and solar energy generation.

Due to the high demand for electricity during cold weather and coupled with gas and oil fired power plants, many European countries rely on these expensive units in order to meet their needs. These are what set prices for all generators.

In a social media post, Swedish Civil Defense Minister Carl-Oskar Bohlin stated: "Let's look at the situation as it is and make the necessary steps in order to produce more planned production in the shortest time possible."

Ebba busch, the Swedish Minister of Energy, said that she had not ruled out compensating households in the event that high prices continued.

She said at a press conference held on Thursday that "this government has promised to stand by the people."

Busch and Swedish Premier Ulf Kristersson both blamed the current problems on the previous government's policy to shut down nuclear power stations in Sweden's south.

Norway relies primarily on hydropower. The country also exports its electricity to Germany and Britain.

Members of the ruling Labour Party in Norway said on Wednesday that they were against granting new licenses for two older cables going to Denmark, which would require replacement after 2027.

The Centre Party, a junior coalition partner in Norway, is also against the renewal of two smaller cables.

Even though Norway shields households from high power prices, the government compensates 90% of the price if it exceeds 70 euros/MWh. However, this does not apply for companies.

The opposition Conservative People's Party in Denmark, which heavily relies on wind and biomass power plants, was prompted by the high costs to call for the lifting of a nuclear ban that has been in effect since 1985. (Reporting and editing by Terje Solsvik and Paul Simao.

(source: Reuters)