Norway power grid operator lowers demand outlook, deficit projection

Norway's electricity demand will grow more slowly in the coming years than previously projected as the electrification of industry is moving at a slower pace than had been anticipated, transmission system operator (TSO) Statnett said on Monday.

As a result, the Nordic country is no longer expected to face a power deficit as a whole this decade, although some regions will face a shortage that must be covered via imports, the TSO said.

Norwegian power demand is forecast to rise by a little over 20 terawatt hours (TWh) to 160 TWh by 2029, from around 139 TWh at present, according to the medium scenario of Statnett's latest short-term market analysis.

A year ago, the same scenario forecast demand to hit 163 TWh in 2028.

"The great uncertainty lies in where, how fast and how high consumption will rise," Gunnar Lovas, Statnett's head of markets and system development said in a statement.

By 2029, Norway current 18 TWh annual surplus is now expected to dwindle to 3 TWh, while previous forecasts had warned of shortages from 2027 onward.

Power generation will grow by 6 TWh until 2029, driven by solar and hydropower, with no new wind power capacity amid local opposition to projects, Statnett's analysis showed.

Norway currently relies almost entirely on hydro and onshore wind power, with solar power growing slowly and from a low base. The first offshore wind is only expected from 2030.

Average power prices will be around current levels for the next five years, Lovas predicted, with southern Norway forecast at 50-55 euros per megawatt hour (MWh) in 2029 under Statnett's base scenario.