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The electricity sector in Norway relies predominantly on hydroelectricity. A significant share of the total electrical production is consumed by national industry.

Production and Consumption
Hydropower generation capacity is around 31 GW in 2014, when 131 TWh was produced; about 95% of total production.

Of the total production in 2011 of 128 TWh; 122 TWh was from hydroelectric plants, 4795 GWh was from thermal power, and 1283 GWh was wind generated. In the same year, the total consumption was 114 TWh. Hydro production can vary 60 TWh between years, depending on amount of precipitation, and the remaining hydro potential is about 34 TWh.

In 2016, the Norwegian government published a “White Paper” regarding their future energy intentions through 2030. This announcement emphasized four main goals:

1) Improving security in the supply of their power

2) Improving the efficiency of their renewables

3) Making their energy more efficient and environmentally and climate sensitive

4) Fostering economic development and value through fiscally responsible and renewable technology

The annual electricity consumption was about 26-27 MWh per inhabitant during 2004-2009 when the European union (EU15) average in 2008 was 7.4 MWh. Norway’s consumption of electricity was over three times higher per person compared to the EU 15 average in 2008. The domestic electricity supply promotes use of electricity,Energy in Sweden, Facts and figures, The Swedish Energy Agency, (in Swedish: Energiläget i siffror), Table: Specific electricity production per inhabitant with breakdown by power source (kWh/person), Source: IEA/OECD 2006 T23, 2007 T25  , 2008 T26  , 2009 T25   and 2010 T49   and it is the most common energy source for heating floors and hot water.

Transmission
Statnett is the transmission system operator in Norway, operating 11,000 km of high power lines. There are plans to upgrade the western grid from 300 to 420 kV at a cost of 8 billion NOK, partly to accommodate cables to Germany and England.

Norway has an open electricity market, integrated with the other Nordic countries. Export and import is routine over the direct power links to Sweden, Denmark, and the Netherlands. The market is handled by NASDAQ OMX Commodities Europe and Nord Pool Spot, and has 5 price zones in Norway. Many of the hydroelectric plants in Norway are easily adjustable and can adapt well to variations in demand, and hence in price, but frequency stability is not satisfactory, and Statnett works with producers to minimize sudden changes in power flow. On a normal day, when price is low during nighttime, Norway normally imports power, and exports during daytime when the price is higher. Maintaining the grid in the harsh Norwegian nature is a compromise between stability desires and economy, and outages are expected in these circumstances. About 70% of the grid is without grounding; called IT-nett.

West of Oslo, there is a small single-phase AC power grid operated with 16.7 Hz frequency for power supply of electric railways, see Electric power supply system of railways in Norway.

Price
In some years, a combination of high power prices in the market and less than usual rainfall renders the power system more vulnerable to power shortages. So far consumers in Norway have noted this by paying a higher price for electrical power during wintertime, however still a low price in international terms. Copious snow- and rain-fall in the mild winters of 2013-15 led to sharply lower prices, which was 26.7 øre per kWh in 2015.

New connections to other countries could stabilize available power levels and reduce price swings, however as these areas are more expensive, average price may rise in Norway. Grid strengthening may cost a few billion kroner.

Mode of production
Hydroelectric power is the main mode of production. Wind power capacity was 838 MW in 2015 and is expected to increase by 1,000 MW by 2020. Norway’s potentials for wind power are excellent and the electricity production usually exceeds national own use. However, Central Norway has a power deficit of 7 TWh per year.

Hydroelectricity
Norway is known for its particular expertise in the development of efficient, environment-friendly hydroelectric power plants. Calls to power Norway principally through hydropower emerged as early as 1892, coming in the form a letter by the former Prime Minister Gunnar Knutsen to parliament. Ninety percent of hydropower capacity is publicly owned and distributed across municipalities, counties, and states. Nationwide installed capacity of hydropower amounted to 33.8 GW in 2015. The maximum working volume of hydrologic storage power plants is 85 TWh, whereas the average seasonal cycle is 42 terawatt-hours (TWh). In 2015, hydroelectricity generated 144 TWh and accounted for 97.9% of the national electricity demand. In European markets, it is the single largest producer of hydropower. According to the IEA, Norway generated 4.3 percent of the worldwide hydropower in 2008 and ranked 6th for that year, behind China, Canada, Brazil, the United States and Russia.

Part of the reason that so much of Norway’s electricity can be generated from hydropower is due to the natural advantage of its topography, with abundant steep valleys and rivers. Due to climate change, the region is currently experiencing heavier rainfall and is projected to receive more in the future, further increasing its capacity for hydropower.

Solar power
The national support for solar power is in place since 2008. For 2013, the European Photovoltaic Industry Association reports a negligible 0.02 watts per inhabitant or less than 0.1 megawatt (MW) of installed photovoltaic capacity in Norway. This is a hundred times less than in Finland (2 watts per inhabitant), two hundred times less than in Sweden (4 watts per inhabitant) and almost five thousand times less than in Denmark (98 watts per inhabitant). However, use of solar power is growing at an accelerated pace; in 2016, installed panel capacity grew by 366%. Proponents indicate that Norway has a surprisingly high capacity for solar energy capture. For instance, records from the city of Narvik show that the region can receive almost as much sunlight as southern Germany. However, this is still just above a third of the solar energy that an area that receives a high amount of solar energy would receive (based on received radiation from Australia.)

Solar companies include Elkem Solar and NorSun. Renewable Energy Corporation REC was a solar power company with headquarters in Norway and Singapore. Elkem Solar was part of Norwegian Elkem. Orkla Group sold it with $2 billion in January 2011 to a Chinese chemical company China National Bluestar head office in Beijing. NorSun is a private solar cell producer.

Other types
Norway has around 3 power plants burning natural gas, depending on how they are counted: Mongstad 280 MW CHP, Kårstø 420MW (now closed), and Tjeldbergodden 150MW (unused). They are rarely used, as hydropower is usually cheaper.

Statkraft experiments with osmosis at Tofte.

Export/Import
Norway has imported up to 10% of its electricity production during 2004-2009. According to IEA the net electricity export was 14 TWh and the hydro power production 141 TWh in 2008.

Norway and Sweden's grids have long been connected. A new 1 GW 420 kV high-voltage link between Nea in Norway and Järpströmmen in Sweden was commissioned in 2009. Beginning in 1977 the Norwegian and Danish grids were connected with 500 MW, growing to 1,700 MW in 2015. Norway's grid is connected with the 700 MW NorNed-cable to the Netherlands. There are plans for cables with Germany (NordLink or NorGer) and the UK (HVDC Norway–Great Britain or Scotland–Norway interconnector).