Market Trends of Norway Power Industry
This section covers the major market trends shaping the Norway Power Market according to our research experts:
Hydropower Is Expected to Dominate the Market
Hydropower accounts for most of the Norwegian power generation. As of 2021, Norway has around 1660 hydropower plants, which account for 34813 MW of total installed capacity.
So much of Norway's electricity can be generated from hydropower due to the natural advantage of its topography, with abundant steep valleys and rivers. Norway has more than 1000 hydropower storage reservoirs with a total capacity of more than 865 TWh. The 30 largest reservoirs provide about half the storage capacity. Total reservoir capacity corresponds to 70% of annual Norwegian electricity consumption. Norway's largest reservoir, Blåsjø, has a capacity of 7.8 TWh.
Due to the geographic factors and hydro potential, the hydropower sector is expected to continue its dominance in the market studied during the forecast period.
Renewable Potential is Expected to Drive the Market
In Norway, most of the electricity production comes from renewable energy sources. Hydropower is the source of most of the electricity generation in the country. Wind and solar energy also contribute to Norwegian electricity production.
The European Union has committed to increasing the share of renewable energy from 16% to 27% by 2030. Together with the wind, solar energy will account for most of the replacement of fossil fuels. Norway is closely linked to the European energy market.
Production and consumption of energy from renewable sources have been steadily increasing. As of 2021, the generation of renewable in Norway was 154 TWh. There are considerable potential and growth in renewable power generation, and the government expects the total share of renewable power generation to rise in the coming years.
Wind energy has the greatest potential for exploitation in Norway. Wind power accounted for only a relatively modest share of production capacity but dominated investments and held an installed capacity of 4650 MW in 2021. Factors like cheaper energy storage, reduced cost, smart grids, and digitalization drive solar power production. Norway is in the development stage of solar power production. The installed capacity reached 225 MW in 2021.
Hence, a large renewable energy potential, declining costs of renewable energy technologies, and upcoming projects are expected to drive the market studied during the forecast period.
