IEEE Power & Energy Magazine - September/October 2020 - 33

(blue curve). The positive energy values in the figure indicate
the flow from The Netherlands to Norway, and the negative
values represent the flow from Norway to The Netherlands.
With positive price differences, the price in Norway (Feda) is
higher than the one in The Netherlands (Eemshaven). Negative prices indicate a higher price in The Netherlands than in
Norway. It can be seen from the figure that, more than 80%
of the time, the flow has been southward from Norway to
The Netherlands. But it can also be seen that in 2010-2011,
when there was a dry year in Norway, the average flow was
from The Netherlands to Norway. This clearly demonstrates
how the interconnector strengthened the security of supply
in Norway during this period.
Looking at the past five years, much more variation can
be seen in the flow. This comes as more volatile wind and
solar capacity entered the Dutch and continental European
systems. The figures show average values; if we look at
hourly values, changes in the flow direction can be observed.
The income to the owners of the interconnector comes from
the congestion rent, which is equal to the price difference
between the market areas multiplied by the transmitted volume of energy. The overall socioeconomic benefit from the
interconnector has provided producer and consumer surpluses, in addition to the congestion rent for the owners.
The effect of NorNed on the market can be seen as a
reduction in price spikes, both high and low. In a wet-year
surplus in Norway, energy can be exported, and the prices

will stay higher, giving a producer surplus. In addition,
there will be less water spilled from filled reservoirs. In
The Netherlands, this situation will result in the import of
lower-priced electricity and lead to a consumer surplus.
In a dry year, the flow will go from The Netherlands to
Norway and result a lower price in Norway and, by that, a
consumer surplus. In The Netherlands, a dry year will lead
to a producer surplus.
Figure 7 shows the hydrological balance in the Norwegian hydropower system, in gigawatt-hours, referred to the
normal value together with the day-ahead market price.
The hydrological balance is the sum of the content in the reservoirs, snowpack, and ground water. The figure shows that
during the winter of 2010-2011, there was a very low hydro
balance in the system and that, at the same time, the dayahead price was high. For the years 2014-2017, the hydrological balance was good, and the day-ahead prices were low.

Environmental Impact
For almost all Norwegian hydropower stations of the reservoir type and above a certain size, the station hall is located
within a mountain. This means that the effect on the environment outside these power station installations is limited. On
the other hand, the construction of reservoirs for hydropower
stations implies the building of dams, which will have consequences for the wildlife and the environment in the area
where they are built, during both construction and operation.

0.8
Average Flow (GWh)
0.6

Average Price Difference
20

Average Flow/Week (GWh)

10
0.2
0
1 4 710 1 4 7 10 1 4 710 1 4 7 10 1 4 710 1 4 7 10 1 4 710 1 4 7 10 1 4 7 10 1 4 710 1 4 7 101
2008 2009
2010 2011
2012 2013
2014 2015
2016
2017 2018 2019
-0.2
Year/Month
-10
0

-0.4
-20

Average Price Difference NO-NL

0.4

-0.6
-0.8
-1

-30

-40

figure 6. The average flow per week (gigawatt hour) on NorNed and the average price difference between Norway and
The Netherlands (in euros). Negative values indicate a higher price in The Netherlands than in Norway.
september/october 2020

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