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Implications of a deregulated electricity market on three major energy efficiency programs in Norway

Panel: Panel 1. Energy efficiency – a strategic choice for Europe

Authors:
Ingunn Ettestøl, Enova SF
Hans Otto Haaland, Norwegian Research Council
Hans Nilsson, University of Lund

Abstract

The Norwegian electricity market was deregulated in 1990. The liberalized Norwegian electricity market has had a major impact on all of the actors in the energy market. Contrary to the original intention, the liberalization has resulted in the necessity for a more active government policy in the domains of energy efficiency and renewable energy. Empirical analysis has shown that the electricity price in Norway was lowered by the deregulation, even though in 1990 Norway had one of the lowest prices for electricity among OECD countries. The low price has further reduced the price incentives both for energy efficiency and renewable energy in Norway. The lower price is a result of a more intense utilisation of the capacity, which in turn means that the reserve margin for supply has declined. In the end this has implications for the security of supply and could motivate a renewed interest in energy efficiency.

In this paper we evaluate the results from three Norwegian case-studies related to energy efficiency and renewable energy, by applying the IEA-method of Policy Triangulation. The three cases are evaluated by looking into market barriers, market transformation and R&D policies. The cases evaluated include governmental programs related to energy efficiency in the period both before and after the deregulation. The paper assesses the impact of the programmes as they pass through a time of changing policy regimes. The evaluation of the three Norwegian cases gives valuable information on the implementation of technology deployment programmes in a deregulated electricity market. The method of policy triangulation identifies success factors and other relevant characteristics from the cases. The results have important applications for energy policy and program design.

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