Electricity Interconnection and Trade between Norway and Russia

• Author: Maria Madalena das Neves
• Pages: 24-47

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Electricity Interconnection and

Trade between Norway and Russia

Maria Madalena das Neves

Maria Madalena das Neves, LL.M., Research Fellow at the K. G. Jebsen Centre for the

Law of the Sea, Faculty of Law, University of Tromsø – The Arctic University of Norway.

E-mail: maria.m.neves@uit.no.

Received September 2013, accepted December 2013

Abstract: Anticipated industrial growth in northern Norway, particularly of en-

ergy intensive industries such as hydrocarbons and mining, will inevitably result

in increased electricity consumption. Northern Norway faces security of supply

challenges, and substantial investments are needed in generation, transmission

and distribution capacity in order to meet the growing electricity demand. is

makes it advantageous to reinforce the existing cross-border electricity infra-

structure and trade between Norway and Russia. Cross-border interconnections

however are complex, and the controversial debate over Norway’s position on

nuclear power in the Kola Peninsula has created public and political opposition

that could permanently hinder interconnection expansion plans. is article

provides an outline of the existing electricity interconnection and trade between

Norway and Russia and examines the potential for reinforcing those arrange-

ments, as well as the concomitant social, political and legal challenges. It argues

that in spite of nuclear power controversies, there is still room for expanding

the existing interconnection and electricity trade in view of opportunities for

the development of other renewable resources in Russia.

Key words: electricity interconnection, electricity trade, Norway-Russia energy

cooperation

Arctic Review on Law and Politics, vol. 5, 2/2014 pp. 177–200. ISSN 1891-6252

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maria madalena das neves

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1. Introduction

is article examines the potential for reinforcement of electricity interconnection and

trade between Norway and Russia in view of the anticipated industrial growth in north-

ern Norway and the concomitant increase in electricity demand. Investment and devel-

opment in cross-border interconnection however is complex. is article addresses the

inherent social, political and legal challenges – predominantly from Norway’s perspec-

tive. Whilst economic considerations are also essential in the decision-making pro-

cess concerning cross-border interconnection projects, this paper does not purport to

conduct a cost-benet analysis of reinforcing the existing interconnection with Russia.

e establishment of electricity interconnections between neighbouring States

is typically motivated by concerns with security of supply, more specically by the

need to satisfy domestic demand during periods of shortages in generation capac-

ity. A case in point is the electricity interconnection between Norway and Russia

linking Kirkenes in the Finnmark County, and Boris Gleb in the Murmansk Oblast.

e rst steps towards electricity interconnection between Norway and Russia

were taken under the umbrella of a 1957 agreement on the utilization of Pasvik water

power.

1

e construction of the power plant at Boris Gleb and interconnection lines

with Kirkenes was a response to seasonal variations in the availability of hydropower

and power shortages experienced in northern Norway.2 Additionally, the increased

industrialisation experienced at the time in Sydvaranger (Norway) and Nikel (Rus-

sia) also justied the interest of both countries in pooling eorts to utilise the hydro

potential of the Pasvik. It is remarkable that the Pasvik agreement (1957) was signed

and construction of Boris Gleb hydroelectric station and interconnection lines (dur-

ing the 1960s) was undertaken at the height of the Cold War, when Russia and

Norway (as a member of the North Atlantic Treaty Organization) were in opposing

political and military camps. In spite of the Cold War both countries managed to

cooperate on the use of energy resources and cross-border electricity interconnec-

tion and trade, even though such issues are important for national security.3

Norway also has a long history of cooperation with Sweden and Finland to

develop interconnections (discussed in more detail below), which it has continued

to do following the liberalization of energy markets. By contrast, the interconnec-

tion and trade with Russia has seen little development since the initial investment.

1. Agreement between Norway and the Union of Soviet Socialist Republics on the utilization of

water-power on the Pasvik (Paatso) River, Oslo 18 December 1957, United Nations, Treaty Series,

Vol. 312, 1958, No. 4522, p. 257.

2. ‘Northern Norway’ geographically encompasses the counties of Nordland, Troms and Finnmark.

3. Riibe, Sissel and Weyergang-Nielsen, Henning, “Kraoverføringens Kulturminner”, Norges vas-

drags- og energidirektorat, NVE rapport nr.17, 2010, pp. 260–263.

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