Low power prices cause financial headaches for both power companies and municipalities. 13 years after the then largest wind farm in Northern Norway was completed, it is now completely quiet on Vannøya where the Fakken wind farm in Karlsøy is located.
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Not because of the lack of wind, but for lack of higher power prices.
– Power prices do not justify the costs of operating a wind farm. With historically high levels of filling our reservoirs and a record low power price, it is unprofitable for us to have all of our power plants in operation.
This is what Deputy CEO of Troms Kraft, Erling Dalberg, tells NRK.
The Fakken wind farm currently consists of 18 wind turbines. The facility can supply approximately 7,500 households with electricity.
Wants higher prices
The low power prices have not only led to low revenues for power companies.
At Karlsøy City Hall, power prices are felt in the municipality’s wallet.
– We want equal electricity prices, says Mayor Mona Benjaminsen (Ap).
– So just as expensive as down south?
– It may be something in between, but it must also be profitable for someone to operate.
The municipality has received income from power production in the municipality for several years. This is through property tax and production tax.
The latter is now much less available when prices are low and the turbines are idle.
Stop in development
With an average daily price of a maximum of 8.91 øre/kWh since mid-May in Northern Norway, down from about 20 øre in mid-June, companies are losing money on producing renewable power. The price does not include network rental and fees.
Besides a period of somewhat higher power prices, the wind farm has been virtually idle since April, according to Dalberg.
– When power prices have had a slight uptick, they have produced a little, but for the most part they have remained the same.
The electricity price does not include network rental and fees.
Fakken wind power plant on Vannøya in Karlsøy municipality.
Photo: Frida Marie Flatland / NRK
The low power prices have also led to a halt in the planned development of the Fakken wind farm, where 11 new wind turbines are planned.
– We have worked as far as we need to go in the project before we move on to the next step. It is society’s power needs that determine whether we should invest and build new ones. At the same time, the power price must be high enough for the investments to be profitable, says Dalberg.
The planned expansion will more than double the power production from the plant.
Head of Analysis at Volue Insight, Tor Reier Lilleholt, has previously described the current differences between north and south as extreme.
“In my 25 years in the power market, I have never experienced greater differences between the south and the north. So this is extreme,” he says.
Wet in the north
One of the reasons for the low electricity prices in the north is due to the weather.
In the period from October 2024 to March 2025, there was a record amount of precipitation in Northern Norway.
Something that has filled the water reservoirs to the brim throughout the year.
The rainfall has literally sent potential power, which according to analysts at Salten kraftsamband is worth more than 4 billion kroner , straight into the sea.
Not only could it provide revenue to crisis-stricken municipalities .
It could also reduce the shortage of employees and the large skills gap in Northern Norway.
Some in the region have feared that they are on their way to becoming a “retirement home” and a "commuter district . "
“The solution is to create more industrial jobs, especially in Northern Norway. And to achieve that, we need to expand the electricity grid,” said Elnar Remi Holmen, head of New Renewables at the power company SKS, earlier in September .
