Introduction

Domestic pricing of hydropower was for many years an area of direct political control in Norway. After the parliament restricted both domestic and foreign private ownership of waterfalls for hydropower development soon after Norway became an independent country again in 1905, the public sector has been the dominant provider of electricity, at present owning almost 90% of the hydropower capacity. At the municipal level, providing electricity for general purpose consumption, the pricing policy was based on average cost pricing, while the state-owned power stations, feeding the national grid, delivered power mainly to energy-intensive industries like aluminium, ferro alloys, and pulp and paper to very favourable prices. Greenhouse activities are also favourably treated as part of the protective agricultural policy pursued by Norway. The cheap electricity was a main localisation factor for primary aluminium industry because all other raw materials, like aluminium oxide, are imported, and although part of the technology was developed in Norway (the Søderberg anode), the technology is now international.