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Comment by kragen | Hacker News Reader

Does that mean Norway is making a huge amount of money exporting electricity over those interconnections?

Yes. But that is money the consumers don't see.

There are government subsidies for consumers to either have a fixed price or a price cap on electricity in Norway as a political response to the increase. This would be harder to pull off if not most of the profits from export didn’t land in the public sector (either taxes or government owned energy companies).

Norway has experience circumventing the resource curse/Dutch disease with undersea oil. Hopefully they'll manage it this time too.

About 90% of Norway's 40 GW energy production (mostly hydro) is state owned. By exporting energy and thereby getting other countries to pay, the money literally goes to the norwegian people. Not directly into their bank accounts, but into their govt budgets, which they later pay less in taxes.

Do they actually pay less in taxes because of this? I’m not arguing. That is great and I would appreciate if you could provide a source for me to read.

We do not but there's a social consensus about the value people get from this taxation level. However the excess power price which is not a domestic supply/demand outcome is a lot harder to sell.

Right, but people tend to be oblivious to anything that's not on their bank accounts.

i think that doesn't hold true as much in norway and scandinavia in general.

as varjag said: "there's a social consensus about the value people get from this taxation level"

Until it's taken away, of course.

Example, the Netherlands had the biggest gas reserve in forever. It's 2/3rds or 3/4ths empty now and extraction has or is stopping due to it causing earthquakes. But the income from exporting the excess gas has been used for socialist policies. Now that that income is gone, and now that expenses for gas have gone way up (also due to reliance on cheap Russian gas), people are feeling it in their bank accounts directly and the socialist policies are being dismantled one by one.

Norwegian power generation is sized for the domestic market, so tax income from selling excess is marginal at best. The power bills however have indeed crept quite a way up. This was especially noticeable in the first winter of the Russian invasion, when the Nordics had to subsidize the bill that suddenly dropped on short-sighted German energy policy.

Germany benefits a lot from the open market. If only countries introduced a rule to export only the excess of the energy then Germany would be cooked, because prices would sky rocket for them, not 2x, 3x, but way more. Luckily for them they can make strategical mistakes and go away with it making others to pay for that.

Of course countries only export "excess energy". No country cuts power to its own citizens and businesses because they'd rather export it.

"Excess energy" is not a static value. It dynamically depends on price point. Which depends on demand and supply which both depend on price. That dynamic (and circular) interplay is at the core of why economics as a discipline exists in the first place.

Their tax rate is already pretty high. But yes it effectively sponsors their entire energy infrastructure

Only if you compare apples with oranges. Scandinavian taxes are considered high, but they include things like child care, health care, public transportation infrastructure. For people participating in all of those services, the take home pay (as percentage of gross income) ends up not less than in presumably low tax countries.

But incentives to earn more (and thus pay more in taxes!) are still blunted by the high marginal rates.

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