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Reform will lead to mergers in the utility sector

Lars Erik Maurud   


21 February 2015 

PA energy expert, Lars Erik Maurud, has a byline article published in Finansavisen discussing how mergers will shape the utility market in Norway.

The piece highlights how Norway has almost 130 utility companies – a structure which is too costly for consumers and owners.

Lars Erik says: “15 years ago there were more than 200 utilities in Norway, but since then we have seen a lot of consolidation taking place. Power company Hafslund has led by example and managed to create strong and coherent operations in Oslo, Akershus and Østfold. It now has around 700,000 customers and is a successful example of a utility adjusting its structure.”

Nevertheless, Lars Erik explains, mergers between power companies are moving too slowly. With Norway’s current regulatory model and the owners (municipalities) dragging their feet, the country will have to wait another decade before it gets an appropriate structure.

Lars Erik concludes: “The resistance to merging utility companies often builds on the same arguments we see in similar merger cases of hospitals or child welfare services. However, Hafslund’s customers are treated equally to consumers of companies which are wholly owned by a municipality. The utility also provides Norway's lowest grid tariff and has a very high availability in its network.”

Lars Erik Maurud is an energy expert at PA Consulting Group



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