Why bother building lithium batteries if certain countries can store their electricity in the mountains? While such a feat is more complex without elevation, Norway has no shortage of it. Dubbed the "battery of Europe," the country began its journey in 1895 with the acquisition of the Paul Foss waterfall to power the rail network. Following numerous operations, the Norwegian government became the largest hydroelectric owner in Europe by 1920. The industrial park now comprises 1,791 plants. In 2025, they generated 157.2 TWh, covering 89.9% of domestic electricity demand. Wind power supplemented this by 8.6%. By comparison, France produced 62.4 TWh of hydroelectricity in 2025, meeting 11.4% of its electricity needs.
(Right: map of hydroelectric facilities in operation; left: untapped areas - Source: NVE)
In addition to being almost 100%-powered by renewable energy, the country can still rely on hundreds of untapped hydroelectric fields. Excluding protected areas (54 TWh annually), the current total potential stands at 23 TWh per year, part of which stems from the modernization of existing facilities. Production could thus increase by 16%. However, while 2025 represented a record year, 2026 is looking more disappointing.
The driest winter in decades
Known by powder enthusiasts for its meters of snow, the country is currently facing a significant water crisis. This winter, despite being the coldest since 2010, saw little snowfall due to a persistent high-pressure system near Greenland. Reserves have dropped to their lowest levels in 20 years, resulting in a 25 TWh deficit according to Tuomo Saloranta, a hydrologist at the NVE (Norwegian Water Resources and Energy Directorate). This represents one-fifth of 2025 production.
Norway typically exports part of its energy surplus to Germany and the UK; however, these exports have fallen by 40% and 50% respectively this year, according to Bloomberg. Although hydroelectricity represents the most reliable green energy, the system "is dependent on weather conditions," says Kari Ekelund Thorud, Vice President of Energy at Norsk Hydro. For the Nordic countries, the consequences of the lack of snow were felt immediately. Energy prices more than quadrupled this winter in Sweden. And as the winter remains cold, consumption remains high.
Extremely poor timing
In addition to a winter unfavorable for electricity production in northern countries, Europe must contend with the crisis in the Middle East, which is driving up gas supply prices. In the UK, despite the drop in Norwegian exports, strong winds have maintained a decent level of renewable energy supply, even if peak hours remain primarily covered by fossil fuels.
The most reliable way to represent the Norwegian deficit is to look at the hydrological balance. This metric estimates the amount of energy present in the snowpack, reservoirs and groundwater compared to seasonal norms. At the end of February, the deficit reached its lowest level since 2011 before improving slightly in recent weeks. Typically, the cost of energy for a Norwegian is nearly half that of a German. However, since this winter, both these prices have been converging, highlighting a significant increase in production costs. Winter is not over yet, and the recent slight improvement in the balance is encouraging for the region. However, it will take more than an isolated rainy episode to resolve the issue.
On the corporate side, Statkraft, Norway's largest utility (generating one-third of the country's output), reported rising results with a 17% increase in operating profit, primarily driven by higher electricity prices. Other sector players such as Hafslund (12%-15% of hydroelectric production), mainly owned by the City of Oslo, or A Energi (8%-10%) are equally benefiting from this surge. Unfortunately, it remains difficult to invest in this market, as the State holds the majority of shares.
