- Norway has decided to cut back on its electricity exports to international customers.
- Norway’s plan has hit the UK, as well as other European countries like Germany, which rely on it for cheap hydropower.
- UK households are set to face a higher energy price cap in October.
UK households may potentially have to pay even higher bills while facing energy shortfalls this winter after receiving a threat from Norway that it will ration its electricity exports. Norway has been providing the UK with hydroelectric power via a subsea interconnector cable which runs under the North Sea. The country has decided to limit its exports as this year Southern Norway has witnesses very low water levels and thus the Norway Government is prioritizing its own citizens over the global customers.
Europe recently experienced a heat wave, and the dry weather has led to the depletion of several water bodies. Reservoirs at Oslo, Norway’s capital, have also depleted and thus its residents have been urged to do things like cutting back on shower time and turning off taps while brushing teeth. Refilling of dams is being prioritized by the Government over producing power when water levels drop less than the seasonal average.
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Norway’s plan has hit the UK, as well as other European countries like Germany, which rely on it for cheap hydropower. The £1.35bn North Sea Link cable connects Norway to the UK. It became effective in October 2021 and is able to channel electricity measuring up to 1.4 gigawatts between the countries when the domestic wind power generation in the UK is low and the demand is soaring. Approximately 5% of the UK homes receive power through this link cable.
Energy bills in the UK have already been hitting the roof and the situation is expected to escalate further ahead of the rough winter. In October, the energy price cap will be raised by Ofgem, which has sparked anger among Brits, pushing them to protest against the energy companies and the Government.
Amid the soaring energy bills and threats of supply cuts, UK investors can keep an eye on the energy stocks suggested by Kalkine Media® which are doing well currently.
EnQuest plc (LON: ENQ)
The shares of the independent business focusing on petroleum production, EnQuest plc, dropped by 2.70% at around 8:00 AM (GMT+1) on Tuesday and were trading at GBX 27.00. With a P/E ratio of 1.68, the market capitalization of the business presently stands at £516.74 million. The EPS of ENQ are positive as of 9 August, at 0.21. The returns provided by the business to its investors on year-to-date and one-year basis are also in the positive territory, at 44.37% and 14.17%, respectively.
Energean plc (LON: ENOG)
The shares of the internationally operating producer of hydrocarbons, Energean plc, dropped by 2.70% at around 8:00 AM (GMT+1) on Tuesday and were trading at GBX 27.00. The market capitalization of the business presently stands at £2,131.14 million and it’s a constituent of the FTSE 250 index. However, the returns provided by the business to its investors on year-to-date and one-year basis are in the positive territory, at 40.00% and 74.36%, respectively.
Hunting plc (LON: HTG)
The shares of the company offering of energy equipment & services, Hunting plc, dropped by 2.70% at around 8:00 AM (GMT+1) on Tuesday and were trading at GBX 27.00. The market cap of HTG stood at £356.27 million. The EPS of HTG stood in negative territory as of 9 August, at -0.53. However, the returns provided by the business to its investors on year-to-date and one-year basis are in the positive territory, at 29.43% and 4.78%, respectively.