The economic impact of NorNed on Norway - who benefits? : a welfare analysis
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- Master Thesis 
This thesis assesses the welfare effect of NorNed on the Norwegian society, and distributional issues are also addressed. In doing so we combine traditional welfare theory with theory on international trade and apply a cost-benefit methodology to systematically analyze the welfare effect. To analyze the welfare effect we apply a standard partial equilibrium model on relevant data for the NorNed cable provided us by Statnett for a period from May 2008 to September 2011. The same data is used to calculate a NPV of the NorNed project. We find that NorNed has increased Norwegian welfare in the magnitude of 992 million Norwegian kroner in the period. Norwegian consumers have lost 1 801 MNOK from the introduction of the cable, while Norwegian producers have gained 2 802 MNOK, respectively 703 MNOK for Statnett and 2 099 MNOK for Norwegian electricity producers. The NPV of the NorNed cable is calculated to be 6 000 MNOK over the entire lifetime of the cable.