First: Norway is a really long country. Standing in southern Norway,you’re closer to Italy than you are to northern Norway.

Second, nobody lives in the north. Connecting them to the grid would help a little, but their energy is also cheap because there are not many people up there. It’s not like they produce enough energy to substantially affect the German market.

Third, northern Norway is cold and dark. The few people who live there would die in winter if energy gets expensive.