Read news from:
Austria
SHARE
COPY LINK

ENERGY

Could Norway take new steps to address high energy prices?

Norway’s Prime Minister Jonas Gahr Støre is under increasing pressure to take additional action on sky-rocketing energy prices.

Published: 3 August 2022 15:57 CEST
Could Norway take new steps to address high energy prices?
A reservoir on northern Norway. The government is considering new responses to high energy prices in the country's south. Photo by Bjørn Kamfjord on Unsplash

Local and national politicians have joined increasing calls for the Norwegian government to take additional action to address high energy prices.

Støre met on Tuesday with Labour mayors to discuss high energy prices. Oil and Energy Minister Terje Aasland also attended the talks, which came after the Labour mayors in Kristiansand and Stavanger criticised the PM and demanded new measures to deal with rising electricity prices. 

“I think we have to accept that this won’t be over anytime soon,” Støre said earlier this week.

“It could take one or two or three years,” he said.

The presidency of Norway’s Storting parliament will meet at the beginning of next week to decide whether lawmakers should be urgently recalled over the issue. 

The Norwegian Confederation of Trade Unions (LO), the PM’s biggest ally outside of the government, has also said that high prices need to be addressed. 

The government has had a subsidy scheme in place since last year that covers 90 percent of the portion of the energy bill where the electricity price was above 70 øre per kWh. The subsidy scheme has been raised from 55 percent and 80 percent of the bill following pressure. 

The PM has ruled out introducing a maximum price, however, a measure which the Conservative Party has also warned against. 

However, the Oil and Energy ministry confirmed to newspaper VG on Wednesday that the government is working on new measures in response to the energy price crisis.

The objective of the government’s work is to be able to present the main features of the new measures by next week, sources told VG.

The newspaper writes that measures relating to energy production at reservoirs and restriction of exports are being considered while financial support for struggling businesses are also being considered as a way to relieve the pressure of high prices.

Electricity prices have continually hit record levels in the southern part of Norway. The Nordic country is part of the common European energy market and has increased cable capacity for exports, with high quantities of energy exported from Norway to Europe in light of the Russian invasion of Ukraine and subsequent breakdown of Russian gas exports to Europe.

Water reservoirs in southwestern Norway are already low following a low rainfall summer in 2021, with that part of the country particularly suffering in the current climate of high prices.

READ ALSO: Norway’s Prime Minister warns that high energy prices could continue for years

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

ENERGY

Why your latest energy bill in Norway was so expensive 

The coldest November in Norway for 13 years triggered a surge in energy consumption, which pushed up prices and led to costly electricity bills for many.

Published: 18 December 2023 11:10 CET
Why your latest energy bill in Norway was so expensive 

The average energy bill for November is expected to exceed 2,000 kroner, according to an energy price index from the energy organisation Fornybar Norge. 

Energy prices in Norway were high across the country, and the average price was high enough in all five energy price regions to trigger government support. The state in Norway covers 90 percent of the energy price that exceeds 70 øre per kilowatt hour. 

The reason for the spike in prices was a colder than typical November, which saw several records broken. Last month was the coldest November for 13 years.

READ ALSO: Could a heat pump be a cheap alternative for keeping your home warm in Norway?

The lower temperatures meant more and more cranked up the heating to keep warm. Energy consumption increased by a third during November compared to the same month a year ago. 

“The reason for the high electricity bills is that winter came early this year. It was bitterly cold for large parts of November, and this has meant that people have used much more electricity to heat their houses. This has led to increased demand for electricity, which in turn has caused electricity prices to rise,” deputy director Bård Standal of Fornybar Norge said. 

Due to the prices triggering support, Fornybar Norge estimated that households in southern Norway received around 640-700 kroner in energy support. Those in central and northern Norway may have received around 300 kroner in support. 

“The electricity subsidy scheme reduces the price consumers pay for electricity and probably also leads to somewhat higher electricity consumption,” Fornybar Norge said. 

Norway is reliant on hydropower to meet the majority of its energy needs. Low precipitation levels also mean that the occupancy rate in hydroelectric reservoirs is lower than the median in recent years. 

“In November, there were several weeks of low temperatures and less precipitation than average. The low temperatures contributed to a large part of the precipitation settling as snow and giving little inflow to the water reservoirs,” the Norwegian Water Resources and Energy Directorate (NVE) said. 

In the winter, energy prices in Norway are likely to fluctuate, according to the NVE. 

“NVE assesses the power situation on an ongoing basis, and at the start of winter the power situation is good. We still expect periods of higher power prices than what we have been used to historically. What the prices will actually be during the winter depends on many factors such as the weather and the gas price,” the NVE said in a report. 

Another factor that affects energy prices in Norway is the export cables that transfer power from Norway to the continent. This also means that when energy prices are high across Europe, they will also be high in Norway. 

Gas prices also affect energy prices in Norway due to the presence of cables. While gas prices are lower than last year, they are still high compared to other years.  

SHOW COMMENTS