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ENERGY

EXPLAINED: Why are energy costs soaring in southern Norway? 

Electricity bills for customers in southern Norway are shooting up due to record-high energy prices, leaving a big dent in people's pockets. Here's why. 

EXPLAINED: Why are energy costs soaring in southern Norway? 
Vemork, a hydroelectric plan. Photo by Mark König on Unsplash

The price of electricity in southern Norway has reached the record high level of more than 115 øre per kilowatt-hour

This is more than double the cost of electricity in central and northern Norway, and the rising prices mean that energy bills for consumers in the south could increase by as much as 2,000 kroner per month more compared to last year, according to energy price analyst from Volue Insight, Tor Reier Lilleholt . 

The massive price differences between the north and the south are down to a few factors. Firstly water reservoirs in southern Norway are incredibly low due to a small amount of rainfall over the summer. 

“In the northern and in central Norway, we have water in our reservoirs, while southern parts of the Nordics have very little water,” Trygve Sørås, head of power management at NTE Energy, told public broadcaster NRK

In addition to the lack of rainfall, southern Norway has also exported large amounts of energy to the continent, meaning supply has struggled to meet up with demand.

“The continent is also seeing very high power prices, so some energy has been exported there. Therefore in the south, reserves aren’t as fully stacked,” Sørås said. 

Norway sold a record 5 billion kroner worth of energy to other countries in the first half of 2021, a record for power exports in the country.  

Things are looking much rosier for consumers in central and northern Norway, though. central Norway is benefiting from increased wind and hydro production. This output is expected to continue for the foreseeable future keeping energy prices low throughout the winter in central Norway. 

“If the weather is normal for the time of year, the prices in central Norway will be at this level throughout the winter,” Sørås explained. 

Frustratingly, the south can’t buy any of the surplus power from northern and central Norway. 

“There is little transmission capacity from the north to the south, which means a price bottleneck between the north and south,” energy price analyst from Volue Insight, Tor Reier Lilleholt, explained to the public broadcaster. 

This means southern Norway is forced to buy much more expensive energy from the continent through subterranean cables. 

READ MORE: Norway and UK complete world’s longest underwater sea cable

Lilleholt believes this will exacerbate the issue even further for those in the South, leading to consistently high prices throughout winter. 

“We will also connect to Britain and British prices with a new cable in southern Norway during the autumn. Prices are even higher there than in Germany and the Netherlands, and the UK needs even more power than those countries. This together with a dry autumn could trigger high prices this winter,” he told NRK. 

How to get the best deal

With prices in southern Norway only expected to rise during the winter, getting the best deal possible has never been more important to stop you from feeling the pinch. 

Shopping around isn’t the only tip for getting the best bang for your buck, but also making sure you choose the type of energy agreement that works best for you. 

If you want to find out more, check out our guide to getting the best deal here

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MONEY

How much money do you need to live on a single income in Norway?

Norway is known just as much for its high wages as its steep cost of living, so how much money do you need to live a decent quality of life on a single income?

How much money do you need to live on a single income in Norway?

Depending on your situation, getting by on a single income in Norway can be difficult or relatively straightforward.

This is because if you are the sole provider for a family, you will need to stretch your money further with childcare costs and larger accommodation with extra  bedrooms.

Meanwhile, if you have received a work permit and your partner has a family immigration permit and plans on starting work once they are a bit more settled, then you may not feel as much pressure to get by on a single income as you know more money will be coming in soon.

If you are a single, young professional, you won’t have children to consider, and you could save money by living in a house share rather than your own apartment.

Still, without another person to split the rent and food bill with, you may find it much harder to save for a home in the long term or build up savings.

Earnings

The average monthly wage in Norway in 2023 was 56,360 kroner. Workers covered by collective bargaining agreements are expected to receive an average pay rise in excess of five percent this year.

Immigrants earn less than their Norwegian counterparts, with the average wage among foreign nationals being 50,270 kroner. All wage figures collected from the national data agency Statistics Norway are pre-tax.

Even among foreigners, wages vary. The highest earners among immigrants tend to come from North America and Oceania, while those with the lowest average salaries hail from Africa and countries that joined the EU after 2004.

READ MORE: How much money do Norway’s different foreigners make?

Obviously, there are large differences in earnings between occupations. Foreigners in senior leadership positions had an average pay packet of 74,170 kroner per month, compared to the 38,270 kroner monthly salary of a cleaner.

Those in the top one percent of earners made around 150,000 kroner per month.

Regional differences can affect your needs

Where you choose to live will likely impact how easy it is to get by on a single income. Your location could end up affecting your wage, with those in Oslo earning around 10,000 kroner more than residents in most other counties.

The higher earnings in Oslo are just as well, as according to figures from rental agency Hybel.no, the cost of renting in the capital ranged from 7,535 kroner for a room in a shared flat to 20,483 kroner per month for a 3-room apartment.

In Bergen, the cost of a room was 5,751 kroner each month, while an apartment was 15,119 kroner. The prices in Trondheim and Stavanger were somewhat similar.

If you are living more rurally, you will then need to consider additional costs such as running a car. You may even wish to have a car if you live in a city but have kids to ferry around.

READ ALSO: Can you get by in Norway without a car

What typically goes into a budget in Norway?

Norway’s National Institute for Consumer Research (SIFO) has a calculator that crunches the numbers on how much you can expect to spend in a month before rent and expenses.

Their budget shows a single man aged between 31 and 50 should expect to spend between 12,167 kroner per month. This includes money spent on public transport, groceries, clothing and leisure.

This budget isn’t set in stone because, depending on your hobbies and interests, you may have much higher leisure costs.

Still, when you consider this and the average cost of renting, then a single professional earning close to the average wage should be able to get by either in a studio apartment, renting a room, or in a 1-bedroom apartment.

When earning an average salary of around 56,000 kroner per month, you can expect to take home 40,810 kroner after tax each month.

Things are a bit tighter for a couple aged between 31 and 50 with two young children (one of whom goes to kindergarten). The monthly outgoings for a family in this situation would be 30,474 kroner. The figures include childcare, leisure, personal care, food, and equipment for the kids.

If this family had the same earnings of 56,000 kroner each month or 40,810 kroner after tax, then you may struggle as the budget doesn’t account for rent or mortgage payments.

Without kids, the couple’s monthly outgoings would drop to 20,154 kroner per month, making surviving on the monthly average much more achievable.

How much money do you need for a good life, then?

The average earnings in Norway should allow most people to lead a decent quality of life, depending on their expectations.

Single earners should be able to cover all their essential costs and still have money to save. How much household income is left over will be determined by several factors such as where you live, whether you have children and what kind of expenses you have overall.

Other things, such as how often you want to eat out, go on holiday will affect how comfortable you will be on this salary.

Those with a family to support will have a much harder time of things unless they are earning well above the average wage.

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