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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

EXPLAINED: The Norwegian rules on receiving inheritance from abroad

If you're expecting to receive inheritance from abroad, you'll need to be aware of both Norwegian and foreign laws.

EXPLAINED: The Norwegian rules on receiving inheritance from abroad

International citizens residing in Norway who receive inheritance from abroad must navigate complex rules and regulations, so it’s always advisable to contact lawyers specialising in the area.

The inheritance settlement is generally governed by the law of the country where the deceased resided at the time of death. The citizenship of the deceased is, generally, of no importance.

READ MORE: Everything you need to know about estate planning in Norway

This means that if an international citizen in Norway inherits assets from a deceased relative living abroad, the inheritance laws of the deceased’s country of residence will typically apply.

On the other hand, if the deceased had foreign citizenship and was a resident of Norway at the time of his death, Norwegian law would regulate the inheritance settlement.

Although, there are several exceptions to this general rule.

Special cases and will considerations

The Norwegian Supreme Court has previously ruled that heirs residing in Norway who accept inheritance from abroad can be subject to legal actions in Norway, even if inheritance matters were previously decided in another country.

Furthermore, if the deceased lived in a Nordic country but had a closer connection to another Nordic country, the inheritance laws of the latter country may apply.

The deceased may also specify in their will that the inheritance should be settled according to the laws of a particular country.

READ ALSO: What happens when a foreigner in Norway dies?

Some countries accept such stipulations if the will is valid and aligns with the deceased’s nationality or other legal factors.

However, if your case involves any of the circumstances listed above, it’s best to consult a legal expert.

What happens if your spouse dies abroad?

For married people, dividing the deceased’s estate often involves separating it from the surviving spouse’s assets.

This process is usually regulated by the first joint country of residence of the spouses, except for Nordic citizens, where Nordic inheritance rules apply.

The taxes that apply

Good news – Norway abolished inheritance tax for inheritances received from 2014 onwards.

Therefore, heirs residing in Norway do not have to pay Norwegian inheritance tax.

However, the country where the deceased resided may have its own inheritance tax laws, so make sure to consult an expert to determine whether that’s the case.

For example, the Norwegian law firm Codex Advokat Oslo points out on its website that Spanish inheritance tax laws would apply if the deceased resided in Spain, even if the Norwegian heir is governed by Norwegian inheritance laws for the settlement.

For some, wealth tax considerations also come into play. Wealth tax in the country is payable on wealth exceeding 1.7 million kroner per 2023 rules.

Importing inherited items into Norway

If you bring inherited items into Norway, they may be exempt from customs duty and value-added tax (VAT) under certain conditions.

Usually, you’ll be able to avoid these charges if the items were owned and used by the deceased, if the deceased was resident abroad at the time of death or if the heir resides in Norway when receiving the inheritance.

However, you’ll need to apply for customs duty and VAT exemption and submit an application to the Goods Handling Division of the Norwegian Customs Authority (Tolletaten).

You can find more information on the process on the Customs Authority’s webpage. Just remember that the application must be submitted before importing the goods.

Useful resources

A great resource you can use if you have questions about receiving inheritance from abroad while residing in Norway is the Advokatenhjelperdeg.no website, where Norwegian Bar Association lawyers can point you in the right direction – free of charge.

They have a useful database of questions which have already been answered, so it might be a good idea to browse it before asking a new question, as they may have addressed it in the past.

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