According to a calculation by the Ministry of Petroleum and Energy, a household in Kristiansand will pay more than NOK 14,700 in electricity costs in the second half of 2022. This is NOK 8,800 more than the average of the last ten years.
In December 2021, the government introduced an electricity subsidy scheme for households and housing companies (co-owners, housing societies, housing limited liability companies, etc.) to curb high electricity prices.
So far in 2022, the state has covered 80 percent of average monthly prices above 70 øre per kilowatt hour.
This week, support increased to 90 percent. It is exclusive of 25 percent VAT. At a spot price of 70 øre, consumer spending is 87.5 øre.
The project is estimated to cost NOK 23 billion until March 2023. The government wrote on its website that the total would be higher due to higher electricity prices than what was based on the calculation.
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The five power zones
Norway is divided into five power zones. The three electricity regions in southern Norway generally have higher electricity prices than central and northern Norway. In 2022, there are new price records in the South.
In a written response to the Progressive Party, Oil and Energy Minister Terje Ösland (AP) comes up with an estimate of how much electricity an average household in southwestern Norway will cost in late 2022.
The calculation is based on an annual consumption of 20,000 kWh, which is the average consumption for a single household:
| NOK/month | 2010-2020 | Without support | After support | Support |
|---|---|---|---|---|
| July | 602 | 3,265 | 1,478 | 80% |
| August | 645 | 5,617 | 2006 | 80% |
| September | 775 | 6,777 | 1 876 | 90% |
| October | 1,020 | 8,890 | 2,461 | 90% |
| November | 1,288 | 11,223 | 3 107 | 90% |
| December | 1,579 | 13,759 | 3,809 | 90% |
| Total electricity bill | 5,913 | 49,531 | 14,739 |
Without the electricity subsidy, the electricity bill would be NOK 49,531, and according to Åsland’s estimate, today’s electricity price is 434 øre per kilowatt hour. With the electricity subsidy, the price is reduced to NOK 14,739.
By comparison, Åsland calculates that the average price for the years 2010-2020 was NOK 5,913 (given 33 øre per kilowatt hour).
Even with electricity support, according to the calculation, a typical household would have to spend approximately NOK 8,800 more than the average over the past ten years. In that case, the bill will increase by almost 2.5 times.
Aasland has also done a secondary calculation where the forward price for the remaining months in 2022 is used as the basis. Electricity bills will be around NOK 7,900 higher in the second half of this year compared to the last decade. The calculation shows.
People can be destroyed
Storage representative Marius Arian Nilsson (Frp) is not impressed with the increased electricity subsidy. He believes Asland’s calculation shows that electricity support is still weak:
– Despite a 90 percent increase in electricity support to more than 70 øre per kilowatt hour, people now pay almost three times more than usual for their electricity.
– The price of electricity is very expensive and comes on top of everything else. This could ruin many people who now have to shell out several thousand kroner a month.
The fear is that the price may be even higher
He further pointed out that the assessment is based on current electricity prices.
– Analysts expect prices to be even higher this winter. So the calculation becomes significantly worse.
Nielsen also points out that current business is particularly serious:
– The price without electricity support, which is almost NOK 50,000 in six months for 20,000 kWh, is what the business pays today.
– What type of system should be introduced?
– Our proposal is a maximum of 50 øre per kilowatt hour, which applies to homes and businesses. In other words, 100 percent compensation for prices above 50 øre per kilowatt hour as long as the electricity crisis lasts.
Keeps the arrangement
State Secretary Andreas Bjelland Eriksson (AP) responds to criticism from the Progress Party on behalf of the Ministry of Oil and Energy.
Erickson emphasizes that the current support program creates a forecast of what electricity bills will look like, while also providing an incentive to save electricity.
– In addition, the government has decided to use part of Statnet’s additional income to reduce network rents for electricity customers in southern Norway. This reduction in online rent will also affect people’s wallets.
read more: Paying up to ten billion to avoid increased net rent
Statistics Norway (SSB) is now reviewing the plan to see if further improvements need to be made.
– We will return to what will be the final calculation in the state budget. But we will continue to take powerful measures as long as the crisis lasts. Now we must also discuss special measures for the most severely affected, Erickson says.
Clean money transfer can be avoided
Regarding electricity support for business, Erickson writes:
– The government is working closely with the working parties to find measures against high electricity prices for certain areas of business in southern Norway. But they have to be targeted and contribute to ensure that these programs protect jobs and don’t end up as a clean cash transfer for business owners, as we saw many examples during the Corona, Erickson concludes.
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