Industry Minister Jan Christian Vestre (Ap) today called the Statkraft management to a meeting where he instructed the company and expressed that he “expects them to act aggressively in the competition for fixed price customers”. Statkraft, which is owned by the state, is Norway’s largest power producer. – I want Statkraft, as the state’s one hundred percent owned power company, to be on the ball, says Vestre to news. More concretely, the March order means that Statkraft must lower prices and contribute to making the competition for fixed-price contracts “the best possible”. To news, the ministry points out that the contracts offered by Statkraft cost more than those offered by competitors (see below). These are the prices that annoy the Minister of Industry Statkraft NO1: 3 years: 105 øre; 5 years: 83 øre; 7 years: 70 øre NO2: 3 years: 110 øre; 5 years: 90 øre; 7 years: 77 øre Hafslund NO1: 3 years: 99 øre; 5 years: 79 øre; 7 years: 69 øre Lyse NO2: 3 years: 99 øre; 5 years: 78 øre; 7 years: 68 øre Vest-Telemark kraftlag NO2: 3 years: 89 øre Chairman of Statkraft Thorhild Widvey tells news that they had a good meeting with the Minister of Industry, where they clarified what his expectations are for the company. – We are very keen to deliver on these fixed price contracts. We are determined to be as competitive as possible, and we see that every day, she says. At the same time, she emphasizes that the company must deal with market prices, even if they have an enormous surplus. – We are very much bound by a set of regulations for how the prices are set, so it cannot be mixed up with a surplus that the state has. In a debate article in Finansavisen, Minister of Business and Industry Jan Christian Vestre (Ap) writes that the new fixed-price market for business “is a reality, not an illusion” and that “competition is starting to work”. Photo: Stian Lysberg Solum / NTB Need for more flexible agreements In recent weeks, the Minister of Trade has put political prestige in the fixed-price contracts for business, which were launched at the beginning of December. Since then, the contracts have mostly been slammed and blamed for being “expensive”, “too few” and “stiff”. These are the fixed-price agreements The fixed-price agreements are a response to the contract exception in the ground rent tax that the government opened earlier this autumn. By tying the basic interest tax to the contract price (and not the spot price), long-term electricity contracts have historically been reserved for power-intensive industry, which does not dare to live at the mercy of the spot price. From the new year – at the same time as the energy subsidy scheme expires – the changes in basic interest tax mean that similar long-term contracts will also be available to the rest of the business world. The lowest price provided that the companies commit to a fixed volume of electricity consumption throughout the period, a so-called flat profile. The so-called seasonal profiles, which take account of fluctuations in consumption, are more expensive. There are a total of 355 member companies in Energi Norge. So far, only four players have entered the field. An overview in the newspaper Europower shows that only 127 out of 200,000 Norwegian companies have agreed to the Minister of Industry’s “power fiasco”. Vestre replies that he thinks some business managers are now looking at the situation in order to get as cheap a contract as possible. This is, among other things, because prices are falling, he believes. At the same time, the minister sees the need for more flexible agreements, where companies can sign a contract that is adapted to their consumption. – I have also taken this up with Statkraft today. I expect them to be on the ball there too, says Vestre. To this, the power companies object that they are bound by a “rigid framework”, and that the Ministry of Trade and Industry and the Ministry of Finance are sending “mixed signals”. The Minister of Industry sharpens the tone towards Statkraft. The background is that the fixed price market does not work as the government wishes. Photo: Lise Åserud / NTB A salient point in the debate is what it means that the fixed price agreements must be based on “market-related” considerations. Can, for example, a power company sell fixed-price contracts at 30 øre per kWh if it strengthens their market position? The Progressive Party has demanded an answer to this, initially without getting an answer from the minister. – It is possible to meet the condition of business-related agreements also by staying low, if you believe that it can strengthen earnings in the longer term, says Vestre to news. The Ministry of Finance, for its part, has specified that the companies are not allowed to reduce prices more than what makes “business” sense. – The agreements have received a lot of criticism, undeservedly. Statkraft does not offer fixed-price contracts directly, but sells them via the power companies Fjordkraft and Fortum. In addition, fixed price agreements are offered by Lyse, Hafslund and Å Energi (Entelios). Lyse is today the operator that has entered into the most agreements, but has so far reserved the offer for customers in South-West Norway (NO2). On Friday, the company announced that they are expanding the offer to the whole of southern Norway, through an agreement with Hafslund. The offer includes a fixed price component of 90 percent of consumption. Several have criticized that so far it has not been possible to secure more than 70 per cent of consumption. – We find that customers prefer to only have part of their consumption at a fixed price, but we want it to be up to each individual customer to assess for themselves, says Ane Marte Hausken, managing director of Lyse Energi. She adds that the fixed price agreements have received “a lot of undeserved criticism” in the Norwegian public. – These agreements appear to many as something completely new. In reality, they are copies of the agreements that are used for certain parts of the industry and that have existed for over 30 years. – I would like to bind myself to a fixed price agreement In Balestrand in Sogn, Kviknes hotell has been forced to increase its prices to finance the electricity costs. – If it is possible, and if the price is liveable, then I would like to commit to a fixed price agreement, says hotel director Sigurd Kvikne. The problem is that the power company where he is a customer does not have such an agreement to tempt with. – So far I have not received a single offer, says Kvikne. Now he hopes that the March order from the Ministry of Trade and Industry can stimulate the market. – Yes, we are anxiously waiting. BALESTRAND: The manager of Kvikne’s hotel, Sigurd Kvikne, can well imagine a fixed price agreement. – But so far I haven’t received a single offer, he says. Photo: Kviknes hotel
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The government with marching orders to Statkraft – news Vestland
