Electricity prices fall sharply – the government saves billions – news Norway – Overview of news from different parts of the country

In its state budget for 2023, the government estimated that NOK 44.7 billion will be spent on electricity support for people and businesses this year. But since the figure was set early last autumn, the price forecasts have changed drastically. Thus, by all accounts, the electricity subsidy will be far less expensive this year than expected. – I will be careful about predicting what the final prices will be. But it is as you suggest: Many now believe that the prices will be lower in 2023 than what was initially assumed, says Oil and Energy Minister Terje Aasland (Ap) to news. However, the minister will not say anything about how much he thinks the state will save – or how any “surplus” can be used. – I don’t want to do any calculations on that now. It is far too early. We are writing in mid-January. What people should be sure of is that we have a scheme that reduces electricity bills for people when the prices are extremely high, says the minister. Can save 2 out of 3 kroner in electricity support The next time the government can set aside money for more support is in the revised national budget this spring. After a large drop in the price of gas and electricity in Northern Europe, everything is in place for the price of the electricity subsidy to be set lower in 2023, one source tells news. Exactly how much less the power support will cost is unclear. But it is likely that the state will save many, many billions of kroner from lower electricity prices. Energy analyst Tor Reier Lilleholt in Volue Insight says the forecasts for 2023 have fallen dramatically. – The prices are significantly lower now, he says to news. POWER ANALYST: Tor Reier Lilleholt in Volue Insight. Photo: news Lilleholt shows the following figures to illustrate that the forecasts now look completely different: The price estimate for 2023 on 15 September last year was 270 øre per kilowatt hour (kWh). With a flat price, this corresponds to 180 øre in electricity support. Today, the corresponding price is 140 øre per kWh. Then the electricity subsidy will be approximately 60 øre per kWh. So the difference in electricity support is 120 øre per kWh and today only a third of the forecast support in September. Although the forecasts are uncertain and may change, these figures show that the savings for the state will, by all accounts, be in the billions range. The prices are without value added tax, as both power prices and state aid can be calculated both with and without VAT. The government: – Uncertainty around the estimates news has presented Lilleholt’s calculation for the Ministry of Petroleum and Energy. – The estimate of NOK 44.7 billion for 2023 still applies, writes State Secretary Elisabeth Sæther (Ap) in an email. State Secretary Elisabeth Sæther (Ap) in the Ministry of Oil and Energy. Photo: Even Bjøringsøy Johnsen / news An updated estimate may appear in the revised budget in May. – Electricity prices change continuously and will affect the level of the electricity subsidy. There will therefore be uncertainty around the estimates for paid electricity subsidy, regardless of the price it is calculated from and when it is calculated, she says further. Finance Minister Trygve Slagsvold Vedum (Sp). Photo: Aleksandr Nedbaev / news news has also asked Finance Minister Trygve Slagsvold Vedum (Sp) whether the room for maneuver is increased by the drop in electricity prices. – At least it creates more joy. It is very good that some of those arrows also point more in the right direction. When we plan the economic policy, we look a little at the long lines, he says. It is also part of the picture that the state’s income from electricity will be reduced when the price falls. LO top calls for action About a year ago, the government put in place a scheme with electricity subsidies of up to 90 per cent when the electricity price goes over 70 øre per kilowatt hour. But many, not only in the opposition, but also in LO and within the governing parties, now believe that electricity support must be strengthened. – In the very short term, it is necessary to take political measures that can relieve the situation we are in, says Fellesforbundet’s leader Jørn Eggum to news. He asks the government to strengthen the electricity subsidy in order to contribute to getting the spring wage settlement. The business world is also affected by expensive electricity. The government is betting hard on companies signing fixed-price agreements for three, five or seven years to protect themselves against highly variable and high prices. But so far the fixed-price market has not taken off. Recently, Norsk Industri’s leader Stein Lier-Hansen demanded NOK 30-40 billion in electricity support for business. But for now, both NHO and Virke are speaking on deaf ears. The companies have received an electric shock, according to Eggum, who also sits on Ap’s central board. – The way we have it today – without any form of security and predictability for which bills end up in the mailbox – time does not pass, he says. – The fact that you put in place a fixed price market for electricity that works, which makes companies find it interesting, will improve the situation. POWERFUL: Leader of Fellesforbund, Jørn Eggum, together with LO leader Peggy Hessen Følsvik, are important listening posts in the trade union movement for the government. Photo: Patrick da Silva Sæther / news The government’s main argument against changing course vis-à-vis the companies is that it will stress the commitment to a fixed price. Recently, those who live permanently in the cottage were included in the electricity subsidy scheme. But whether ordinary cabin owners also get support is still unclear. – It is a discussion that is ongoing and that many cottagers are interested in, Aasland recently told news. – We believe the most important thing we can do in such a situation as we have been through and are in now is actually to relieve households, ensure that the scheme is good, reliable and reduces people’s electricity bills.



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