On Friday evening, the news came that high electricity prices are causing the solar company to close production from 3 September, writes E24. This is confirmed by Rec Solar manager Jan Enno Bicker to E24 through his press spokesperson on Friday evening. Earlier on Friday, it became known that employees at Rec Solar have received layoff notices – We are sure to start our operations in Norway again, and continue to produce silicon with the world’s lowest carbon footprint, as soon as power prices in Norway normalize, or when the Storting takes measures to better support its clean energy industry, says Bicker to the newspaper. Warns against giving electricity subsidies But if the state gives electricity subsidies, the money can leave the country, warns NHH researcher Ole-Andreas Elvik Næss. – The company belongs to a huge group that is owned by one of the world’s richest men. If you give power support to this company, it goes straight to one of the world’s richest men, he says to news. Until 2021, Rec Solar was owned by China Bluestar. Then Indian Reliance Industries bought the company for NOK 7.5 billion. The group had sales of NOK 950 billion last year, according to the accounts. Half of the shares are owned by Mukesh Ambani, who is the world’s 11th richest person, according to Bloomberg’s billionaire index. – Bad social economy Næss explains how the money can end up on the other side of the globe: – It is then given to the Norwegian part, then it is the owners who decide how the money is to be used. They can decide to move the money up to the owners, or use it in operations. It is always the owners who manage the resources in a company. They take the risk when the company does poorly, and get the money when the company does well. Then it is the owners who get the millions, he says. NHH researcher Ole-Andreas Næss. Photo: Private The government wants to help companies to secure jobs, but has not clarified how the electricity subsidy will be given. If Rec’s electricity bill ends up at NOK 40 million a month on average, and the state takes half the bill, it will mean NOK 240 million in support a year. That amounts to around NOK 1 million per employee, Næss points out. – I think most people understand that the economy is bad. If electricity support is there to help the employees, I think most of the people who work there would rather have a million in their pocket every year than give electricity support to one of the world’s richest men, he says. Rec Solar director Jan Eno Bicker did not respond to news’s inquiries about the matter on Friday. Closures may be necessary The Danish Confederation of Business and Industry has been the driving force behind a separate scheme for companies. – NHO agrees that companies should initially be run at their own expense and risk. We have nevertheless advocated throughout this year for a scheme to help the most vulnerable companies in the most expensive areas because the situation is now extreme, says deputy managing director Anniken Hauglie in NHO. Anniken Hauglie is deputy managing director of NHO. Photo: Hallvard Norum / news Næss generally believes that politicians should avoid giving direct support to companies, and rather offer a form of loan that must be repaid later. – If you give free money, everyone wants money. After the corona crisis, it became clear that many of those who shouted the loudest did well, he says. Economics professor Steinar Holden at UiO also believes that loans are a better solution, partly because electricity subsidies can make the energy crisis worse. – There is a need to reduce the use of electricity. Higher prices are an important mechanism for that, he says to news. He believes that companies have to tolerate fluctuating electricity prices to a greater extent because the energy crisis can last a long time. – Then of course there is a special situation now with a war that can justify special measures, but it is still important to reduce demand, he says, and continues: – There is a shortage of energy. Then it may be a sensible outcome for some companies to close down, says Holden. Economics professor Steinar Holden at the University of Oslo has chaired several public committees, and chaired the committee that advised the Solberg government on crisis support for businesses during the pandemic. Photo: Vidar Ruud Warns against closure NHO, LO and the government met this summer to find out how a scheme could affect vulnerable businesses. – We are sitting these days discussing the layout of the scheme, so I will have to come back to the details, says Hauglie. Holden sees that some companies with little money in circulation may need support, but believes that it will be difficult for the government to find a reliable scheme. – I think it will be very demanding to create a scheme where you give support to a very limited number of companies with a particular need for it, without reinforcing other unfortunate effects, says Holden. – There is no doubt that it is difficult to find an arrangement that takes various considerations into account. We cannot now go into individual examples, but we are naturally keen to get a reasonable and fair arrangement in place, says Hauglie. The government’s electricity dilemma Since the winter, LO associations and the Norwegian Confederation of Business and Industry (NHO) have asked the government to help companies with their electricity bills. But the government has been skeptical because such support could create more headaches than it solves. Among other things, these arguments have been weighed against: The companies can get the money back: Unlike people, the companies have an opportunity to shift parts of the electricity bill to the customers by raising the prices. The companies could “insure” themselves: The companies that use the most electricity and are vulnerable to price fluctuations have had the opportunity to arrange a fixed price for electricity. Legal trouble: A form of state support for companies can be difficult to get approved by the EU, which must ensure that companies do not get unfair advantages in competition with others. But the rules were softened in March and extended this summer as a result of the war, according to the European Commission. The consumption of electricity may increase: The companies may abandon reducing the use of electricity if the government takes part of the bill, so that the water reservoirs are drained more. The disadvantage has also been pointed out by Prime Minister Jonas Gahr Støre as an argument against maximum electricity prices. The interest rate can sting worse: If the companies get billions in electricity aid, Norges Bank can choose to raise the interest rate even faster because the companies get more money to spend than they would otherwise have had. It will also give the companies another expense. Over the course of the year, the price differences between Northern Norway and Southern Norway have grown. Electricity now costs NOK 5 in south-west Norway. In Northern Norway, businesses have almost free electricity. The sky-high gas prices in Europe are affecting Norwegian electricity prices, and are expected to be high for the next couple of years because Russia has cut parts of the supply. In August, Prime Minister Jonas Gahr Støre (Ap) said that the government is working on a solution to help companies.
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– Goes straight to one of the world’s richest men – news Norway – Overview of news from different parts of the country
