There have been many stories about bakeries, butchers, dry cleaners and other small businesses that despair of expensive electricity and ask for government support. One of them is Baker Jørgensen in Arendal. – When the current increases so much, it is clear that it affects the entire company, including our employees. It characterizes the working day, said head chef Jan Oddvar Fossnes to news last week. He hopes for a quick support scheme for the business world, but news knows that there is still a long way to go before a solution can be presented. Two weeks ago, the parties in working life and the government met for a crisis meeting about electricity. Today there will be new rounds. Photo: Stian Lysberg Solum / NTB On the same day that electricity prices in southern Norway are expected to set yet another new record, this time at more than four kroner per kilowatt hour on average, the government and the parties in working life gather for a new summit at the Prime Minister’s office. But there are still a number of matters unresolved ahead of the meeting, which starts at 2pm this afternoon. Three central and unanswered questions are who will receive support, how much they will receive and how long the scheme will last. The Progress Party’s leader Sylvi Listhaug believes the government has embarked on an almost impossible task. – It is clear that this is very difficult. They will never find a solution that is optimal, says Listhaug. – Unfairly, the FRP leader believes that the government must work hard to find a good demarcation. – Is it by industry or by how much electricity is used? There are many criteria that can be used as a basis, but common to all of them is that it will turn out to be unfair. I am very worried about the companies that will not be covered by the scheme and am afraid that what comes from the government is far too complex, she says. FRP leader Sylvi Listhaug believes that a support scheme for companies is doomed to turn out unfairly for some. Photo: Javad Parsa / NTB news has spoken to several sources who know the talks about electricity support for the companies well. They confirm that it is a matter of demanding trade-offs. Because in addition to the questions about who will receive support, how much they will receive and how long the scheme will last, the following assessments will be made: * Should the scheme be application-based or automated? * Who will administer the scheme? * Should there be requirements for ENØK measures and must the companies receiving support undertake not to dismiss or lay off employees? * How to avoid electricity support going to dividends or bonuses? The Prime Minister has been clear that such demands will come. 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 part 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 picks up 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. May take time Expectations of a quick solution to the problems are small. Several sources tell news that an arrangement may lie several weeks ahead and will not be hammered into place during today’s summit at the Prime Minister’s office anyway. It is not even certain that the government will have its preferred solution ready for the companies by the time the Storting convenes for an extraordinary meeting on 19 September, according to two different sources who know the process well. Industry Minister Jan Christian Vestre (Ap) says the scheme will be in place “during September”. But he has long been open about the demanding assessments that underlie the work with electricity support for businesses. Industry Minister Jan Christian Vestre (Ap) visited Rec Solar in Kristiansand on Monday. Photo: Hans Erik Weiby / news One of the most important objections to the electricity subsidy scheme for business is that it can quickly send rents even higher. – We are concerned about overheating of the economy, which could contribute to a faster rise in interest rates. It goes directly beyond households, ordinary families and our business life, says Vestre to news. No “quick fix” – We have to be very careful with what we do. If there was a “quick fix” solution we could pull out of our hat, we would of course have done it. But here there are many considerations to take into account, says Vestre. The Minister of Industry says the government is considering a number of possible arrangements for schemes, including pure loans to companies that are struggling. – It is one of several measures we are now looking at, whether some of this can be in the form of loans or guarantees. We are also looking at subsidy schemes that should be able to stimulate energy efficiency and, not least, for companies to develop self-produced energy, says Vestre. The largest opposition party, the Conservative Party, has been calling for an electricity subsidy scheme for business since December last year. Now patience is about to run out. Energy policy spokesperson Nikolai Astrup believes it is entirely possible to find a solution. Høyre’s Nikolai Astrup believes it is not at all impossible to find a good framework for an electricity support scheme for businesses. Photo: Heiko Junge / NTB – Now it is urgent that the government comes to the Storting with a scheme that helps vulnerable businesses. – But how should you define such an arrangement? – It must be limited in particular to the companies that should have hedged against high electricity prices. This means that the large companies fall outside, says Astrup. He says the Conservative Party will help small and medium-sized businesses, where electricity is an important investment factor. – But it is the government that has to do the investigative work, he says. Max price Instead of introducing a separate support scheme for businesses, Sylvi Listhaug and FRP will expand and strengthen the government’s electricity support scheme. In practice, she wants to introduce a maximum price of 50 øre for consumers as well as businesses. The government’s scheme means that from 1 September households will be covered for 90 per cent of the electricity price above 70 øre per kilowatt hour. But as of today, the companies are not covered by such support. Now the FRP wants the state to cover 100 per cent of the bill over 50 øre, also for companies. But during the party leader’s debate in Arendal last week, Finance Minister Trygve Slagsvold Vedum (Sp) warned against schemes which he believes will contribute to driving rents up. Sp leader Trygve Slagsvold Vedum (with his back turned) attacked Sylvi Listhaug during the party leader debate in Arendal last week. He estimated that the FRP’s electricity support measures would cost more than NOK 150 billion and called Listhaug an “economic vaccine opponent”. – In the corona crisis, we received clear advice; take vaccine. That’s what the professionals said, and we did it. Now we get clear advice from the professionals; curb the use of oil money. If not, prices will go up even more, said Vedum. – We do not propose to spend more money, we propose to repay the extra sum you take in, countered the Frp leader. Høyre’s energy policy spokesperson Nikolai Astrup believes the very idea of a maximum price for electricity is unwise. – It is unfortunate to remove the price signal for power, because it helps to ensure that we use energy in the best possible way. The price is high now because there is a shortage of energy in Europe, and these prices are driven by Putin.
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New summit on electricity – here are the problems that must be resolved – news Norway – Overview of news from different parts of the country
