General manager Oddbjørn Maurdalen of Furnes Iron Foundry is clear in his speech: – We must have a price that is down to 1 kroner, he says to news. If employees are to be busy melting iron for manhole covers, the electricity cannot cost many kroner. But right now a fixed price for electricity down to NOK 1 per kilowatt hour seems far-fetched in southern Norway. And that situation will last for quite some time, according to Energi Norge CEO Knut Kroepelien. – There will be no cheap electricity sales from 1 January, he states. news has spoken to several actors who doubt that more favorable fixed price agreements will solve the electricity price crisis over the New Year, as the government hopes. The reason is that the price of electricity is likely to be so high in the near future that the power industry will not sell electricity close to the level before the energy crisis, when the market is willing to turn up much more. – Fixed price will not solve the needs of companies in Norway from 1 January. The uncertainty is too great for that with the war in Ukraine and very little water in the reservoirs, says Kroepelien. Managing director of the electricity company Tibber, Edgeir Aksnes, puts it this way: – It seems as if the political parties have been blind to the fact that fixed prices will result in lower prices. That’s not right, it’s a completely wrong premise. Will force the industry The government’s plan is that companies, with the help of a tax change from New Year, will be offered favorable fixed price agreements that will protect them against sudden power shocks. When Industry Minister Jan Christian Vestre (Ap) presented measures for businesses, he referred to this as the government’s main move. – And I have a clear call and challenge to the power producers: Now the competition for regular customers must start, now you must start offering favorable fixed prices to the business community, he said. This is how the government wants to improve access to fixed price agreements In the autumn, the Ministry of Finance held a consultation on a proposal for a new contract exemption from ground rent tax related to fixed price agreements for electricity. In the proposal, it is assumed that the electricity suppliers should be able to offer standardized fixed price agreements to end users with a maximum price mark-up of 0.5 øre on the fixed price the suppliers pay to the power producers, and that prices should be offered for periods of three, five and seven years respectively. This move will make it easier for more households and businesses to gain access to good fixed price agreements and more predictable electricity bills. The government will submit the proposal for a new contract exception related to such fixed price agreements to the Storting during the autumn session 2022 and introduction from 1 January 2023. (Source: Regjeringen.no) And if that does not happen, the Center Party will intervene and use the public ownership power more actively. – It is about the change in ground rent tax in practice taking parts of the electricity price off the stock exchange, says Ole André Myhrvold in the energy and environment committee at the Storting. FORCING: The Center Party’s energy politician Ole André Myhrvold threatens to use ownership power against the power industry if the fixed prices are not low enough. Photo: Vidar Ruud / NTB – If the power companies do not take the political signals now, we as owners – i.e. state and municipality – must use the power of ownership to take a sufficient share of the power from the stock market, he says. – In other words, through the general meetings next year, you use the ownership power to influence this? – Yes, I mean that then the public sector must clearly step in and say that this is not just about the greatest possible profit. You have a social responsibility. As a municipality and state, we must take that social responsibility and order to govern according to something other than the purely market-oriented. He is open to changing the purpose beyond financial return and taking the industry away from “pure market thinking”. Too expensive? The big question is how expensive the electricity will be in the agreements the companies are offered over the New Year. IRON FOUNDRY: General manager Oddbjørn Maurdalen. Photo: Lisbeth Skei / news Maurdalen in Furnes Jernstøperi will therefore have a price down to NOK 1 per kilowatt hour in order to obtain the necessary predictability. – Can your power producer offer it? – Yes, under the right conditions from the government, it is possible, as long as it costs 12 øre to make the electricity, he says. – What does it take? – There must be a dialogue between the power producers and the government which ensures that we are offered a fixed price agreement that is relevant. – Do the power producers have framework conditions for offering a lower price? – As of today, they do not have it. They are very much waiting to see what this ground rent taxation entails. Then we have major challenges between area prices, system prices and withdrawal profiles for different companies. Kroepelien in Energi Norge points out that it is now up to the government to put the framework for the new scheme in place. The proposal has been subject to consultation and will be presented in the autumn, perhaps in the state budget on 6 October. – What was submitted for consultation was not designed in a way that enables the electricity suppliers to deliver this, says Kroepelien. – There is nothing wrong with the scheme itself, but a fixed price cannot do anything about the underlying scarcity of energy. Since we started this work, it has unfortunately only gone the wrong way, both because of the war and the lack of water in the reservoirs, he says. Aksnes in Tibber believes the government has placed far too much emphasis on fixed prices resulting in lower prices. – That is not the case. To buy a fixed price, it really means that you have to gamble on how the future will be, and to be able to do that you have to have a very good idea, he says. – The price will be stable, but not necessarily low. You could get a very low fixed price deal two years ago. But to get one now, you have to enter into an agreement many years in the future.
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Threatens to force cheap electricity to businesses – news Norway – Overview of news from various parts of the country
