Rising energy prices in Norway: How to get the best deal

The average price of electricity for households in Norway is more than three times higher than the same time last year. Here are The Local's tips for getting the best bang for your buck.

Rising energy prices in Norway: How to get the best deal
Here's our tips for getting the best energy deal in Norway. Photo by Fré Sonneveld on Unsplash

A new analysis and market comparison from data collection firm Statistics Norway has found that the cost of electricity for households excluding taxes and grid rent was 50.9 øre per kWh in the second quarter of 2021. 

This is three times higher than the same period last year. In its quarterly report, the Norwegian Water Resources and Energy Directorate (NVE) emphasised that higher fuel prices in Norway and increasing costs in the European market were behind the rises. 

When considering grid rent and taxes, the average price of electricity in Norway was 116.1 øre kWh.

What type of arrangements offers the best deal? 

Households with fixed-price contracts paid on average the lowest prices for electricity in the second quarter of this year. The cost of a new fixed-price contract that lasts a year or less was around 50.3 øre per kWh when including taxes and fees. This is around roughly half the average that Statistics Norway reported. Surprisingly only 2.5 percent of homes in Norway have a fixed price contract despite the lower prices. 

Those with a new fixed price contract taken up during Q2 that will run for more than a year get a slightly better deal than those with a fixed price contract that will last for a single year or less. 

You’ll be able to see which arrangements cost what in the graph below. 

Electricity prices according to arrangement. Source: Statistics Norway

Due to the rising prices, those with variable contracts, either tied to the spot price or not tied to a spot price, paid more. 

A spot price contract, sometimes called purchase price or market power agreement, is calculated daily by the Nordic power exchange Nord Pool. Under a spot price agreement, customers pay the same price as the electricity supplier but instead pay a surcharge and fixed monthly price to the energy company. 

Tips for getting the best deal?

The best deal isn’t always what looks like the cheapest on paper. For example, fixed-price contracts are traditionally pricier than spot contracts. However, a fixed-price deal can be ideal for many on freelance contracts or who like to work within a budget as you know your monthly energy bill will be the same.

This is vital for many as prices can fluctuate massively between the winter and summer when more energy is needed to heat homes as temperatures plummet into the minuses. 

In addition to this, as prices are expected to rise throughout the rest of 2021 through 2022 following low prices in 2020, it may be best to sign a fixed-term agreement for a year to try and stay ahead of the curve should prices skyrocket in the winter. 

Typically, though, if you don’t need to keep a tighter eye on your outgoings and you’re OK with the idea of the prices varying throughout your contract, then a spot contact could offer the best overall value. 

In most cases, these wind up being cheaper because they pose the least risk to electricity companies profit margins as you are paying the same price they are in addition to the surcharge, which guarantees a profit for the companies. 

Shopping around is also essential wherever you are, and Norway is no different. However, if you want to get the best deal where you are, it’s best to use a comparison site such as strø Comparison sites let you compare the different types of agreements and offer you a price based on where you live, how much energy you use, and your property’s size. Shopping around on comparison sites can save you thousands of kroner a year. 

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Pensions in the EU: What you need to know if you’re moving country

Have you ever wondered what to do with your private pension plan when moving to another European country?

Pensions in the EU: What you need to know if you're moving country

This question will probably have caused some headaches. Fortunately a new private pension product meant to make things easier should soon become available under a new EU regulation that came into effect this week. 

The new pan-European personal pension product (PEPP) will allow savers to take their private pension with them if they move within the European Union.

EU rules so far allowed the aggregation of state pensions and the possibility to carry across borders occupational pensions, which are paid by employers. But the market of private pensions remained fragmented.

The new product is expected to benefit especially young people, who tend to move more frequently across borders, and the self-employed, who might not be covered by other pension schemes. 

According to a survey conducted in 16 countries by Insurance Europe, the organisation representing insurers in Brussels, 38 percent of Europeans do not save for retirement, with a proportion as high as 60 percent in Finland, 57 percent in Spain, 56 percent in France and 55 percent in Italy. 

The groups least likely to have a pension plan are women (42% versus 34% of men), unemployed people (67%), self-employed and part-time workers in the private sector (38%), divorced and singles (44% and 43% respectively), and 18-35 year olds (40%).

“As a complement to public pensions, PEPP caters for the needs of today’s younger generation and allows people to better plan and make provisions for the future,” EU Commissioner for Financial Services Mairead McGuinness said on March 22nd, when new EU rules came into effect. 

The scheme will also allow savers to sign up to a personal pension plan offered by a provider based in another EU country.

Who can sign up?

Under the EU regulation, anyone can sign up to a pan-European personal pension, regardless of their nationality or employment status. 

The scheme is open to people who are employed part-time or full-time, self-employed, in any form of “modern employment”, unemployed or in education. 

The condition is that they are resident in a country of the European Union, Norway, Iceland or Liechtenstein (the European Economic Area). The PEPP will not be available outside these countries, for instance in Switzerland. 

How does it work?

PEPP providers can offer a maximum of six investment options, including a basic one that is low-risk and safeguards the amount invested. The basic PEPP is the default option. Its fees are capped at 1 percent of the accumulated capital per year.

People who move to another EU country can continue to contribute to the same PEPP. Whenever a consumer changes the country of residence, the provider will open a new sub-account for that country. If the provider cannot offer such option, savers have the right to switch provider free of charge.  

As pension products are taxed differently in each state, the applicable taxation will be that of the country of residence and possible tax incentives will only apply to the relevant sub-account. 

Savers who move residence outside the EU cannot continue saving on their PEPP, but they can resume contributions if they return. They would also need to ask advice about the consequences of the move on the way their savings are taxed. 

Pensions can then be paid out in a different location from where the product was purchased. 

Where to start?

Pan-European personal pension products can be offered by authorised banks, insurance companies, pension funds and wealth management firms. 

They are regulated products that can be sold to consumers only after being approved by supervisory authorities. 

As the legislation came into effect this week, only now eligible providers can submit the application for the authorisation of their products. National authorities have then three months to make a decision. So it will still take some time before PEPPs become available on the market. 

When this will happen, the products and their features will be listed in the public register of the European Insurance and Occupational Pensions Authority (EIOPA). 

For more information: 

This article is published in cooperation with Europe Street News, a news outlet about citizens’ rights in the EU and the UK.