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What are the knock-on effects of rising energy prices in Norway? 

Frazer Norwell
Frazer Norwell - [email protected] • 13 Oct, 2021 Updated Wed 13 Oct 2021 10:35 CEST
What are the knock-on effects of rising energy prices in Norway? 

Southern Norway has seen record electricity prices throughout the autumn, which are set to continue surging throughout the winter, but what are the knock-on effects of the sky-rocketing energy prices? 


Energy prices have soared due to increased demand, short supply and dwindling water reservoirs in southern Norway. 

This, naturally, will have some knock-on effects that will, directly and indirectly, impact consumers. Below we’ll take a look at some of the ways rising energy prices will affect you. 

Higher bills 

This is the most direct and noticeable knock-on effect of electricity prices going up and also the thing that will have the biggest impact on consumers. 

The majority of households in Norway are on a spot-trade agreement whereby they pay the exact cost for electricity as the supplier does with added taxes and surcharges. 

EXPLAINED: Why are energy costs soaring in southern Norway?

When prices are low or falling, this is the best deal, but when prices are on the up, people on this arrangement will really feel the pinch.

Those on fixed price agreements are more shielded from the steep price rises. 

You can read more on how to shave some kroner off your electricity bill here


Firewood shortages 

Record high electricity prices in southern Norway have led to people beginning to hoard firewood. Wood producers have also said they have been met with overwhelming demand. 

“Demand is very high. Customers are calling all the time,” Arlid Ajer, from firewood company Avigo Birkeland, explained to public broadcaster NRK.

“When it starts to get cold, people panic. And then they have to find the nearest place where they can get firewood,” Arne Dønnestad, a wood salesman in Kristiansand, also told the broadcaster. 

High prices have led to a massive surge in demand for firewood because most people in Norway have a fireplace or furnace, so instead will use that to heat their homes to try and save a few kroner. 

The issue is that when firewood supply can’t meet demand, it means that consumers are left with no choice but to use energy to heat their homes over the cold winter months. 

Potential electricity rationing

Southern Norway’s electricity supplies are dwindling, and unless the country sees a wet autumn to replenish reservoirs, the government could be forced to ration electricity. 


There are two ways this can be done. Firstly, there’s quota rationing, where households are given electricity allowances, and any energy used over this amount is charged at excessively high prices as a deterrent. 

If wood is still scarce and quota rationing is introduced, then consumers may be left with no alternative but to bite the bullet and pay the massive surcharge prices, which could be ruinous for those on lower incomes. 

READ MORE: Could Norway be forced to ration electricity, and what would that mean for you?

If the quota rotation doesn’t work, then controlled outages will be used. The outages will rotate between areas at designated times. This is a last resort option for the authorities. This is called zonal rotary disengagement.

People learn to become more frugal and save energy

Perhaps the only positive to come out of the ever-increasing cost of energy is that it may make people think twice about needlessly wasting electricity or make them consider ways they can make their homes more energy-efficient. 

The benefits of this are two-fold. Firstly being a bit more thrifty when it comes to your energy consumption can help shave a few kroner off your electricity bills. Secondly, it can help to reduce your carbon footprint overall. 

If you want a few pointers on how you can make your home more energy-efficient, then check out our guide


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