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ENERGY

UPDATE: This is how much electricity in Norway will cost this winter

Yet another price record has been set in southern Norway, and industry experts have predicted how much you can expect to pay for electricity this winter.

Here's how much your energy bills in Norway will cost you this winter and why prices are rising. Pictured are powerlines.
Here's how much your energy bills in Norway will cost you this winter and why prices are rising. Pictured are powerlines. Photo by Fré Sonneveld on Unsplash

Dry weather, increased demand and exports to the continent have resulted in energy price records being set and re-set throughout the summer, autumn and early winter. 

On Monday, the price of electricity in Norway was set to average around 2.56 kroner per kilowatt-hour. This is just the raw cost of electricity. When grid rent and other fees are included, this will be upwards of 3.74 kroner for households. Between 5-6pm the price of raw electricity will peak at around 4 kroner. 

Why will energy prices continue to rise?

Reservoirs are only around 64.5 percent full, 20 percentage points lower than the average level of the past 20 years, according to the Norwegian Water Resources and Energy Directorate (NVE). 

In addition, rainfall earlier in autumn which helped to replenish reservoirs, will not be used until later into the colder months, meaning it will not affect prices until then. Furthermore, hydroelectric stocks won’t be topped up significantly until after the snow melts in the spring. 

“What comes into the stocks now will be able to be used later in the autumn and winter, so it will not have any immediate effect on the price,” Marius Holm Rennesund, a power analyst with Thema Consulting Group, told broadcaster NRK

Another contributing factor to record high prices is the cost of energy across Europe. 

“It will probably be a determining factor for the prices this winter, and it still looks like it will be expensive,” Thomas Mathisen, head of operations and development at Gudbrandsdal Energi, said of prices on the continent, particularly in Germany, to NRK. 

The newly functional North Sea Link power cable, which transfers power between the UK and Norway, is expected to increase prices in Norway. Energy experts have predicted to public broadcaster NRK that the new cable will bump electricity prices in the south by as much as 5 øre per kilowatt-hour.

READ MORE: Norway to provide renewable power to UK through underwater cable

How far will prices rise in Norway? 

Electricity prices could be more than double what they were last year. This is because the cold winters in Norway mean the demand and usage of electricity go up, causing typically higher prices throughout the colder months. 

Last year’s record low prices always meant consumers were more likely to feel the squeeze this year. However, energy experts say billpayers in Norway face the prospect of paying double the costs they incurred last winter. 

“It has been drier than normal throughout the year, in addition to little wind. If the dry weather continues, electricity prices will double compared to last year’s winter,” energy expert Kristian Fossum explained to electricity supplier Hafslund Strøm in late August.

Tor Reier Lilleholt, head of analysis at Volue Insight AS, has warned numerous times that high prices can be expected throughout winter.

He said that consumers could expect to pay upwards of 2 kroner per kilowatt-hour throughout the winter. 

“The price to the end-user, when taxes, VAT and all this is included, will on average be over two kroner per kilowatt-hour throughout the winter. We will also have weeks when prices will be far above and below this,” he told newswire NTB. 

The energy expert previously estimated that the cost of raw energy alone, not accounting for other fees, would be 17,500 kroner for 2021 if current prices continue for a house that uses around 20,000 kWh of power each year. This includes an estimated raw energy cost of approximately 6,500 kroner for the last three months of the year. 

He also predicted that next year the total energy bill for a house that consumes around 20,000 kWh each year could come in anywhere between 30,000- 40,000 kroner when considering all fees, such as taxes and grid rent. 

What can I do to save on my energy bills? 

As energy prices have sky-rocketed in Norway, we’ve been offering readers tips, tricks and advice on cutting down their energy bills. You can check out all of our coverage on soaring energy costs here.

An obvious way to use less electricity this winter is by using firewood to heat your home. But, of course, not all homes have a fireplace. Other ways to save energy include using timers on your appliances, using comparison sites to get the best deal and checking which subsidies and grants you might be entitled to from Enova to make your home more energy efficient in the long term. 

Vocabulary

Nettleie: The nettleie or grid-rent is the price you pay for the wiring connections used to bring electricity into your home. The nettleie is a set price in Norway and does not change with different energy providers.

Strømregning: electricity bill

Rabatt: discount 

Koblingsur: timers 

Member comments

  1. Are Norwegian citizens realizing that the state is actually making huge profits over our backs by selling electrify abroad? Instead of keeping electricity within Norway (increasing supply) and thus keeping prices acceptable, the government (electricity companies) is willingly selling it, boosting demand and thus sky rocketing our prices…

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For members

EUROPEAN UNION

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:

https://www.eiopa.europa.eu/browse/regulation-and-policy/pan-european-personal-pension-product-pepp/consumer-oriented-faqs-pan_en 

https://www.eiopa.europa.eu/browse/regulation-and-policy/pan-european-personal-pension-product-pepp_en 

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

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