Norway’s government agrees package to slash energy bills this winter

The government will cover more than half the cost of energy bills this year when the spot price rises above a certain point as part of a wider package that the Socialist Left Party has agreed to support.

Pictured are powerlines.
The government will cover half of the spot price when it rises above 70 øre per kilowatt hour. Pictured are powerlines. Photo by Fré Sonneveld on Unsplash

Following months of rising energy prices across the country and records being set for energy costs in the south of Norway throughout the winter, the government has said it would foot just over half the bill when the spot price exceeds 70 øre per Kilowatt hour. 

“Now people can go into Christmas less worried,” the Labor Party’s energy and environmental policy spokesperson Terje Aasland said.

How much will covered by the government? 

The government will cover 55 percent of the bill on energy prices above a monthly average of 70 øre per kilowatt-hour. However, this only applies to those on a spot price agreement. The spot price is the raw cost of energy paid by exchanges and energy firms. 

The deduction will appear on your bill and will be done automatically. 

How long will the scheme last? 

If implemented, the scheme will apply from December until March 2022. The deductions will appear on the bill for December, which will arrive in the new year. 

Who is eligible? 

The scheme will only apply to primary residences and not cabins or holiday homes. 

Furthermore, housing associations with a shared meter will not receive government assistance from the state. 

This means those in apartments where there’s a collective electric and water bill will not benefit from the scheme. 

Are there any other rules?  

Yes, there will be a consumption limit on the bills. Households will only receive support for consumption up to 5,000-kilowatt-hours. You will be required to pay the total price of any consumption past this limit. 

In addition to this scheme, students who can document electricity expenses will receive 3,000 kroner in extra loans, with 1,200 kroner converted into a scholarship. 

The social allowance for housing will also be increased by 1,500 months per month until March to help with energy costs. 

The new proposals will be in addition to a small cut in electricity tax of 8 øre per killowatt-hour in the winter months. 

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Could sky-high energy prices force some ski resorts in Norway to remain closed?

High electricity prices and the prospect of power rationing could spell big trouble for Norway's smaller ski centres.

Could sky-high energy prices force some ski resorts in Norway to remain closed?

Record high energy prices mean some ski resorts in Norway are facing the prospect of staying shut this winter, business and financial newspaper Dagens Næringsliv reports. 

“We constantly have to make an ongoing assessment of it, but in the worst case, we have to close the slope,” Knut Styrvold, chairman of the Kirkerudbakken ski centre in Bærum municipality, told the paper. 

Industry organisation Norwegian Alpine Resorts and Mountain Destinations sent a letter last week to the Prime Minister, Finance Minister and the Minister of Culture calling for measures from the state to help businesses struggling with energy costs. 

Some of the highest costs for an alpine resort are artificial snow production, which requires large amounts of power. 

“In our area, with the prices that are predicted now, we are looking at a tenfold increase in power costs, perhaps more for the coming winter,” Odd Stensrud, deputy chairman of the industry organisation and general manager of Alpinco, which owns and operates the alpine resorts at Hafjell and Kvitfjell, told the paper. 

Larger resorts and firms should be able to manage as they have agreements where they pre-pay for energy in bulk, meaning they may not necessarily have paid current high prices for the energy they will use in snow production. However, the general manager of Alpinco added that larger resorts could still end up paying double what they paid last year. 

Support for smaller resorts, and the business community in general, have yet to be announced by the government. According to Stensrud, this means many resorts may opt against running the lifts this winter. 

“If the electricity prices that are signalled for the coming winter become a reality, then it is absolutely certain that it will mean the hook on the door for several locations,” he said. 

“It is important to remember that the alpine resorts are often the core business in many mountain destinations and local communities. They keep the other tourism activities going in mountain municipalities in Norway and are crucial to ensure that districts and municipalities are not hit too hard by electricity prices,” Strensud added. 

Earlier this week, Oil and Energy Minister Terje Aasland said that the government and parliamentary leaders were “working closely to find a fair arrangement for business”. 

A plan for businesses is expected to be unveiled during the next month.