Norwegian energy agency warns high prices could last until next winter

High energy prices which are driving up living costs in Norwegian homes could persist through next winter, the Norwegian Water Resources and Energy Directorate (NVE) warned on Monday. The government should be prepared to extend economic relief, the agency said.

Lighting and heating homes in Norway could remain costly throughout 2022.
Lighting and heating homes in Norway could remain costly throughout 2022. Photo by Sara Kurfeß on Unsplash

High energy prices in Norway are likely to continue through the end of this year, NVE director for energy and concessions Inga Nordberg said on Monday in an interview with broadcaster NRK.

“What we are seeing is that you should be prepared for high prices at a much higher level than we are used to. Not just this winter but also in the summer and possibly next winter,” Nordberg said.

Although energy prices normally fall in spring and are also expected to do so in 2022, the most likely scenario is that they will remain high throughout the year, the department director said.

Households should be prepared for “close to winter prices in the summer”, she said.

The prognosis for high energy prices in the medium term remains uncertain, however. It is primarily affected by two factors in Norway: gas prices and the level of rain and snowfall.

The current security situation in Ukraine makes the former factor uncertain, while snow levels in the mountains are currently low although that “can change quickly”, Nordberg said.

The government last month said it would further increase a subsidy for energy bills, updating a package brought in December which saw the state pick up 55 percent of household bills when the spot price, the cost of raw energy firms pay, rises above 70 øre per kilowatt hour.

The opposition and critics subsequently said that the scheme wasn’t enough before the government said it would cover 80 percent of electricity bills, subject to a vote in parliament.

The scheme, which began in December 2021 and will run until March of this year.

Asked whether the government should consider extending it, Nordberg told NRK “I think it is natural that is one of the things we should look at in future”.

READ ALSO: What times of day should you avoid using electricity in Norway?

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Norwegian gas plant back in service after fire

Norway is Europe's second-biggest supplier of natural gas behind Russia and key to ensuring energetic autonomy for the continent. Its sole liquefied natural gas plant is operating once again after being ravaged by a fire in 2020.

Norwegian gas plant back in service after fire

Norway’s sole liquefied natural gas (LNG) unit has been restarted after a 2020 fire and will soon begin production, energy company Equinor said Friday, a move expected to help increase exports to Europe.

Norway is Europe’s second-biggest supplier of natural gas behind Russia.

Production at Equinor’s plant in Hammerfest in northern Norway, which makes it possible to deliver gas by ship in liquid form, is to help Europe cut its dependency on Russian gas after its invasion of Ukraine.

“We have completed the repair work on the plant, we have completed the testing… and we have now started the cool-down process,” Equinor spokesman Gisle Ledel Johannessen told AFP.

“It will take some time to finalise the cool-down process. The next step is to get the liquefied natural gas on the tanks”, he said.

Johannessen would not specify when that could happen, but said it was “a short time frame”.

The site, damaged in a September 2020 fire, produces almost 4.65 million tonnes of LNG per year, according to Equinor.

Norway announced steps in March to keep its gas production at maximum levels to help Europe reduce its Russian dependency.

Among other things, the Norwegian Petroleum and Energy Ministry agreed to adjust the production licences of three offshore fields so that they can prioritise gas production over oil.

But its exports have been squeezed by production capacities, already churning at maximum levels, and the distribution system via pipelines.

It is hoped the Hammerfest unit will make it possible to increase export volumes.

Norway covers between 20 and 25 percent of the European Union’s and Britain’s gas needs, while Russia currently supplies around 40 percent.