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Even higher costs predicted as Norway sets new record for electricity prices

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The Local ([email protected])
Even higher costs predicted as Norway sets new record for electricity prices
Electricity is more expensive than ever in Norway. Illustration photo by Nikola Johnny Mirkovic on Unsplash

Tuesday saw the cost of electricity reach a record high in parts of southern Norway, but prices are expected to rise further.

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The price of electricity in parts of southern Norway including Oslo, Kristiansand and Bergen reached 10 kroner per kilowatt hour (including tax) on Tuesday morning, broadcaster NRK reports.

Although those prices are reported to be unprecedented, they are also likely to increase further according to the report. Dry weather in Norway and high gas and oil prices internationally are contributors to this.

“It is incredibly expensive, we’ve never seen prices this high before,” Gert Ove Mollestad, editor of energy publication Montel Energy News, said in comments to NRK.

“The weather (is) very dry so we are not getting as much rainfall. There is reason to believe that prices in South Norway will climb further. It’s difficult to say how much but it will be terribly expensive,” he said.

Steps taken by Europe and the United States to ban oil or gas imports could have a knock on effect in Norway.

According to NRK, the current cost of a barrel of North Sea oil of 130 dollars is the highest since during the Global Financial Crisis in 2008.

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Once oil and gas prices increase internationally, the cost of electricity for consumers follows.

A government energy subsidy, which can cover up to 80 percent of electricity bills if certain conditions are met, was originally introduced in December in response to the price crisis.

The original package saw the government pick up 55 percent of the bill when the spot price, the cost of raw energy firms pay, rises above 70 øre per kilowatt hour.

The government later said it will cover 80 percent of electricity bills after  opposition and critics said that the scheme wasn’t enough.

Politicians are now calling for an extension of the scheme, which is scheduled to expire this month.

“We envisage a more accurate and fair scheme, but what’s most important is that we now extend the electricity subsidy and give people better electricity schemes than the one we have now,” Lars Haltbrekken of the Socialist Left party told NRK.

The new minister for oil and energy, Terje Lien Aasland, told NRK that “for as long as energy prices are high, then we will contribute” and that the scheme would continue.

READ ALSO: Norwegian government to increase energy bills subsidy to 80 percent

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