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Could Norway take new steps to address high energy prices?

Norway’s Prime Minister Jonas Gahr Støre is under increasing pressure to take additional action on sky-rocketing energy prices.

Could Norway take new steps to address high energy prices?
A reservoir on northern Norway. The government is considering new responses to high energy prices in the country's south. Photo by Bjørn Kamfjord on Unsplash

Local and national politicians have joined increasing calls for the Norwegian government to take additional action to address high energy prices.

Støre met on Tuesday with Labour mayors to discuss high energy prices. Oil and Energy Minister Terje Aasland also attended the talks, which came after the Labour mayors in Kristiansand and Stavanger criticised the PM and demanded new measures to deal with rising electricity prices. 

“I think we have to accept that this won’t be over anytime soon,” Støre said earlier this week.

“It could take one or two or three years,” he said.

The presidency of Norway’s Storting parliament will meet at the beginning of next week to decide whether lawmakers should be urgently recalled over the issue. 

The Norwegian Confederation of Trade Unions (LO), the PM’s biggest ally outside of the government, has also said that high prices need to be addressed. 

The government has had a subsidy scheme in place since last year that covers 90 percent of the portion of the energy bill where the electricity price was above 70 øre per kWh. The subsidy scheme has been raised from 55 percent and 80 percent of the bill following pressure. 

The PM has ruled out introducing a maximum price, however, a measure which the Conservative Party has also warned against

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However, the Oil and Energy ministry confirmed to newspaper VG on Wednesday that the government is working on new measures in response to the energy price crisis.

The objective of the government’s work is to be able to present the main features of the new measures by next week, sources told VG.

The newspaper writes that measures relating to energy production at reservoirs and restriction of exports are being considered while financial support for struggling businesses are also being considered as a way to relieve the pressure of high prices.

Electricity prices have continually hit record levels in the southern part of Norway. The Nordic country is part of the common European energy market and has increased cable capacity for exports, with high quantities of energy exported from Norway to Europe in light of the Russian invasion of Ukraine and subsequent breakdown of Russian gas exports to Europe.

Water reservoirs in southwestern Norway are already low following a low rainfall summer in 2021, with that part of the country particularly suffering in the current climate of high prices.

READ ALSO: Norway’s Prime Minister warns that high energy prices could continue for years

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ENERGY

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. 

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