Norwegian government shelves plans to make it easier to secure fixed-price energy deals
Plans to make it easier for consumers in Norway to secure fixed-price energy agreements have been put on the backburner by the government.
Unlike power-intensive industry clients, Norwegian consumers have a harder time securing a fixed-price energy agreement.
At the end of June, Finance Minister Trygve Slagsvold Vedum sent out the proposal for changes to the ground rent tax for consultation, his goal was to enable electricity suppliers to offer better fixed-price agreements to consumers from the turn of the year.
In north and central Norway, customers can still secure fixed-term agreements on energy. However, in the south and west of Norway, energy firms have stopped offering customers fixed deals due to high and fluctuating power prices.
High price volatility can make it harder for energy firms to hedge their bets as if the cost of energy is considerably below the fixed-term agreement, customers can trigger a "get out" clause, but if the cost of energy is higher than the fixed-price, firms have to absorb the costs.
Without a fixed-price agreement in place, the price consumers pay for energy can vary widely over the course of a month as they pay power firms the "spot", or current market price, for electricity. Varying prices throughout a month can make bills difficult to predict for households.
Plans put on hold
Both Centre Party (SP) and Labour Party (AP) politicians have announced on multiple occasions that both households and businesses will be offered fixed-price agreements to ensure predictability, but now the goal has been shelved for the time being, the newspaper Aftenposten reports,referring to the government's state budget proposal for 2023.
"Based on the consultation input, the ministry assumes that it may be demanding to establish long-term standard fixed price agreements for electricity to consumers on the same terms as they apply to business users," the budget proposal states.
Criticism from the opposition
The Red Party (Rødt), currently in opposition, was quick to criticise the change in plans.
"It shows that the government is unable to politically regulate the power market in a way that is good enough for households," Sofie Marhaug, Rødt's spokesperson on energy issues, told the newspaper Aftenposten.
The Socialist Left Party's (SV) energy spokesperson Lars Haltbrekken believes Vedum must look at SV's proposal to have the state buy power in larger quantities and sell it on to consumers through fixed price agreements.
"The state would have greater opportunities to get favourable prices than we as individual consumers do," Haltbrekken says.