EXPLAINED: How Norway’s energy support scheme will change
Norway’s government has announced a significant change to how its energy bill subsidy scheme will work. Here’s what households need to know about changes to their bill.
On Wednesday evening, Prime Minister Jonas Gahr Støre, Finance Minister Trygve Slagsvold Vedum and Oil and Energy Minister Terje Aasland unveiled the new energy support scheme.
The headline change is that the government proposes changing how it calculates support. Currently, it covers 90 percent of energy bills in the winter (and 80 percent between April and September) when the price rises above 70 øre per kilowatt hour.
It uses a monthly average energy price to calculate the support that will be applied. However, critics of the current scheme have said that this still leaves consumers footing the bill for large intra-month fluctuations.
Under the new energy subsidy scheme, the government will apply support on an hour-by-hour-by-average basis, which will see the government absorb more intra-month fluctuations.
“We are now making a good system better and more effective,” Støre said at the announcement of the changes.
“This should give people the security that the community will continue to take a significant part of the electricity bill in a time of energy crisis and high,” he added.
Terje Aasland said the new subsidy model would have seen households receive 52 percent more in subsidies when using November 2022, a month which saw prices fluctuate considerably, as an example.
However, it is likely that the new system will not be in place until this autumn due to its complexity, the government have said.
The current electricity subsidy scheme was introduced temporarily in December 2021 and has since been extended and adjusted several times. When announcing the changes to the system, the government announced that the subsidy scheme would be extended until 2024. Another proposed change would see the government increase support to 90 percent year-round.
An expert committee has also been set up to assess which other measures the Norwegian government can take to ensure lower and more predictable prices that work within the framework of Norway’s energy agreement with the EEA.
For example, the agreement with the EEA prevents Norway from stopping or limiting exports to the continent to try and bring down prices domestically. Exports to the continent are pointed to as a contributing factor behind high energy prices in Norway.
Comments
See Also
On Wednesday evening, Prime Minister Jonas Gahr Støre, Finance Minister Trygve Slagsvold Vedum and Oil and Energy Minister Terje Aasland unveiled the new energy support scheme.
The headline change is that the government proposes changing how it calculates support. Currently, it covers 90 percent of energy bills in the winter (and 80 percent between April and September) when the price rises above 70 øre per kilowatt hour.
It uses a monthly average energy price to calculate the support that will be applied. However, critics of the current scheme have said that this still leaves consumers footing the bill for large intra-month fluctuations.
Under the new energy subsidy scheme, the government will apply support on an hour-by-hour-by-average basis, which will see the government absorb more intra-month fluctuations.
“We are now making a good system better and more effective,” Støre said at the announcement of the changes.
“This should give people the security that the community will continue to take a significant part of the electricity bill in a time of energy crisis and high,” he added.
Terje Aasland said the new subsidy model would have seen households receive 52 percent more in subsidies when using November 2022, a month which saw prices fluctuate considerably, as an example.
However, it is likely that the new system will not be in place until this autumn due to its complexity, the government have said.
The current electricity subsidy scheme was introduced temporarily in December 2021 and has since been extended and adjusted several times. When announcing the changes to the system, the government announced that the subsidy scheme would be extended until 2024. Another proposed change would see the government increase support to 90 percent year-round.
An expert committee has also been set up to assess which other measures the Norwegian government can take to ensure lower and more predictable prices that work within the framework of Norway’s energy agreement with the EEA.
For example, the agreement with the EEA prevents Norway from stopping or limiting exports to the continent to try and bring down prices domestically. Exports to the continent are pointed to as a contributing factor behind high energy prices in Norway.
Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.
Please log in here to leave a comment.