Latest news with #Norgespris
Local Norway
15-05-2025
- Business
- Local Norway
KEY POINTS: Three things you need to know about Norway's revised 2025 budget
Finance Minister Jens Stoltenberg unveiled the Norwegian revised budget on Thursday. Among the key figures was the government's plan to spend 542 billion kroner from the country's 'oil fund'. The government can use revenues from the Government Pension Fund Global, where the country invests its oil and gas revenues, for public spending. The revised figure for 2025 was around 50 billion kroner more than the initial spending figure given by the government for the initial budget for 2025 But what does the budget mean for you, and what have the experts said? More details on the fixed-energy price scheme The government plans to introduce a scheme, dubbed 'Norgespris', that would offer households a fixed energy price throughout the year, offering an alternative to the current subsidy scheme. 'The Norwegian Price is an important measure to enable people in the country to choose to have more predictable electricity costs in a time of fluctuating and sometimes very high electricity prices,' Minister of Energy Terje Aasland said in a statement. Under the scheme, households that sign up will pay a fixed price of 0.40 øre per kilowatt-hour before network rental and fees. There would also be a consumption limit of 4,000 kilowatt hours per month. The government expects 70 percent of homes in southern Norway to sign up to the scheme , and has estimated that the average home in the Southwest Norway (NO2) energy region will receive government support equivalent to 5,200 kroner in 2026. Advertisement Inflation lower than expected Annual inflation for 2025 is expected to be 2.8 percent, down from the original 3 percent estimate. 'Inflation has come down , and in April, consumer price inflation was 2.5 percent. Together with good wage growth, this is improving households' purchasing power,' the government wrote in its report on the key budget figures. There was also good news in regard to unemployment, as the government expects it to remain low moving forward. What have the experts said? In the lead-up to the budget's release, Stoltenberg said the government would adopt a restrained policy. While that certainly applies to the policies unveiled in the budget, economists were less sure about how restrained the proposals were fiscally. 'It is not a disaster budget, considering that a lot of the increased spending is due to support for Ukraine. But in my opinion, it is going a bit in the wrong direction,' economics professor Ola Honningdal Grytten told public broadcaster NRK . While chief economist at Sparebank 1 SR bank, Kyrre Knudsen, also commented on the use of oil money by the government, he also said there was some potential good news for those hoping for lower interest rates. Advertisement 'This is good news. The government is assuming slightly lower inflation than [the central bank] Norges Bank's projections. In general, this means faster interest rate cuts,' he told NRK. Frank Jullum at Danske Bank told business and financial site E24 that the budget should be considered 'neutral' for the economy, as the increased oil spending will mostly be money sent to Ukraine. 'This should not have any effects on monetary policy,' he said. 'There is more spending, but much should not be spent in Norway. The Storting [Norway's parliament] agrees with this, and we economists can agree that money that is not spent in Norway will not stimulate the Norwegian economy,' he added.
Local Norway
12-03-2025
- Business
- Local Norway
Why experts are sceptical about Norway's plans for fixed energy prices
The scheme, dubbed 'Norgespris', would allow consumers in Norway to opt for a fixed price of 40 øre per kWh. Plans were submitted for consultation earlier this week, and the government wants to have the scheme in place from October 1st. Energy analyst Tor Lilleholt is one of the experts who has been critical of the government scheme. He told the business and financial site E24 that the government is focusing too much on high electricity price peaks to try and ease the cost of living for consumers, and pointed to food prices increasing more than energy costs. 'Politicians assume that we have a dysfunctional market, but I, who work with this every day, see that this is not true. The price mechanism works,' he told E24. Lilleholt added that the scheme would undermine long-term goals such as improving energy efficiency. As the scheme would offer a fixed price, consumers would, therefore, no longer need to plan their usage around price peaks. The government has said it wants to have a consumption cap on the fixed price. During the consultation, it wants to establish whether a cap of 5,000 kWh per month would be suitable or whether it should be lower. Only four percent of households in Norway have a consumption higher than this, according to government estimates. Asbjørn Torvanger, senior researcher at Cicero Center for Climate Research, told E24 that the fixed-price being offered to private homes and not businesses would also create issues. 'Small and medium-sized businesses do not receive a fixed price, and thus a higher price than otherwise. The need to reduce power consumption is therefore being sent to another sector of society, namely private business,' he said. He said that large companies that have been able to secure fixed-price deals would also struggle once their current contracts expire as energy prices are expected to rise, and the Norgespris scheme could reduce investment in renewables and efficiency. Torvanger pointed out that the scheme would also see wealthier households receive more support than less well-off ones. This is because the scheme will apply to both primary residences and holiday homes in Norway, meaning those who own two homes will receive more government support overall. 'Electricity policy leads to an unbalanced redistribution in several ways,' he said.
Local Norway
10-03-2025
- Business
- Local Norway
How will the Norwegian government's plan for a fixed energy price work?
The Norwegian government submitted its plans for a fixed energy price of 40 øre per kilowatt hour for households for consultation on Monday. The scheme has been dubbed 'Norgespris' by the government, and it could be introduced later this year. 'Introducing the Norgespris is about providing security and creating predictability for people's electricity costs,' energy minister Terje Aasland said. What is the Norgespris scheme? The aim of Norgespris is to provide an alternative to the current energy subsidy scheme that the government introduced in 2021. Instead of subsiding 90 percent of the spot price (the raw energy cost) over 75 øre per kWh, consumers can opt for a fixed price of 40 øre per kWh. How will it work? More details were unveiled on Monday, and the cap of 40 øre per kWh will be the price without VAT and charges for being connected to the energy network. The fixed price will apply to residential and holiday homes in Norway. However, the government still has some key points to iron out. It wants to introduce a cap on the amount of energy covered by the fixed price – to ensure energy isn't wasted by households – but isn't sure of the exact figure. One of the aims of the consultation phase, where experts and the public can weigh in on the proposal, is to try and determine a suitable figure for the energy consumption cap. Once a cap is established, any consumption over this figure will not be covered by the fixed-price deal. Currently the government is unsure whether a cap of 5,000 kWh per month would be suitable and whether it should be lower, according to government figures only four percent of homes have higher consumption than this. While a limit hasn't been established, it looks like the government intends to give cabins and leisure homes a lower cap than residential properties. Those who opt to sign up for the fixed energy price should also expect it to be a binding agreement until the end of the year you signed up or the end of the year after you signed up if you opt in after October. This means that if the average energy price is below 40 øre per kilowatt hour, you may be better off without the energy deal, this will mostly apply to homes in central and northern Norway which enjoy the country's cheapest energy prices. The price of fixed price deals could change in the future. However, the price of 40 øre per kWh will not be changed before January 1st 2027. What happens next? The proposal has been sent out for consultation and will last until April 21st. Once the consultation is done, it will have to pass through a committee and then through parliament before coming into effect. The government hopes to have the scheme ready for households from October 1st and intends to have it last until December 31st, 2029. If the scheme comes into action, it will not replace the current energy subsidy scheme, and the two will coexist. One thing to note is that there is a general election in September, and a right-wing majority looks like a more likely outcome. This means the scheme may be scrapped or changed before it comes into effect.
