About Norgespris: — Good information to customers will be crucial

— We have daily contact with electricity customers across the country, and Norgespris is high on the list of topics they have the most questions about. Recurring themes in our conversations with customers are desires for reduced electricity costs and predictable electricity prices. Here, the government's proposal for a fixed price of 50 øre/kWh including VAT, every day, every month, throughout the year, will be enticing, says Ramsdal.

He also informs that all customers at Fortum will have the opportunity to enter into Norgespris if they wish.

Not a Pure Compensation

The challenge is that Norgespris is not designed like today's electricity support; it is not a pure compensation scheme created to shield consumers from the highest peaks. In every hour where the electricity price is lower than 50 øre, electricity customers must actually pay money to the state.

— It is not difficult to imagine scenarios with frustrated electricity customers when they find out that in months where the electricity price is lower than 50 øre, they have to pay the difference to the state and not the other way around, says Ramsdal, and continues:

— Looking at 2024, there were six consecutive months, from May to October, where the electricity price in Eastern Norway had an average price below 50 øre. In August 2024, it was as low as 16 øre. In Central Norway, all of the first three months of the year had an average electricity price below Norgespris, and in Northern Norway, the price has never exceeded 11 øre in the first three, and coldest months of the year. Good information to customers about what the scheme entails will be absolutely crucial, he believes.

Worrying

Fortum Strøm recently submitted its consultation response to the Government and the Ministry of Energy, which will work further on how Norgespris will be launched and offered to Norwegian private customers by October 1.

— While it is very positive that the Government wants to shield customers from the highest price peaks that we have all experienced at times in recent years, there are also some factors about Norgespris that are worrying, says Ramsdal.

Read the entire consultation response on regjeringen.no  Read the entire consultation response on regjeringen.no  - External link

Electricity Market and Consumption

The electricity market is adapted to consumption and demand and works by having higher prices when there is less electricity available than when the price is low.

— If many customers use a lot of electricity indiscriminately during periods when the market clearly signals that they should do the opposite, this could negatively impact higher prices for those actors who have not signed up for Norgespris or do not have the opportunity to sign up for Norgespris. For example, businesses, industries, or customers in our neighboring countries, Ramsdal explains.

Using Electricity More Efficiently

The government proposes that Norgespris should have a volume limit of either 3000, 4000, or 5000 kilowatt-hours that can be consumed each month for households. Here, it will be important to balance setting the limit high enough for as many as possible to get the security Norgespris offers, while also ensuring that households have an incentive to reduce their electricity consumption and shift consumption within the day. Especially during periods when the electricity grid is heavily loaded.

— The advantage if the limit is set high will be that most electricity customers will largely avoid worries about exceeding the volume.

A high maximum volume, as proposed at 5000 kWh per month, could similarly have a negative effect by likely increasing overall electricity consumption if there is little incentive for customers to adjust their consumption.

— We also fear that it will provide very little incentive for customers to use electricity more efficiently. It could also stop investments in solutions for energy efficiency, smart electricity consumption, or own power production with solar panels," says Ramsdal.

Good Cooperation

Fortum has cooperated well with the Regulatory Authority for Energy (RME) and other actors on how the implementation of Norgespris can be done in the best possible way, also on the purely technical aspects. We will continue to do so so that if Norgespris is launched on October 1, we will be able to assist all our customers with reliable information and guidance.

— Electricity, energy, and the electricity market are complex. There are many actors, and it is therefore even more important that we as actors cooperate well so that customers get all relevant information, assistance to make the right choice for them, and ensure orderly processes, Ramsdal concludes.