The government is proposing several changes to the household electricity subsidy system to make the system more predictable and reliable. It is proposed that the payment of support for electricity should be based on the hourly price of electricity. The government is also proposing that the level of support be increased to 90 percent above 70 øre. Also that the subsidy system will be extended for the entire year 2024.
– The actions we are presenting today should give people confidence that the community will continue to resist in times of energy crisis and high electricity prices. These are improvements that mean the community has a larger share of the electricity bill. Calculating the electricity surcharge for each hour means you get an electricity subsidy for the hour you actually use, says Prime Minister Jonas Gahr Støre.
A system of subsidies also for agriculture and volunteering
Increase to 90 percent and extension to 2024 will also apply to agriculture and volunteering. At the same time, the government is taking steps to cover more people through a system of electricity subsidies for households. Work is underway on the program, which will cover households in private electricity networks that are currently not covered by the subsidy program. The application is submitted for consultation.
The government also appoints a committee of experts to assess electricity prices.
– The government has taken a number of measures to reduce electricity bills, including through an electricity subsidy scheme. We will now look at the various system changes that can affect prices over time, says Finance Minister Trygve Slagsvold Vedum.
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The committee must deliver its final report to the Ministry of Petroleum and Energy by October 15, 2023. The committee will be chaired by Managing Director Inge Gran of Sintef Energi. Other members will be announced soon.
Customers will be able to see the price of electricity at any time
When the method of calculating electricity subsidies changes, electricity sales companies will also be able to ensure that customers can see the price of electricity at any time. This also applies to how much the electricity surcharge is. Then it will be easier for individual households to follow it.
Network companies that administer the system will need time to adapt their systems to handle any changes. So the change will probably only apply from September 1.
The subsidy system will become more appropriate
— The models assessed by the commission must be able to ensure Norwegian security of supply in the short and long term. It is also important to provide the necessary incentives for energy production, the correct allocation of storage, energy exchange and corresponding consumption behaviour, says Oil and Energy Minister Terje Aasland.
– Since the introduction of the electricity support scheme in December 2021, it has been adapted and improved many times. The measures we are taking today will make the system more relevant. It will be easier for individual households to know what the current electricity price is at any given time, says Oil and Energy Minister Terje Aasland.
Government changes in the electricity subsidy system
More on the specific changes that are currently being proposed:
- Switch to hourly calculation. In recent months, there have been price fluctuations between different days and weeks. They affected the average monthly price and the level of electricity subsidies. The energy subsidy will now match the hourly price of electricity and will be triggered if the price exceeds 70 øre per kWh. This means that the electricity surcharge will reflect consumption even more closely and protect consumers from high hourly prices.
- New expectations towards companies selling electricity. To ensure that consumers know what they actually have to pay, we are now calling on energy companies to show what the price of electricity is hour by hour. This also applies to information on electricity subsidies. If necessary, this information will be required to appear in the communication of electricity sales companies with customers.
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- Up to 90 percent change in a year. In the past, the level of coverage with the electricity subsidy varied slightly during the year. Now the degree of support will be 90%. all year round, not just in the winter months. Provides greater power support for all consumers.
- Extension of the electricity subsidy program for 2024 . The government has announced that electricity subsidies will remain in place as long as prices remain exceptionally high. The grant program is currently being extended to 2024.
- Agriculture and volunteering. The existing electricity support scheme for agriculture will be extended to 2024. The electricity support scheme for voluntary organizations is in line with the household compensation rate and will be in place in 2024.
- Private networks. License-free private networks, often referred to as electricity grids, are now included in the electricity subsidy scheme. The electricity subsidy will then be paid to the customer who is registered at a metering point connected to the grid company.
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Changes in the electricity subsidy system
- Changes in the fixed price system for business. We want to make it easier to conclude fixed-price contracts with variable consumption. It should be such that there is no need to agree in advance how much electricity customers will buy at a fixed price and when. We also propose that industrial companies, which previously could only conclude industrial energy contracts for a period of 7 years or more, should be able to enter into fixed-price contracts for up to three years.
- Households using district heating systems. The government will set up an application-based electricity subsidy program for households using unlicensed DH systems (often called DH systems) that rely on electricity. It will provide energy support for a group of households that fell outside the electricity subsidy system.
- The government appoints a committee of experts. The Commission will assess the current electricity pricing system. The Commission needs to assess which measures can ensure lower and more predictable prices for electricity users in the short and long term. The committee will be chaired by managing director Inge Gran of Sintef Energi and must submit a report to the government by October 15.
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Source: regjeringen
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