(Nettavisen): In the first week of the year, extreme cold has been forecast in large parts of the country. Temperatures are forecast to drop as low as minus 22 degrees in Eastern Norway on Thursday and Friday, and as low as minus 35 degrees in parts of Finnmark.
Then electricity consumption skyrockets, and this pushes prices up:
– It is the consumption that pulls up in itself. We get around 10,000 megawatts higher consumption than normal, which affects the price very hard, says Benjamin Thomassen, power analyst at Volue Insight.
He estimates that the kilowatt-hour price could reach NOK 1.50, perhaps up to NOK 2, depending on how prices are set in other Nordic countries.
Saved by the cables
Often it is the disputed foreign cables that are blamed when electricity prices are high. But this time it is precisely the cables that prevent even higher prices, the analyst points out:
– Without imports, prices would have become far worse. Here we are helped by the Netherlands, Germany and perhaps Great Britain.
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On the continent, milder weather than normal has been forecast, and normally good wind conditions. Then we can import power through the cables. Lower prices in the countries we import from offset even higher Nordic prices.
– The more it blows in Europe, the better for us. The cold can drop almost 15-20 degrees below normal in Norway and the other Nordic countries. At the same time, the temperature is forecast to be 5 degrees higher than normal on the continent. So what is dampening the price is Europe. If they had also had cold and little wind, it would have been rock ‘n roll, says Thomassen.
Same prices throughout Norway
Due to the extensive cold, electricity prices will also be high in northern Norway when the cold really sets in, the analyst emphasizes.
It will be the same price because the consumption will be extremely high. This applies to the entire Nordic region
– We are excited to see how the manufacturers in the Nordics solve this. Finland and the Baltics also get very cold, and a little depending on how the price is set there, we can get up to NOK 2 at the most expensive, in the middle of the day, but with lower prices at night.
When the electricity price records were set in December 2022, the biggest impacts came when a nuclear power plant in Finland had to shut down operations. Should something similar happen now, at the same time as the cold hits Europe, there could be completely different and far higher prices than NOK 1.50-2 per kilowatt hour.
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Changed power support
Towards the New Year’s weekend, electricity prices are more moderate. On Friday, they are between 43 and 76 øre.
And in any case, the electricity support will protect the bill from extreme impacts when the price goes up. As you know, the electricity subsidy changes from the new year. The “floor” in the scheme is lifted, which Nettavisen has mentioned recently.
Ever since the electricity subsidy was introduced in December 2021, it has covered parts of the electricity price above 87.5 øre (70 øre plus VAT). From the new year, the floor in the electricity subsidy will be increased to 91.25 øre (73 øre plus VAT) – or an “adjustment due to price increases” as the government calls it.
This means that 90 per cent of the bill for the pure electricity consumption above this is paid by the state. Should, for example, the electricity price rise to NOK 2, the actual price to the consumer, including VAT, will be NOK 1.07.
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More expensive online rental
But in addition there is network rent, what we pay to have the electricity “delivered” home. And when consumption is high, the expenses for online rental increase sharply, because this is not a cost that is covered by the electricity subsidy.
Elvia, the country’s largest online rental company, has posted the prices for 2024. Their customers must now pay 39.6 øre per kWh during the day. This is the so-called energy link, the price for ongoing consumption.
Thus, the actual electricity price quickly rises to around NOK 1.50, also when the electricity subsidy is taken into account, when the kWh price approaches NOK 2.
In addition, there is a fixed link linked to consumption. This is calculated from the average of the three hours in a month that you have used the most electricity. For Elvia customers, this fee is from NOK 120 to NOK 535 per month for the vast majority of households.
Extremely low temperatures increase the risk of you ending up on a more expensive “fixed-rate” level, since heating makes up a large part of Norwegians’ electricity consumption.
2023-12-29 21:03:16
#Cold #shock #sharp #jump #electricity #prices
