HADELAND GLASSVERK (Nettavisen): – For 259 out of 260 years we have had stable energy costs, but now it is impossible to deal with, when you do not know what it is. It can be 4 øre per kWh one day, it can be NOK 5, NOK 1.60…
Nettavisen meets a frustrated owner, Atle Brynestad, in the traditional craft business in Jevnaker the day before the government presents the new electricity subsidy scheme.
– It is very difficult to run a long-term industry, after all we have orders. This year alone, we have received orders from Japan, the USA, France, Switzerland and England. The foreign architects say that they have not seen anywhere where there is such a fine glass mass, grinding quality and color as here.
Frp leader Sylvi Listhaug has also made the trip and is given a tour of the premises. Both Brynestad and Listhaug are concerned about the high and highly unpredictable electricity prices.
– But from when it cost NOK 20-30 in electricity to produce one unit, it has now varied from NOK 200 to 400. It doesn’t work, Brynestad asserts.
A glassblowing furnace at the traditional glassworks must be heated to 1160 degrees. There will be expenses when the oven uses 10,000 kWh a week, about NOK 1 million a year with today’s electricity prices and taxes.
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Half laid off
– Then at least we have something to deal with, can calculate according to that and can have labor according to that, says the business owner.
Currently, 71 employees have been made redundant, around half of the workforce. The production premises are empty when we are shown around.
– The employees lose wages, but the layoffs are also psychologically difficult for them. They go home and know they can be at work. They simply get paid less because the electricity prices are too high, Brynestad states.
He points out that it rains a lot in Norway. Cheap energy is a common good, that’s how the industry has been built up over many, many years.
Brynestad has been very critical of the fixed price agreements launched by Minister of Business, Industry and Industry Jan Christian Vestre (Ap) in December and relates to what the Minister of Business and Industry said on 16 September last year.
– Then he promised that there would be a new force regime from 1 January. We have to expect a minister of business to deliver on what he says. Then we get to 1 January, and then no one wants to sign the terms of the existing agreements. The terms are completely unreasonable. It turns out that the minister of business has no tools in his toolbox, so he can’t do anything.
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– Be honest
Brynestad believes that the Minister of Industry can either say that there will be a new power regime and deliver on it, or else he can say that “I couldn’t do that”.
– Then it’s fair and square, not that he throws things out for us that we thought he would deliver on, but doesn’t. He should have told us why he can’t do it instead of telling us to put ice in our stomachs.
Brynestad says they have to reduce fixed price agreements to NOK 1 per kWh, including the online rent, in order for the fixed price agreements to be relevant.
The statements were therefore made before the government came up with new electricity subsidy schemes this week. State Secretary Odd Steinar Viseth (Ap) in the Ministry of Trade and Industry tells Nettavisen that the fixed price market, which the government created with tax changes in the state budget for 2023, has got off to a good start. Prices fall, and more players join the competition.
– The shortest contracts, of three years, have fallen 40 per cent in price since the first contracts arrived on 7 December last year and can now be signed for as low as 85 øre throughout southern Norway. The cheapest 5-year and 7-year contracts are down to 70 and 65 øre. It is well below 1 kroner, as Brynestad wants, Viseth defends the criticism.
The business owner says afterwards that he doesn’t really care anymore, he’s done with the discussion. When they saw that Vestre did not deliver what he had promised, they took several measures. The glass factory laid off work towards the end of last year, because Brynestad believes that the power regime was essentially a failure.
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250 million in turnover
And in the large building mass, electricity consumption has been reduced from 9 million kWh a year to 7.4 million. Brynestad will then install many solar collectors on the roof, because the premises use a lot of hot water.
Hadeland Glassverk had a turnover of NOK 222 million in 2021 and was left with a scant NOK 6.7 million before tax. The 2022 result is not yet known, but the turnover was around NOK 250 million. The equity – Brynestad’s values - is just over NOK 30 million.
– But you don’t operate at a loss and can eat away at the equity just to keep things going?
– We have good equity in Hadeland Glassverk. It will endure, it’s just a matter of what form it endures. But in recent years, more and more product development has taken place in Norway.
Brynestad is an optimist and hopes to go full speed towards spring and to open another oven at the beginning of March. Then he can take back seven employees and have two out of four ovens open.
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Most important company
– What local ripple effects have the redundancies had?
– This is the most important company in Jevnaker. It will always have knock-on effects when those who work here have less purchasing power, and there will be lower tax revenues for the municipality.
– How serious is the current situation?
– We are now entering spring and summer, so now we use much less energy for heating. It is a large building mass. We have said that we can use 100,000-120,000 kWt a week. If we go into autumn and winter, it is not serious for the business, but there will be less production in Norway.
– We have two major costs here in Norway, electricity and labour. If we can’t do something about the electricity, we have to do something about the workforce. We cannot afford to make so many goods in Norway anymore. The production will then be moved outside, this is Norway’s oldest industrial and craft business.
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Understanding and sympathy
The glass factory has many orders, but it is too expensive to produce. Brynestad says they have gained an incredible amount of understanding and sympathy for the situation they have found themselves in due to the enormous electricity prices and fluctuations. There have therefore been few cancellations, but some get the goods delivered late.
For Hadeland Glassverk, the fixed price agreements are still too expensive and too inflexible to be relevant.
– Yes, it depends on both the price and how the agreements are put together. The lowest prices mean that you must commit to the same amount of electricity every hour of the day, 24 hours a day for the next seven years. Nobody does it, and we have to sell back cheaply what you don’t use. It doesn’t work, but what we just want is predictability.
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No outlet for Europe
Listhaug says she has visited many companies. The most important thing is not whether the price is 50 øre, 70 øre or 1 krone per kilowatt hour, but that the companies must know what they have to pay, she believes.
– But should there be a fixed price regardless of the weather and the supply and demand for electricity in the market?
– As of now, there is a power surplus in Norway. The reason why we have had very high prices is that we have exported electricity and drained the reservoirs. So we have let this price contagion from Europe hit the Norwegian market. We must both have control over exports, we cannot be an outlet for the rest of Europe, Listhaug replies.
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Pressure on the government
The Progress Party has proposed a maximum price of 50 øre per kWh many times. The FRP leader hopes that the national board meetings in both the Center Party and the Labor Party will favor a maximum price for electricity, because it will provide predictability
Listhaug is keen to have viable prices for the business community if we are to have a competitive business community.
– Now we are about to break many of the legs we have to stand on after the oil if this persists for a long time. The absurdity is that this is partly done by sending the power out from the land and to the oil industry, which people are talking about replacing with new jobs. We must stop electrifying the shelf and find other solutions for it, is the demand from the Frp leader.
