Government introduces electricity price of 40 øre - may weaken energy efficiency
From this autumn, the government will introduce Norgespris, a fixed-price scheme for electricity that can reduce households' electricity costs, but at the same time weaken incentives for energy efficiency and consumer flexibility.
Fixed price of 40 øre
The Government proposes to introduce a scheme for a fixed price for electricity of 40 øre/kWh excluding VAT and other taxes from 1 October 2025 (Norgespris), as well as corresponding support schemes for district heating.
When a Norwegian price scheme is established where households are compensated for high electricity costs, the incentives for energy efficiency and consumer flexibility are weakened. The incentives for electricity saving and local energy production must therefore be strengthened.
"The programmes for energy efficiency and local energy production in Enova and the Norwegian State Housing Bank must therefore be continued and strengthened in order to achieve the goal of a 10 TWh reduction in electricity consumption in buildings and 8 TWh of solar power," says Kjetil Lein.
NITO believes it is necessary to strengthen programs for energy saving and local energy production in order to maintain Norway's ambitious goal of reduced electricity consumption and increased solar power production.
Kjetil Lein, President of NITO
Must have mitigating measures
Norway has ambitious goals for solar energy and energy efficiency, which will need new incentives when Norgespris – with a high maximum limit for consumption – is introduced. The Norwegian price for electricity can thus undermine cost-effective measures and solutions in the climate and energy transition.
"Mitigation measures are necessary to keep the market alive for solar power and energy efficiency in households," says NITO's president.
Will increase consumption
The power surplus is expected to shrink significantly towards 2030. The introduction of Norgespris will in all likelihood increase the consumption of electricity at a time when almost no new power production is being developed in Norway, and thus worsen the situation.
NITO is disappointed that the government in the revised budget does not follow up Norgespris with measures for more local power production. The only positive thing related to new renewable power production is that the government will not make any changes to the offshore wind plans.
Electricity costs for households can be reduced through technology and schemes for energy efficiency and consumer flexibility. Returning high and increasing power revenues from the public sector to consumers can advantageously be done with reduced grid tariffs – something NITO has argued for.
- It is therefore positive that the government in the revised national budget follows up on its promise to reduce the tax on grid rent by proposing to lower the electricity tax by 4.4 øre per kWh, and that it aims to remove the Enova tax from 1 January 2026, Lein concludes.
