Twice the Consumption Growth Among Electricity Customers on Norgespris

Figures from Norway’s largest grid company, Elvia, show a consumption growth of 3.82 percent in October among customers on Norgespris. For customers without Norgespris, growth was only 1.74 percent. The survey covers Elvia’s customers in Eastern Norway.
– Although it is a thin statistical sample, the survey shows a clear change in consumption due to Norgespris, says Head of Analysis at Insight by Volue, Tor Reier Lilleholt.

Business foots the bill
And this is precisely what many have warned about — that with a fixed-price electricity agreement, the motivation to reduce energy use in thousands of homes will evaporate.
– Right now electricity costs 3.60 kroner per kWh (Thursday last week, ed.). Businesses do not have access to Norgespris, so that is the price all companies pay. For energy-intensive sectors such as hotels, bakeries and similar, it goes without saying that this can become challenging, says CEO and founder of Energy Control, Tommy Hagenes.
He fears that energy use will increase even further as a result of Norgespris.
– It is not just about total consumption — it is also about when you use energy. Now that incentives are gone, everyone is free to just switch everything on at the same time. Friday tacos, electric car charging, washing machine and maybe a shower before the weekend? There are no longer any incentives either to save or to spread energy use. The result will be higher electricity consumption and more expensive electricity. Business is left holding the bill, says Hagenes.

A misguided solution
He therefore believes that the Norgespris solution is a completely misguided approach, even though he is personally pleased on a private level.
– For my own wallet, I am of course happy about lower prices and increased predictability. For business, however, it is a catastrophe. They have to pay for the increase in consumption among private households, says Hagenes.
Over one million Norwegian households have so far chosen to fix their electricity price. If the figures from Elvia also apply to "all the others", it would mean significantly increased energy consumption. Hagenes believes Norway Inc. should have looked for completely different solutions to address our collective energy challenges.
– The solution does not lie in subsidies like Norgespris, but in incentives for reduced energy use, says Hagenes.

Can take action yourself
One of the solutions is to take control of your own electricity consumption. Energy Control has helped over 1,000 buildings to significantly reduce their energy consumption.
– By going in to find faults and demand-control the buildings, we often see an energy reduction of between 30 and 50 percent. That is significant. Such energy-saving measures will become increasingly important going forward, says Hagenes.
He nonetheless emphasises that this does not solve the problems for energy-dependent operators.
– The result may simply be that the increased electricity costs become too heavy to bear and that some have to close down because electricity costs become too high. Yes, we can make improvements in the building, but the truly energy-intensive activities cannot always be demand-controlled. I therefore believe that Norgespris is a misguided approach. We must instead focus on incentives to reduce total energy consumption, says Hagenes.

Head of Analysis at Insight by Volue, Tor Reier Lilleholt, agrees. He believes Norgespris is not the best solution given the climate ambitions we have set ourselves.
– You could buy 440,000 heat pumps annually and give them away for free with the 11 billion kroner Norway Inc. has set aside for electricity support. There are three million homes in Norway and by giving away these heat pumps we could achieve a permanent reduction in energy consumption for 20 years. Instead, the government chose some happy voters at the end of the election campaign, says Reier Lilleholt.