Government launches electricity support package worth billions

‘An extraordinary situation like this requires extraordinary measures in response. I am happy that we are now in a position to announce positive, targeted action that will help ordinary people to weather this electricity bill crisis. It is a forceful response to what we are aware many people are finding to be a difficult and serious situation,’ says Prime Minister Jonas Gahr Støre.

Support will be available to households for up to 5000 kilowatt hours of monthly electricity use. The scheme will take effect as of December 2021 and remain in place until the end of March 2022 and is to be administered by the Transmission System Operators (TSOs). The government will present the scheme as a proposition to the Storting as quickly as possible. The scheme is in addition to previously announced measures including housing assistance and student support.

‘This scheme will see about NOK 5 billion spent directly on paying the most expensive component of people’s bills. This will be in addition to reductions in the electrical power tax, increased housing assistance and improvements to student support. We have focused on helping as many people as possible – when spending this much money, it is important for everyone to feel the benefit. We hope that these measures will provide a little more breathing space for many people as we enter the Christmas period, regardless of whether you live in a draughty house, a flat or a farm,’ says Minister of Finance, Trygve Slagsvold Vedum.

The scheme will provide a deduction on household electricity bills at times when prices are extraordinarily high. When the average market rate for electricity exceeds 70 øre per kilowatt hour for one month, the state will provide a rebate of half the amount beyond this ceiling. The share paid for by the state will be deducted from the bill by the TSO or electricity provider.

‘Households will now see a reduction on their bill when electricity costs are extraordinarily high. Plans are already in place to implement the first reduction of this kind in January when electricity bills for use in December are due for payment. This scheme will benefit ordinary people throughout Norway,’ says Minister of Petroleum and Energy, Marte Mjøs Persen.

The scheme is designed to ensure that it will still pay to reduce your electricity use.

The household support scheme is part of a larger package of measures intended to help electricity customers.

Facts about the scheme:

If the average electricity spot price in a month exceeds 70 øre per kilowatt hour, the state will provide support for household electricity bills.

Norway’s power grid is divided into five different pricing zones. The spot price for electricity in the pricing zone that a household is located in will be used as the basis for calculating any support due.

The state will provide a rebate of half the price beyond the ceiling of 70 øre per kilowatt hour up to a maximum of 5,000 kWh per month. The rebate amount will be independent of which type of electricity package a household has.

Examples:

For a household living in a self-contained house that uses 3,280 kilowatt hours of energy in December, the scheme will provide support of up to NOK 1,025 for the month. For a household living in a flat that uses 1,336 kilowatt hours of energy in December, the scheme will provide support of up to NOK 418. The formulae use a sample rate for power in Southern Norway for the month of December that is equivalent to 120 øre per kilowatt hour. 

The actual level of support will depend on how much electricity is used by each household and how energy prices develop in your local area.

Overview of key measures in the government’s electricity package:

• Direct support for electricity customers in terms of the distribution network tariff: approximately NOK 5 billion (including VAT).
• Reductions in electrical power tax: NOK 2.9 billion.
• Housing assistance: NOK 1,500 per month per household for the period December–March. Households comprising multiple persons will receive a supplement of NOK 150 per additional person beyond the first resident.
• Student support: Increased support for students worth NOK 3,000, of which NOK 1,200 will be a non-repayable grant. NOK 190 million.
• Efficient energy use initiatives under the auspices of Enova: NOK 100 million.
• Compensation to municipalities in relation to additional costs incurred around the provision of financial welfare assistance measures worth NOK 100 million.

Additionally, the government has initiated dialogue with the TSOs in order to enable the deferment of payments for more customers.