The Norwegian government will guarantee electric car owners in the country so-called 'Norwegian prices' for electricity. Experts fear spot prices of 32 DKK per kilowatt-hour.
Several experts are now sounding the alarm. They are concerned that the price of electricity could reach a level of 32 kroner per kilowatt-hour in Norway.
They link the fear to the Norwegian government's plan for a price guarantee for electricity.
According to Anders Lie Brenna, editor at Energiwatch, there is a theoretical possibility that the price of electricity could rise to 4,000 euros per megawatt-hour, which corresponds to almost 32 Danish kroner per kilowatt-hour.
The Norwegian government plans to introduce "Norwegian prices" for electricity from October 1. This means that Norwegian consumers can choose a new type of contract with a fixed electricity price of 50 ore per kilowatt-hour.
Anders Lie Brenna, editor at Energiwatch, believes that there are several pitfalls in this plan. He believes that both the government and the energy industry are underestimating the potential problems that could arise.
A fixed price can reduce consumers' incentive to limit their electricity consumption, especially when supply is low and demand is high. This can mean that electricity prices both fluctuate and increase more.
This is reported by Norwegian TV2 .
With a fixed price, fewer consumers will have any reason to adjust their consumption according to when electricity is cheapest. This increases the risk of extreme electricity prices, as fewer are 'pressured' to save electricity when necessary.
A fixed price could also lead to an increase in home charging of electric cars, as the price difference between home charging and fast charging will become larger.
Furthermore, the fixed "Norwegian prices" will eliminate the need for differentiated prices at night, as the price will be the same throughout the day.
According to Anders Lie Brenna, it is not just a 'Norway price' that can cause prices to rise. But the scheme that the government wants to introduce could help push prices in the wrong direction.
The consequences of the fixed prices will not only affect Norwegian consumers. Danish electricity prices may also be affected and, in the worst case, increase significantly.
This is because the Nordic electricity market is interconnected. For example, since 1977 the Danish electricity grid has been connected to the Norwegian one and vice versa.
And a change in one country can affect the others. When one country introduces a very low price, it can create an imbalance in the market.
The establishment of "Norwegian prices" may result in a less well-functioning electricity market in the Nordic region.
It is important to emphasize that this is an analysis of the potential risks of the Norwegian government's plan. The actual consequences are not yet known with certainty. That is, other than the prospect of cheap electricity with a 'state guarantee' for Norwegians.
