The electricity price increased substantially in 2021 and 2022 to record high levels. In the first quarter of 2023 the electricity price was somewhat lover, but still very high compared to the historical average, according to new figures from the electricity price statistics.
The price of electricity for households including grid rent and taxes, but before electricity support is deducted, was on average 182.3 øre per kWh in the first quarter of 2023. The price of electricity amounted to 110.5 øre per kWh of the price, while grid rent and taxes amounted to 29.1 and 42.7 øre/kWh respectively.
The electricity support for households from the government totaled high 38,6 øre/kWh on average in first quarter, 64.1 øre/kWh lower than the previous quarter. The total price household paid for electricity (including grid rent and taxes) and after electricity support is deducted from the bill, was 143.8 øre/kWh. This is 11.3 per cent lower compared to the previous quarter.
When electricity support is deducted from the total price for households, the price in first quarter is still about 26 per cent higher compared to the average price in first quarter the last five years, says senior advisor Thomas Aanensen.
The electricity support for households was introduced by the government in December 2021. It provides a deduction on household electricity bills at times when the average market rate for electricity exceeds 70 øre per kilowatt hour for one month.
Electricity price before electricity support is deducted twice as high as normal
The average price of electricity for households, excluding taxes and grid rent, was on average 110.5 øre/kWh in the first quarter, this is 35 per cent lower compared to the fourth quarter of 2022.
– For the last five years the average price of electricity for households in the first quarter, excluding taxes and grid rent, was about 59 øre/kWh. This year the price in first quarter was almost twice as high, says Thomas Aanensen.
– It is important to remember that the electricity price presented here is an average for the whole country. For some time now there has been a large price difference between the Northern and Southern part of Norway.
Lower electricity prices in the spot market in the Southern part of Norway in first quarter is related to the fall in gas and electricity prices in Europe in recent months. Also, the resource situation in the Norwegian hydro power system has improved compared to much of 2022. Still, electricity and gas prices are at a very high level compared to the situation before the European energy crisis.
Variable price contracts most expensive in first quarter
Households with variable price contracts paid the highest price in the first quarter of 2023 with an average electricity price of 196.4 øre per kWh, excluding taxes and grid rent.
The Elspot price is derived from the Nordic power exchange (Nord Pool AS) from the participants’ combined demand and supply for electricity the next day. The price and volume are determined for each hour of the day. The Elspot price can vary between the different Elspot bidding areas depending on market conditions. Norway is normally divided into five Elspot areas (NO1-NO5). contracts are the most common contract type for households (see figure 3). In first quarter spot price contracts totaled 108.5 øre/kWh.
The price for different types of fixed price contracts for households:
- New fixed-price contracts, lasting 1 year or less: 59.5 øre/kWh
- New fixed-price contracts, lasting more than one year: 70.9 øre/kWh
- Older fixed price contracts: 53,5 øre/kWh
Many electricity suppliers have recently stopped offering new fixed price contracts because of the great uncertainty on the future price of electricity. The price on the fixed price contracts still available to households depends on the spot price area that the households belong to. There price difference for fixed price contracts between the Northern and Southern part of Norway is large.