Electricity prices, Q3 2001

The large increase in the price of electric energy has to be seen in context with the fact that the price of electric energy was very low last year. To a large extent this is due to much water in the water reservoirs at that time. After some years experiencing much precipitation and much water in the reservoirs in addition to mild weather contributing to lower prices and export of electric energy, the water reservoir levels has been lower this year. This has contributed to higher prices of electric energy and import. The reservoir level in week number 32 this year was 14.6 per cent points lower than the same week last year.

The average price of electric energy for households, taxes included, was 40.3 øre/kWh the third quarter this year. This is a 75.8 per cent increase compared with the third quarter 2000. North-Troms and Finnmark are exempted from tax on consumption of electric energy, and Nordland, Troms and Finnmark are exempted from value added tax. For households paying 11.3 øre/kWh in tax on electricity consumption and 24 per cent in value added tax, the price of electric energy on average was 41.4 øre/kWh the third quarter this year. The taxes then came to 46.7 per cent of the price of electric energy for households obliged to pay taxes. The grid rent for housholds the third quarter this year was on average 19.9 øre/kWh, value added tax excluded, according to preliminary figures from Norwegian Water Resources and Energy Directorate.

If you look at the development of prices of electric energy over some years, only the last years figures shows a large increase in the prices. Total price for electric energy and grid rent, taxes included, increased by about 8 per cent from 1991 to 2000. In comparison the increase in the consumer price index was 21.8 per cent in the same period.

Contracts tied to the spotprice cheapest

The prices of electric energy for households bying electricity on contracts tied to the spot price of electric energy was on average 20 øre/kWh the third quarter this year. This is 2.5 øre/kWh lower than the price of electric energy for households bying electricity at variable price (not tied to the spot price). Variable price are by far the most common deal for households. 78.2 per cent of the households in this quarterly sample survey have deals with variable prices of electric energy. Only 7.8 per cent have contracts tied to the spot price. In 1999 and 2000 contracts tied to the spot price has been the cheapest type of contract for the year as a whole. But in periods the price of electric energy with this kind of contract might bee relatively high when the spotmarket reaches high peaks of spot prices of electric energy.

Less price increase for the industry than the households

The price of electric energy for services the third quarter this year was on average 19.6 øre/kWh, taxes excluded. This is 1.6 per cent higher than the last quarter, and 62.9 per cent higher than the third quarter 2000. Compared with the 107.9 per cent increase in the price of electric energy for households in the same twelve months period, this is a relatively modest increase.

For manufacturing, energy-intensive manufacturing and pulp and paper industry excluded, the price of electric energy has increased by 44.5 per cent from the third quarter last year to the third quarter this year, taxes excluded. The price of electric energy for this group was on average without taxes 18.8 øre/kWh the third quarter 2001.

Lower prices in the wholesale market

While the prices of electric energy in the end-user market increased from the second to the third quarter this year, the prices of electricity in the wholesale market declined in the same period. This contributes to higher margins for traders of electricity in the third quarter this year than in the second quarter. Average price of wholesales of electricity the third quarter this year was 15.8 øre/kWh, taxes excluded. This is 7.1 per cent lower than in the second quarter this year.

See also

http://www.ssb.no/vannmag_en/

http://www.ssb.no/elektrisitet_en/

Tables:

• Table 1 Electricity prices in the end-user market, quarterly. øre/kWh
• Table 2 Electricity prices in the wholesale market, quarterly. øre/kWh
• Table 3 Range of electricity prices in end-user market and distribution of sold quantity in the sample
• Table 4 Time series covering quarterly prices of electric energy, taxes excluded. øre/kWh
• Table 5 Time series covering quarterly prices of electric energy for households, taxes included. øre/kWh
• Table 6 Time series covering quarterly prices of electric energy in the whole sale market, taxes excluded. øre/kWh