Norway to help ease the power price pain for businesses

OSLO – Norway‘s government on Friday presented a long-awaited package of loans and subsidies to reduce the impact of sky-high power prices for businesses, joining other European countries seeking to ease the energy crunch.

Governments across the region have been racing to present measures to protect consumers and industry from more expensive energy bills. Read full story

The subsidy scheme will cover companies with power costs exceeding 3% of revenue in the first half of 2022, costing a total of 3 billion Norwegian crowns ($292.5 million), industry minister Jan Christian Vestre told a news conference.

“On the one hand, we must avoid creating further pressure on the Norwegian economy, while at the same time we want to give electricity-intensive companies help to adapt,” Mr. Vestre said.

Norway‘s NHO business lobby, which took part in negotiations on the measures, said it backed the plan.

The subsidy presented by the center-left government will compensate 25% of power rates above a threshold of 0.70 Norwegian crowns per kilowatt hour and will be capped at 3.5 million crowns per company.

In addition, companies can borrow up to 50 million crowns, he said.

The scheme is intended to last until the end of the year, with the government planning tax changes from January to simplify and provide incentives for fixed-price, long-term power supply deals at less than current elevated levels.

Wholesale power prices in southern parts of Norway have soared by 700% over the past year from 0.50 crowns/kWh to 4 crowns/kWh owing to a combination of high European gas prices and a dry year in the hydropower-dependent country. Read full story

Norway is already subsidizing household electricity bills and has also provided help to agriculture and greenhouses. However, other businesses with relatively high power consumption, such as bakeries, butchers and dry-cleaners, have had to absorb price spikes in full. – Reuters