Norwegians love generous power support. In Sweden and Denmark the situation is different.
The electricity subsidy in our neighboring countries has been far less generous than in Norway. In Denmark, households receive a check in the post. In Sweden, the support ended after March.
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Since last autumn, Norwegian electricity customers have been well helped by the state in the face of high electricity prices.
The state covers 80 percent of the bill for the price above 70 øre per kilowatt hour. From 1 October this will increase to 90 percent.
I March Finance Minister Trygve Slagsvold Vedum estimated that the government will spend DKK 19.7 billion in the scheme in 2022.
Recently, however, the pressure has increased on the government that heavier protection is necessary.
The LO confederation has demanded a total price that does not exceed 70 øre per kilowatt hour. AP rapporteurs in the south-west country have also demanded support for companies.
In the Storting, the majority is in favor of having representatives from vacation if necessary to adopt new measures that can help situations.
The government announced on Wednesday that it is concretely working on new measures. These can be in place as early as next week and will also be aimed at the business world.
In that case, Norwegians will get an extended electricity subsidy which is already far more generous than in our neighboring country.
Swedish steps
Because it is not just Norway that has gotten away with high electricity prices in the past few years.
In the most densely populated stream area in Sweden, SE3, has the average price this year host at just under one Norwegian krone per kilowatt hour. Further south it has been slightly higher. It is also abnormally expensive for our neighbors to the east.
This led the Swedish government to set aside six billion Swedish kroner for such a project this winter “Electricity price compensation”. This
- originally only applied to December, January and February.
- covered all Swedish households with a monthly consumption of over 700 kWh. The compensation varied from 200 Swedish kroner monthly for households with the lowest consumption, to 2000 Swedish kroner for families at the top level with consumption above 2000 kWh per month.
- was continued for the month of March, but only for the southernmost price areas in Sweden. In addition, a new lower consumption level was introduced: 100 Swedish kroner was given for consumption between 400 and 700 kWh.
One Swedish krone is equivalent to 0.95 Norwegian kroner.
After March, the compensation for high electricity prices lapsed. Despite prices continuing to be high.
Danish lump sum
In Denmark, the average price for both of the country’s price ranges has been 1,766 Norwegian kroner per kilowatt hour, according to figures from NordPool.
Danish prices are consistently higher than in Norway and Sweden. This is due to both the country’s type of power production and the fact that the Danish power market is more closely linked to the European one.
In Denmark, aid has come in a quite different form. Much of the heating in Denmark is done with the use of gas, various district heating and biofiring, in addition to electricity.
- In March therefore decided the government to give a one-off payment of 6,000 Danish kroner to all households with a total income of less than 650,000 Danish kroner (after AM contribution, a flat tax of 8 percent of all income).
- The “heat check”, as it is called, should not only compensate for increased electricity costs, but also costs for other heating sources, which have increased in price in the past year.
- According to the Danish government, approx. 419,000 households expect to receive the support cheque.
Times the cost of the scheme in excess of 2.5 billion Danish kroner.
In addition, the government has set a pot of 200 million Danish kroner. Municipalities can seek money from this to help like most with high energy prices, e.g. recipients of cash benefits and pensioners.
One Danish krone corresponds to 1.33 Norwegian kroner.
Different leeway
In summary, it is therefore a very different summer that has gone to compensate the countries’ populations for increased electricity costs.
One reason could be that the public profit on power production is very different in the Nordic countries, says Olav Botnen. He is an analyst at Volue Insight and follows the Nordic power markets closely.
The differences are due to both the cost of power production, type of power production and ownership structures in the power industry.
The result is very different economic room for action.
– It becomes a more difficult puzzle when you have to cover electricity support through other items on the state budget, instead of through huge power revenues. That is probably one reason why we get such generous support schemes in Norway, says Botnen.
Economics professor at the University of Oslo Nils-Henrik M. von der Fehr shares the analysis.
– In Norway, runaway support schemes are not a state financial problem to the same extent as in our neighboring countries. A main difference to the rest of Europe is that the support schemes there have been aimed to a much greater extent at households with low incomes, he says.
Von der Fehr also believes that the demands for power support in Norway are a result of expectations during the pandemic.
– During the pandemic, we got used to the state stepping in when it becomes expensive and difficult. You don’t have that effect as a strength in other countries, he says.