Norway to boost financial support for most vulnerable amid power price spike

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OSLO, Oct 22 (Reuters) – Norway’s new centre-left government on Friday proposed a one-off payment of up to 3,070 crowns ($369) for people receiving housing support in southern Norway to offset the impact of record-high power prices.

The country is the latest to try to mitigate the impact of high power prices on its citizens. On Thursday, France announced a 100-euro ($116) payment, while the European Union recently announced a number of measures it would consider to shield consumers.

“We see that the high power prices can be a big burden, especially for those with weak finances,” Minister for Local Government and District Policy Bjoern Arild Gram said in a statement.

The proposed additional payment in November would apply to around 66,000 recipients of housing support in southern Norway, out of a total population of 5.4 million.

The country is divided into five power price zones, with wholesale power in the three southernmost and populous areas hitting a record 146.26 euros per megawatt hour (MWh) on Monday.

Consumer prices are higher still after taxes and levies and, with power widely used for heating, have a big impact on personal finances.

Water reservoirs in the hydropower-dependent country remain below their 20-year average and grid bottlenecks limit how much power can flow from cheaper northern parts.

Southern Norway is also increasingly converging with even higher price levels in continental Europe and Britain.

Norway will also likely see higher prices in future amid rising demand from electrification of industrial processes and higher costs for emission allowances, an analysis by regulator NVE showed on Thursday.

Average wholesale power would reach roughly 50 euros/MWh by 2040, NVE said, up 10 euros from its previous forecast. Power demand is set to rise from 138 terawatt hours (TWh) at present to as much as 200 TWh in 2040.

($1 = 8.3291 Norwegian crowns)

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