Sunday, October 24

Expect a sharp price drop – E24

September offered the highest electricity prices in the Nordic region. Prices are now expected to drop due to heavy rains. It may be that we have seen the peak and that the crisis has been avoided, says the electrical analyst.

It bodes well for electricity prices in the coming weeks. Large amounts of precipitation will fill water reservoirs and provide cheaper electricity to Norwegian homes during winter, analysts predict.

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Low rainfall over a long period of time has driven up electricity prices. But this can change now.

There has been a change in climate and it appears that solid rains in southern Norway will fill the reservoirs with water. Therefore, prices go down, says the director of energy trading, Andreas Myhre, of the company Agder Energy Entelios.

He emphasizes that prices will remain high, but that they will fall in the future and that there will most likely be no new electricity price records.

In southern Norway, prices will drop 10 to 12 øre with the expected rainfall. This applies to the entire winter. If it had been dry, the prices would probably have risen to 50 øre.

Andreas Myhre, director of energy trading at Agder Energi Entelios (right) joined the E24 podcast this week to discuss electricity prices with Kjetil Malkenes Hovland and Sindre Heyerdahl at E24.

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You can avoid an energy crisis

In total, prices will fall by around 15 percent according to Storm Geo’s calculations.

This can mean a price drop of around 88 to 75 øre per kilowatt of electricity.

Last week we received rainfall beyond normal, and this week and the next are expected to be very wet. Over the course of three weeks, we will have power that can correspond to 26 terawatt hours (TWh) in the Nordic hydroelectric system, says Storm Geo’s chief analyst Sigbjørn Seland.

There is ten to eleven more terrawatt hours of energy in the form of precipitation, up to the norm. Electricity consumption in Norway is around 130-140 terrawatt hours per year.

There are large amounts of energy and we are less likely to have a crisis. There was a general expectation that prices would rise. Now we may have seen the peak and the crisis has been averted, says Seland.

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Linda Ørstavik Öberg, Huseierne’s energy policy advisor, believes that a new government should implement better support schemes for energy saving measures.

“Power measurements should be simpler”

On behalf of consumers, we are very happy to hear this, says Linda Ørstavik Öberg, Huseierne’s energy policy advisor.

She says homeowners have never received as many calls from concerned electric customers as they have recently. Many people struggle to pay the bill, and many want more help and support.

That is why it is so important that, in the long run, we put households in a better position to cope with fluctuations in electricity prices, says Ørstavik Öberg, and aims to implement better support schemes to implement threshold measures low in homes such as re-insulation, window replacement, and heat pumps.

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Europe affects the price level

Another explanation for what the recent weather may have affected electricity prices is the record price level in Europe. This, in turn, is largely due to record coal and gas prices.

An error in a gas pipeline from Russia to Germany has led, among other things, to the failure of the German energy market.

It is fully taking off in Europe. And it will affect entire food chains. We will see a difficult energy market to supply in the future, says Myhre of Entelios.

He points out that rising gas prices increase the money in Norway’s treasury, while consumers have to come out with more electricity. Gas prices would not have been record-breaking unless electricity prices had skyrocketed. The energy market is affected by several factors.

The Oil Fund sweeps 15 billion a week due to the increase in gas prices. This is the same amount Norwegian consumers pay in electricity taxes per year, Myhre says.

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