Background information

The increase in electricity prices in the autumn 2021 created major problems for many electricity consuming enterprises that had not negotiated fixed electricity prices. The huge price fluctuations in 2022 destroyed the market for fixed price agreements for electricity, and in September, the government introduced a strategy to facilitate a market for fixed price agreements that could work better. It proposed a change to the ground rent tax on hydropower.

Content of measure

The government’s proposal to change the ground rent tax on hydropower for fixed price agreements aimed at facilitating a market for such agreements that could make electricity costs more predictable for electricity consuming industry. The ground tax for hydropower was originally based on the spot market price. In such a tax regime, a volatile spot market makes it difficult for power producers to calculate a price for fixed price agreements. By shifting the base of ground rent tax to the actual income of the power producer through the fixed price agreement, the government hoped that electricity suppliers should be able to offer standardized fixed price agreements for periods of 3, 5 and 7 years. The scheme is limited to agreements with a fixed volume. The scheme was implemented from 1 January 2023 and is initially assumed to be most relevant for the business sector, which has not been part of the electricity subsidy scheme. The measure must be seen in conjunction with other measures, such as loan guarantees and the new energy subsidy scheme for businesses , the government argues.

Use of measure

Use of the measure is unknown.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government	No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Direct consultation outside a formal body	Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

• Social partners jointly
• Main level of involvement: Peak or cross-sectoral level

Involvement

The government’s proposal was based on input from the power industry and was subjected to consultation.

Views and reactions

In December 2022, the leader of the Confederation of Norwegian Enterprise (NHO), Ole Erik Almlid, said that the organisation supported the initiative to establish a functioning market for electricity at a fixed price. However, in December 2022, the organisation received daily feedback from its members who said that the current fixed price offers were not suitable and too costly.

Sources

• 30 September 2022: Help is now coming to the companies (www.regjeringen.no)
• 16 December 2022: The electricity support for businesses must be extended, improved and simplified (www.nho.no)