Electricity prices - Norway NO2

Norwegian Electricity Market Overview

Norwegian Electricity Generation – Main Sources

Norway’s grid is overwhelmingly powered by hydropower. In a normal year, hydropower plants generate roughly 136–140 TWh, about 87–89% of total output. Norway’s mountainous terrain provides vast reservoir storage (about 87 TWh total) and flexible generation, which can be ramped up or down cheaply. Wind is the second-largest source. Onshore wind farms (65 sites, ~5 GW capacity) produce on the order of 10–17 TWh annually, roughly 9–11% of generation, though actual output varies with weather. (Offshore wind is only beginning to be built.) Solar and fossil/thermal sources play only a minor role: grid-connected solar is ≪1% (<0.5 TWh), and small waste/gas plants contribute ~2%. In short, Norway’s primary mix is ~90% hydro, ~10% wind, with other sources negligible.

Wind power in Norway has been growing. In 2024, wind turbines produced about 14.5 TWh – roughly 9.3% of electricity – up a few percent from 2023. Most wind farms are onshore, and new projects continue under government promotion. Solar remains very small (mostly rooftop installations). Because hydro can be regulated, Norway’s system can accommodate more intermittent wind/solar, but generation from these sources still fluctuates with weather.

Electricity Pricing for End Customers

Electricity bills in Norway consist of four main components: the wholesale energy price, network tariffs, taxes, and any subsidies. For example, the 2024 average household price (including grid and taxes, excluding one-time support) was about 134.9 øre/kWh. This breaks down as roughly 59.9 øre/kWh actual electricity energy cost, 36.0 øre/kWh for grid rent (transmission + distribution), and 39.0 øre/kWh in taxes.

• Wholesale/purchase price: Determined on Nord Pool’s power market (day-ahead and intraday). Retailers typically pass this through in spot-based contracts, or bundle it in fixed‐price deals. In 2024 the average spot price (area price) was about 60 øre/kWh.

• Network (grid) fees: Norway’s grid companies (statnett for transmission, ~150 DSOs for local distribution) set regulated tariffs. These average around 30–40 øre/kWh for households (varies by region and voltage level). Industrial/commercial customers also pay grid tariffs, often somewhat lower if they use high voltage.

• Taxes and duties: All consumers pay electricity tax and VAT on top of the energy+grid cost. Households face 25% VAT plus an electricity tax (~16.93 øre/kWh from April–Dec 2025, ~9.79 øre in Q1). Many industries get a reduced electricity tax (0.60 øre/kWh year-round for most manufacturing). VAT (25%) applies to the sum of energy+grid charges.

• Government levies/subsidies: There is no ongoing “green” levy (Norway’s renewable certificates ended in 2021), but a subsidy scheme (strømstøtte) reimburses most of the cost above a threshold. Currently (2024/25) households receive ~90% compensation for the spot price above ≈70 øre/kWh (including VAT), capped at 5,000 kWh/month. This substantially lowers bills during high-price periods. From Oct 2025 the government plans a new optional “Norway Price” scheme: a fixed 40 øre/kWh (ex-VAT) price for participating homes (up to a monthly usage cap), giving customers an alternative to volatile market prices.

Price Structure Example: As reported by Statistics Norway for 2024 (households):

Commercial/industrial bills have a similar breakdown except the electricity tax is near-zero (0.60 øre) and they typically receive no subsidy. (Also, very large users often negotiate bespoke supply contracts.)

Dynamic (Time-Varying) Tariffs

Definition: A dynamic electricity tariff (often called a spot price or time-of-use contract) is one where the consumer’s price per kWh varies (typically hourly) in line with the wholesale market price. Rather than a fixed annual rate, customers see different rates each hour. This lets consumers shift use to cheaper hours (e.g. when wind/solar is abundant) and aligns demand with supply. In practice, most Norwegian dynamic plans use Nord Pool’s day-ahead hourly price (elspot) as the base, plus a small retailer margin. Consumers usually get a smartphone app or online platform showing tomorrow’s hourly prices.

How it works: Each hour’s price = (Nord Pool spot price for that region/hour) + any fixed påslag (margin) + VAT. There is typically also a fixed monthly fee. For example, a contract might be “49 kr/month + 5.90 øre/kWh påslag” on top of the hourly spot price. Because the spot price varies with system conditions, bills vary accordingly.

Nord Pool and timing: Norway is divided into price areas (NO1–NO5); dynamic tariffs use the relevant area price. Normally the day-ahead auction prices (published at 12:00 for each hour of the next day) set consumer rates. Some advanced products can also incorporate intraday or real-time prices, but day-ahead pricing is standard.

Regulation: Under the EU/EEA Electricity Directive (2019/944, Art.11), member states must allow “dynamic electricity price contracts” where the price is tied to the national/regional spot market with matching settlement intervals. Norway (via EEA law) has implemented this: suppliers are explicitly permitted (even encouraged) to offer spot-based and time-of-use tariffs. There is no prohibition or special licensing needed, but providers must comply with general consumer rules. For example, the Norwegian Price Information Regulation (prisopplysningsforskriften) requires clear disclosure of prices and requires suppliers to give advance notice (typically 30 days) before changing fixed prices – although dynamic contracts change hourly by design. In short, dynamic tariffs are legally enabled and unbundled; they must simply meet consumer-protection rules (clear terms, billing transparency). Dynamic products are already “commonplace in Nordic countries”, and Norway’s regulator (NVE) oversees the market to ensure fairness.

Providers Offering Dynamic Tariffs

Many Norwegian retailers (especially the largest ones) offer spot-based deals. Major electricity suppliers with time-varying price plans include:

• Fjordkraft – Norway’s largest retail supplier. Offers a spot contract (e.g. “Strøm til spotpris”) with a fixed monthly fee (≈69 kr) and a small markup (~5.9 øre/kWh) on the Nord Pool price. The Fjordkraft app shows hourly prices, and the company emphasizes no hidden fees or advance payments. Targets residential and small business customers nationwide.

• Fortum (NorgesEnergi) – After Fortum’s acquisition of NorgesEnergi, their standard spot plan has a 49 kr/month fee + 5.90 øre/kWh påslag. This plan follows the hourly market price time-for-time with no binding period. Fortum (with Trygg Strømhandel certification) appeals to households and commercial clients seeking a simple spot contract (Fortum reports it as “Norges mest valgte” deal).

• Lyse – A major utility in Rogaland (SWECO), Lyse offers Lyse Spotpris for private customers. Pricing is 55 kr/month + 5.90 øre/kWh (no binding period). As with others, the wholesale price is passed on hourly. Lyse’s plan is marketed as straightforward: customers pay exactly the market cost of power (“samme som vi kjøper”), plus the fixed fee and påslag. This targets consumers in Lyse’s service area but is also available broadly.

• Å Strøm (Å Energi/LOS) – Part of the LOS Energy group, Å Strøm offers “Å Spotpris” contracts for customers with certain affiliations. For example, Å Spotpris – Partner costs only 29 kr/month + 3.90 øre/kWh (requiring membership via a partner organization). A similar Huseierne member deal is 29 kr + 3.85 øre. These are among the cheapest fixed fees and margins in the market. Å Strøm’s target is tech-savvy consumers (often homeowners) affiliated with partner groups; they emphasize a mobile app and low cost.

• Others: Several regional suppliers also have spot products. For example, Eidsiva Energi and TrønderEnergi (Troll Strøm) similarly offer spot tariffs (often via partnerships). Many smaller kraftselskap (municipal utilities) bundle spot products with local brands. (For brevity, the above four are the largest national retailers.) In all cases, these spot deals have no long-term lock-in – customers can switch away at any time – and simply pay the hourly price plus the stated fees.

Summary: By 2025, dynamic (hourly spot) contracts are mainstream in Norway, offered by the top retailers. Consumers choosing such a plan directly link their bill to Nord Pool prices and pay only a modest premium. This market choice is explicitly supported by regulation and reflects Norway’s flexible, market-based electricity system.

Peak and Off-Peak Hours

Norway NO2 2024 – Average Hourly Wholesale Electricity Price (Nord Pool)