Very low electricity price in 2020

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The average price of electricity for households in 2020, excluding taxes and grid rent, was 20.7 øre per kWh. This is 57 per cent lower compared to 2019 and the lowest price recorded since 2002.

Written by: Thomas Aanensen

In their annual electricity market report, the Norwegian Water Resources and Energy Directorate (NVE) emphasized that record amounts of snow in the mountains in the winter of 2019/2020 and large hydrological surplus in 2020 was important reasons for the very low electricity price.

The overall average price of electricity for households, including grid rent and taxes, amounted to 80.3 øre per kWh in 2020. This is 31 per cent lower compared to 2019, according to new figures from the electricity price statistics. The electricity price was 20.7 øre per kWh, and the grid rent and taxes amounted to 28.6 and 31 øre per kWh respectively.

Figure 1. Electricity prices, grid rent and taxes for households

Electricity price Taxes Grid rent
2012 29.1 25.8 26.3
2013 34.8 27.1 26.4
2014 30.6 27.1 26
2015 26.7 29.1 26.2
2016 31.6 33.0 27.2
2017 34.4 34.2 27.9
2018 48.6 37.6 28.7
2019 48.7 37.2 30.0
2020 20.7 31.0 28.6

Spot price contracts cheapest

Households with contracts tied to the spot price had the cheapest contract type in 2020 with an average electricity price of 17.8 øre per kWh, excluding taxes and grid rent (see figure 2). Spot price contracts are the most common type of contract for households. Variable price contracts were significantly more expensive compared to spot price contracts in 2020, with an average electricity price of 30.4 øre per kWh, excluding taxes and grid rent. The category older fixed-price contracts was the most expensive contract type last year with an average electricity price of 35.6 øre per kWh excluding taxes and grid rent. Few households have fixed-price contracts, and these contracts represent a very low share of total electricity consumption for households.

Figure 2. Price of electric energy for households, taxes and grid rent excluded. 2020

Øre/kWh
New fixed price contracts – 1 year or less 27.9
New fixed price contracts –1 year or more 34.2
Older fixed-price contracts 35.6
Contracts tied to spot price 17.8
Variable price (not tied to spot price) 30.4

Low electricity price for service industries and manufacturing

For service industries, the average price of electricity, excluding taxes and grid rent, was 17.1 øre per kWh last year. This is as mush as 62 per cent lower than in 2019. Also in manufacturing, excluding power-intensive manufacturing, the average price of electricity was 62 per cent lower compared to the year before. The price, excluding taxes and grid rent, amounted to 16.2 øre per kWk in 2020.

Much of electricity used in power-intensive manufacturing is sold through fixed-price contracts, hence the price change less over time. The average price of electricity, excluding taxes and grid rent was 28.4 per cent in 2020, an 11.8 per cent drop compared to the year before.

Figure 3. Prices of electric energy, taxes and grid rent excluded

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Households 16.2 15.2 14.1 20.6 20.3 41.4 27.9 26.7 41.3 28.1 39.1 35.2 46.8 45.3 29.1 34.8 30.6 26.7 31.6 34.4 48.6 48.7 20.7
Services 16.5 14.8 13.3 19.4 19.4 31.1 24.9 24 36.9 27 35.4 34.5 45.7 42.3 28.5 33.6 28.9 24.7 29.2 30.8 44.9 44.6 17.1
Manufacturing excl. energy-intensive manufacturing 16.3 15.1 13.9 18.4 19.8 26.3 23.7 22.3 28.4 23.3 28.8 29.8 36.4 32.1 27.8 32.4 27.6 23.2 28.7 30.2 43.9 42.7 16.2

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