Norway's proposed 'national electricity price' for businesses called 'extremely bad idea'

The Norwegian government is exploring the possibility of introducing a "Norgespris" – a national electricity price – for businesses, following a directive from the Storting (parliament). However, the proposal has drawn sharp criticism from Ragnar Torvik, a professor of economics at NTNU and head of the government's advisory committee for fiscal analyses.

“

It is an extremely bad idea to introduce price support for the business sector.

Torvik labeled the idea of subsidizing businesses' electricity costs as an "extremely bad idea." He argued that for a market economy to function efficiently, businesses must be exposed to actual market prices. While acknowledging that supporting households against high prices might have some justification, he asserted that businesses should not be insulated from price fluctuations. Torvik suggested that if businesses are subsidized during high-price periods, they should also contribute more when prices are favorable, a scenario he finds unlikely to be proposed.

“

It is madness that our businesses should bleed because politicians pursue energy policy from backward land, with the import of European electricity prices spilling over to our own cheap and renewable energy.

The debate involves differing political viewpoints. Parties like the Centre Party (Sp) and Red (Rødt) are pushing for electricity support for businesses, citing concerns that high energy costs could cripple many companies, especially after a dry winter. They argue that Norway should be willing to challenge EU regulations if necessary to protect its domestic industries. Conversely, the Labour Party (Ap) and Conservative Party (Høyre) have proposed alternative measures. The potential cost of such a scheme is a major concern, with estimates suggesting it could run into tens of billions of kroner, diverting funds from other potential uses like tax relief or welfare services. The government's own projections show household electricity support and "Norgespris" already costing 21.5 billion kroner this year, an increase of 10 billion from previous estimates.

“

The Centre Party is very concerned about the business sector. We have many small and large business owners who are completely dependent on electricity to produce their goods. If we have a dry winter, I fear that much of the business sector will break. The Centre Party is not willing to go along with that.