Comment: Support that the government will not provide

The Norwegian industry receives an electricity boost thanks to the European Union.

That’s a comment. The comment expresses the writer’s position

Just before Christmas, the energy-intensive Norwegian industry was paid large sums without any wire cutting or orchestra.

In total, the Hydro plants in Norway received NOK 1.4 billion in subsidies.

Hydro Aluminum in Sunndal received more than NOK 627 million. smelter king billion dollars last year.

This was the first time Hydro had applied for a subsidy in the scheme. To the company’s surprise – without them pressing for it – they were allowed to join.

The government did not like it. the He was against Hydro getting the money. Or more precisely: they were against companies that produce their own energy and that receive electricity subsidies.

Hydro much of its stream Self.

However, the European Union decided that it would also receive electricity subsidies. They think it’s equal treatment.

The scheme is called CO₂ offset. It aims to prevent companies from leaving Europe due to increased spending on electricity as a result of EU climate policy.

In search yet There are few indications of climate policy It led to a major industrial death in Europe.

And the government is not against the scheme at all, they are for it.

Norway paid the maximum rate, unlike many European countries which do not pay support at all. Sweden and Denmark did not provide support in 2020.

On the other hand, the Norwegian government expects to incur very large expenses for this in the future, all of that 100 billion Norwegian kroner the next ten years.

Hydro will escape with the lion’s share. But a number of others, such as Alcoa, Rec, Elkem and Norske Skog, are also receiving support. A total of about NOK 3.5 billion was paid last year.

So why was the government against Hydro getting this money?

They fear for the legitimacy of the scheme if it becomes too crude.

Despite the surprise gift, the group adapted quickly.

Access to sufficient new renewable energy and a solid CO2 offset scheme is crucial, said the plant manager at Hydro Sunndal when speaking about the good results in an interview with Tidens Krav before Christmas.

So, it is not the whole point that Norway is not involved in the subsidy war that has escalated between the US, China and the EU.

What matters to the companies that export is not the price of the energy per se, but what competitors have to pay.

The richest countries tend to subsidize the richest, to the chagrin of European Union countries whose coffers are depleted. They call subsidies distorting competition.

And rightly so, but is Norway being outdone?

Last year we had lower electricity prices than Germany. But Now introduce the Germans Inclusive Energy support.

Norway must still be able to handle it.

German consumers get The maximum price of electricity NOK 4.40/kWh at 80 percent of normal consumption. Thus they are liable to be billed higher than the Norwegians.

For German companies, the price cap is NOK 1.40/kWh for 70 percent of the electricity consumption. The rest must be bought at the market price.

If you buy a fixed-price Norwegian contract, you will get a lower price than that, but you get the disadvantage of committing yourself.

For gas, on the other hand, the German maximum price seems to be competing with Norwegian prices at the moment. This is why Fredrikstad Corporation The Kronos Titan has moved more of its production to its factory in Germany. They want support in norway and.

And they might, if they’re not bailed out by falling gas prices. The government is constantly leaking small drops improving subsidy schemes.

In the energy-intensive Norwegian industry, it is not the transition and industrial death that characterizes the picture.

Groups like Elkem, Alcoa on Lista, Mosjøen, Hydro, Finnfjord and Sauda seem to be doing well.

Sometimes they shut down production lines to sell the energy to the market, as it was more profitable.

But these tend to have long PPAs. Product prices were very good. Business relocation costs are also high.

In doing so, they receive millions in electricity subsidies from the state. Hydro got a real baby egg.

However, it may become more difficult in the long run for the energy-intensive Norwegian industry.

Because the problem is that we are not developing new power in Norway, while at the same time we have plans to use a huge amount of power.

If this happens, prices will rise and new projects will stop.

So one can worry more about the future in the midst of the energy price crisis.

Because blast furnaces need energy. You can’t run on subsidies alone.