January 27, 2023

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Statecraft – Government with marching orders to NRK Westland

Industry Minister Jan Christian Westray (AP) today called Statecraft’s management to a meeting where he said he “expects them to be active in the competition for fixed-price customers”.

State-owned Statkraft is Norway’s largest power producer.

– I want Statecraft to be a one hundred percent state-owned power generation company, Vestre tells NRK.

More specifically, the March order meant that Statecraft would have to lower its prices and contribute to competition for fixed-price contracts. «would be better”.

For NRK, the ministry points out that the contracts awarded by Statkraft are higher than those awarded by competitors (see below).

Statkraft’s president Thorhild Widvey tells NRK that they had a good meeting with the Minister of Industry, where they clarified what he expects of the company.

– We are very keen to offer these fixed price contracts. We are committed to being as competitive as possible and we see that every day,” he says.

At the same time, he insists that the company has to deal with market prices even though it has a huge surplus.

– We are very much bound by a set of rules on how prices are set, so it can’t be mixed with the state’s surplus.

More flexible contracts are needed

In recent weeks, the Industries Minister has given political prestige to fixed price contracts for the commercial sector. was initiated In early December.

Since then, contracts have mostly been awarded shutup your mouth And accused of being “expensive”, “too cheap” and “stiff-legged”.

One Overview in Europower newspaper It shows that only 127 out of 200,000 Norwegian companies agreed to the industry minister’s “failure of authority”.

Westray responded that he thought company managers were looking at the situation to get the cheapest deal possible.

At the same time, the minister sees the need for flexible contracts where companies can sign contracts to suit their consumption.

– I also took this with Statkraft today. Westray says he expects them to be on the ball there as well.

To this, power companies counter that they are bound by a “rigid framework” and that the Commerce and Industry Ministry and the Finance Ministry are sending “mixed signals”.

Statecraft's logo on Lysagar.

Industries minister sharpens tone towards statecraft The background is that the fixed price market is not functioning as the government wants.

Photo: Lise Åserud / NTB

A key point in the debate is that fixed price contracts should be based on “market” considerations.

For example, if a power company strengthens their market position, can they sell fixed price contracts at 30 øre per kWh? Munnetra Party has liked First of all a response from the minister without any response.

– Vestre tells NRK that if you believe that you can strengthen the income in the long term, you can fulfill the condition of business-related contracts by staying low.

The Finance Ministry is on its side mentioned That is the company No Allowed to reduce prices beyond “commercial” means.

These agreements have received much criticism as undeserved

Statkraft does not offer fixed price contracts directly, but sells them through electricity companies Fjordkraft and Fortum.

In addition, fixed price contracts are offered by Lyse, Hafslund and Å Energi (Entelios).

Lies is the operator with the most contracts today, but has so far reserved the offer for customers in southwest Norway (NO2).

On Friday, the company announced that it will expand the offer to all of southern Norway through an agreement with Häfslund.

The offer includes a fixed price component of 90 per cent consumption. Many have criticized it for not being able to get more than 70 percent consumption so far.

We see that customers want to keep only a part of their consumption at fixed prices, but we want each customer to evaluate themselves, says Ane Marte Hausken, managing director of Lyse Energi.

He adds that fixed price contracts have received “a lot of unqualified criticism” among Norwegians.

These agreements may seem completely new to many. In fact, they are copies of agreements that apply to certain areas of the industry and are over 30 years old.

– I would like to commit myself to a fixed price contract

At Balestrand in Sogn, Kvikne’s hotel was forced to increase its prices to finance electricity costs.

– If it is possible, and if the price is livable, I would like to enter into a fixed price contract, says hotel director Sigurd Gwynne.

The problem is that there is no such agreement with the power board of which he is a customer.

– So far I haven’t received a single offer, says Gwynne.

Now he believes the March directive from the Ministry of Commerce and Industry will stimulate the market.

Yes, we are looking forward to it.

Quigne Hotel

Balastrand: The manager of Kvikne’s hotel, Sigurd Kvikne, could well imagine a fixed-price deal. But till now I have not received even an offer, he says.

Photo: Kviknes Hotel