January 28, 2023

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- You'll have to consider production at night - E24

– You’ll have to consider production at night – E24

Butcher Abrahamsen is now four degrees cooler at work than normal. From the new year, he can enter into a fixed price agreement for electricity, but the prices are not so attractive. – The general manager says it’s very scary to have to pay so much.

Christmas Travel: December is festive in many ways, according to Slacker Abrahamson. Trading volume in December weeks is four times higher than in January. Electricity prices today are deplorable for profitability.
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Tuesday afternoon at 17. Electricity in southern Norway costs more than seven kroner per kilowatt-hour. Including taxes, the figure is nine crowns.

Electricity wasn’t that expensive a few months ago.

Thorbjørn Abrahamsen, owner and operator of Slakter Abrahamsen, strikes right in the middle of the busiest time of the year.

– We live on what we sell, so now we work as much as we can afford, he says.

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12 degrees inside

The family business is located in Larvik, in the 2nd energy district. This is where prices have been consistently higher this year.

Abrahamsen says the September and October projects in total were 30 percent higher than last year’s total. And with more pricing announced in December, expect the year to end with another huge bill.

Fifth generation: Thorbjørn Abrahamsen leads the family business, which was founded in 1897.

Abrahamsen has taken steps to reduce electricity costs. In the room where the sausages and buns are produced, the temperature is now 12 degrees. He says it’s four to five degrees lower than normal.

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– I don’t know how much more we can save. He is not warm anywhere in the company. We might have to think about production at night soon. We can’t turn off the freezers or fry at half speed either.

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Fixed price agreements are scary

Abrahamsen says the family business is not eligible for the electricity subsidy that was introduced earlier this fall.

From the new year it will be possible to enter into fixed price agreements for electricity for business, following a tax change that will make this easier.

This is the centralized solution launched by the government to help companies with electricity prices after the New Year, when the Business Community Support Scheme ends.

In the past week, you can see where the prices for long-term agreements will be.

In the second energy zone, you can commit to NOK 1.57 per kWh for three years, NOK 1.11 for five years or NOK 0.88 for seven years.

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Seven years commitment required for a fixed price agreement under 1 kr: – Not very convenient

In the three-year period 2018-2020, the price of electricity, by comparison, was less than NOK 0.3 on average.

Abrahamsen says he hasn’t had time to sit down and look properly at fixed-price agreements yet, but he thinks they look expensive.

– It is very scary to have to pay so much for electricity. It doesn’t sound wise, but at the same time you don’t know how much electricity will cost in the future.

Complex application process

While Abrahamsen has come to terms with the fact that there wasn’t any electrification support, Askim’s Kransekakebakeren has been hard at work on the app lately.

– It was a very complicated case. I had an electrician and then it took a week and a half, so I just made it before the application deadline. It just wouldn’t have worked on its own, says Managing Director Arild Vigen Christoffersen.

Action Taken: The wreath cake baker did what he could to save electricity, including setting the freezer temperature by two degrees.

The government scheme provides subsidies for 45 percent of electricity prices over 70 øre per kilowatt-hour if the company adheres to environmental measures.

With today’s electricity rates, it would be very expensive to run a cake production as well as have a freezer store open at all times of the day.

– This means that even if we close production, we will always have high consumption. It is unsustainable if the current price situation persists for several months. I am very worried about where this will end up.

Christoffersen has also not had time to independently evaluate the fixed rate agreements that can be entered into now. But when he consulted with professionals, he says, the message was clear.

– I was strongly advised not to enter into these agreements.

– But who can predict the price of electricity in three years? It is very floating. In any case, none of our production calculations take these high prices for electricity into account.