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Rising energy prices in Norway: How to get the best deal

The average price of electricity for households in Norway is more than three times higher than the same time last year. Here are The Local's tips for getting the best bang for your buck.

Rising energy prices in Norway: How to get the best deal
Here's our tips for getting the best energy deal in Norway. Photo by Fré Sonneveld on Unsplash

A new analysis and market comparison from data collection firm Statistics Norway has found that the cost of electricity for households excluding taxes and grid rent was 50.9 øre per kWh in the second quarter of 2021. 

This is three times higher than the same period last year. In its quarterly report, the Norwegian Water Resources and Energy Directorate (NVE) emphasised that higher fuel prices in Norway and increasing costs in the European market were behind the rises. 

When considering grid rent and taxes, the average price of electricity in Norway was 116.1 øre kWh.

What type of arrangements offers the best deal? 

Households with fixed-price contracts paid on average the lowest prices for electricity in the second quarter of this year. The cost of a new fixed-price contract that lasts a year or less was around 50.3 øre per kWh when including taxes and fees. This is around roughly half the average that Statistics Norway reported. Surprisingly only 2.5 percent of homes in Norway have a fixed price contract despite the lower prices. 

Those with a new fixed price contract taken up during Q2 that will run for more than a year get a slightly better deal than those with a fixed price contract that will last for a single year or less. 

You’ll be able to see which arrangements cost what in the graph below. 

Electricity prices according to arrangement. Source: Statistics Norway

Due to the rising prices, those with variable contracts, either tied to the spot price or not tied to a spot price, paid more. 

A spot price contract, sometimes called purchase price or market power agreement, is calculated daily by the Nordic power exchange Nord Pool. Under a spot price agreement, customers pay the same price as the electricity supplier but instead pay a surcharge and fixed monthly price to the energy company. 

Tips for getting the best deal?

The best deal isn’t always what looks like the cheapest on paper. For example, fixed-price contracts are traditionally pricier than spot contracts. However, a fixed-price deal can be ideal for many on freelance contracts or who like to work within a budget as you know your monthly energy bill will be the same.

This is vital for many as prices can fluctuate massively between the winter and summer when more energy is needed to heat homes as temperatures plummet into the minuses. 

In addition to this, as prices are expected to rise throughout the rest of 2021 through 2022 following low prices in 2020, it may be best to sign a fixed-term agreement for a year to try and stay ahead of the curve should prices skyrocket in the winter. 

Typically, though, if you don’t need to keep a tighter eye on your outgoings and you’re OK with the idea of the prices varying throughout your contract, then a spot contact could offer the best overall value. 

In most cases, these wind up being cheaper because they pose the least risk to electricity companies profit margins as you are paying the same price they are in addition to the surcharge, which guarantees a profit for the companies. 

Shopping around is also essential wherever you are, and Norway is no different. However, if you want to get the best deal where you are, it’s best to use a comparison site such as strøm.no. Comparison sites let you compare the different types of agreements and offer you a price based on where you live, how much energy you use, and your property’s size. Shopping around on comparison sites can save you thousands of kroner a year. 

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MONEY

How do food prices in Norway compare to the rest of Europe? 

Known just as much for its high prices as its stunning scenery, Norway doesn't have a reputation as a cheap place to live. But how much does food cost, and how does it compare to the rest of Europe? 

How do food prices in Norway compare to the rest of Europe? 

Famously known for being on the pricey side, Norway has many factors that draw foreign residents, such as the scenery, wages and work-life balance. 

However, one common complaint is the high prices. Is the cost of food and groceries as bad as everyone says? 

Unfortunately, according to the statistics, Norway lives up to its reputation for expensive food and groceries. 

Eurostat, which monitors price levels across the EU, EEA and EU candidate countries, has ranked Norway as the country with the second highest price level index for food and non-alcoholic beverages.

Out of the countries monitored by the stats agency, only Switzerland had a higher price level index. A price level index measures the price levels of a given nation relative to other countries. This means that compared to the rest of the other countries measured, food and non-alcoholic beverages in Norway are the second most expensive overall. 

According to Eurostat’s data and price level index, prices in Norway were 49 percent higher than the EU average in 2021. Norway also had the highest price for fruits, vegetables, potatoes, and ‘other food’ products. ‘Other foods’ consist of chocolates, sugars, jams etc. 

READ ALSO: Why food in Norway is so expensive

In addition, non-alcoholic beverages in Norway were also the most expensive found among 36 European countries. The price of alcoholic drinks in Norway lived up to their reputation for priciness, with the cost of alcoholic beverages being 160 percent higher than the average and the second most expensive after Iceland

Scandinavia as a whole has a reputation for high prices, so how did Norway compare in this regard? 

Finland had the lowest overall food prices out of Scandinavian countries when measured by the price level index for food and non-alcoholic beverages. This was followed by Sweden, which had a score of 117, Denmark with 120 and Iceland with 139. 

This highlights that even among the Nordics, Norway is an expensive country for food. 

One noticeable trend is that the food prices in Norway are becoming less expensive compared to the European average. In 2018, food prices in Norway were 63 percent higher than the European average. Three years on, this had fallen to 49 percent. 

Even though the prices are high, is it really that expensive when considering wages? 

While food is certainly more expensive in Norway than in most countries, wages are also considerably higher. 

For example, the average monthly salary in Norway was 50,790 kroner per month in 2021. This equates to just over 5,000 euros. In 2022, the estimated monthly average wage in the EU was around 2,570 euros. However, it’s worth pointing out that large differences exist between EU countries. For example, the average monthly wage in Bulgaria was estimated to be around 852 euros, while in Denmark, it’s estimated to be about 5,979 euros (44,514 Danish kroner). 

Therefore, a more accurate way of measuring the true cost of food would be to measure how much of a household’s monthly income is spent on food. 

In Romania, food made up more than a quarter of household expenditure, making food more expensive there for households as it eats up a larger chunk of consumers’ budgets, despite lower prices than the EU average. Across 36 countries measured by Eurostat, food and non-alcoholic beverages made up around 13 percent of total consumption expenditure by households. 

In this regard, Norwegians actually spend less money on food than other European households. Food and non-alcoholic beverages accounted for 11.3 percent of households’ total spending in 2022, according to Statistics Norway

Typically, someone aged 31-50 years will spend between 3,100 – 3,660 kroner per month on food, according to the Consumption Research Norway’s (SIFO) Reference Budget for Consumer Expenditures

So even while Norway spends more money on food, it’s less expensive overall as it takes up a lower portion of household expenditure. fra

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