Norwegian consumer watchdog sees significant increase in energy deal complaints

Problems with energy deals, used cars and renting were some of the most common issues the Norwegian Consumer Council dealt with last year, with the number of issues with electricity agreements, in particular, seeing a huge jump.

Pictured is a energy meter.
Energy deals saw a huge increase in the number of inquiries lodged with the consumer council. Pictured is a energy meter. Photo by Arthur Lambillotte on Unsplash

Power, transportation and a place to live are the three most essential things, besides food, that people need to meet their most basic needs.

Unfortunately, issues with these were the most common reasons households in Norway contacted the consumer rights watchdog, the Norwegian Consumer Council last year.

While the number of people lodging inquiries over second-hand cars and problems with renting remained relatively stable compared to previous years, the number of people who had issues with their energy agreements increased by over 70 percent.

“Electricity sellers violate consumers’ rights and push and trick customers into paying too much for electricity. Not surprisingly, this creates many angry and despairing consumers,” Inger Lise Blyverket, director of the Norwegian Consumer Council, said in a report.

“In the past year, we have seen electricity customers being thrown out of agreements with fixed prices and price caps, sky-high demands for advance payment, variable customers with shock bills and companies that embezzle the customers’ right of withdrawal. In addition, there are challenges with telephone and door sales, electricity invoices and the compensation scheme,” she added.

The director of the consumer rights watchdog said tighter regulations and the withdrawal of providers’ licences when they routinely break the rules would be one solution for cutting down on issues.

The consumer council’s guidance service received some 52,000 thousand complaints last year. Problems with used cars accounted for under ten percent of inquiries and were the most common issue. After that, it was power agreements and then rental disputes.

Similar to energy agreements, complaints about airlines saw a large spike in 2022, increasing by 88 percent. The summer of 2022 saw several strikes affecting air travel in, out and around Norway. First was an aircraft technicians’ strike, then a strike of SAS cabin crew in Norway, Sweden and Denmark.

Airlines affected by the strike, such as SAS, have received flack numerous times from watchdogs for their failure to pay out compensation to those affected by delays and cancellations triggered by the strikes in a timely manner.

“Many desperate consumers got in touch when the planes were left on the ground. But, unfortunately, the company’s handling of refunds and compensation has also generated many questions and legitimate irritation,” Blyverket said.

The director of the Norwegian Consumer Council said a large number of conflicts were triggered by a failure to have the proper paperwork in place between consumers and a provider of goods and services.

“Many of these cases are probably connected to the fact that there are amateurs and consumers on both sides, and the level of conflict would probably have been much lower if the parties were better at documenting what was agreed,” she said.

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‘There’s not enough gas in the world’: Can Europe keep the heating on this winter?

Without Russian supplies there is simply not enough gas in the world, analysts say. The key to Europe getting through the winter will be the weather.

'There's not enough gas in the world': Can Europe keep the heating on this winter?

Europe is likely to scrape through this winter without cutting off gas customers despite reduced Russian supplies, but even adjusting to colder homes and paying more may not be enough in coming years, analysts say.

“I like a hot house, I have to admit… I really used a lot of gas,” said Sofie de Rous, who until this year kept her home on the Belgian coast at a toasty 21 degrees Celsius (70 degrees Fahrenheit).

But like millions of other Europeans, the 41-year-old employee at an architectural firm has had to turn down the thermostat after energy prices surged following Russia’s invasion of Ukraine in February.

Russia’s progressive reduction of gas supplies to Europe via pipeline triggered a bidding war for liquefied natural gas (LNG), sending prices sharply higher.

If certain countries like France and Spain froze prices for consumers, others like Belgium let suppliers more or less pass along the higher costs.

“I was a little panicked in the beginning,” said de Rous, who saw the gas bill to heat her 90-square-metre (970-square-foot) house in Oostduinkerke jump from 120 euros ($126) per month to 330 euros.

She has lowered her thermostat to 18 degrees and is looking into installing double-pane windows and a solar panel.

Like de Rous, the lack of concern about energy consumption of a whole generation of Europeans ended abruptly in 2022, and everyone is mindful of where their thermostat is set.

If previously natural gas was cheap and plentiful, it is now scarce and expensive.

The European wholesale reference price used to fluctuate little, hovering around €20 per megawatt hour. This year, it shot as high as €300 before dropping back to around €100.

“It’s the most chaotic time I’ve witnessed in all of those years,” Graham Freedman, a European gas analyst at energy consultancy Wood Mackenzie, told AFP.

Big drops in consumption

Sky-high energy prices have caused numerous factories, particularly in Germany’s chemicals sector which was highly dependent upon cheap Russian gas, to halt operations.

But European nations were able to fill their gas reservoirs and no one has been cut off yet.

“Until February, the very idea of Europe without Russian energy was seen as impossible,” said Simone Tagliapietra, a senior fellow at the Bruegel think tank in Brussels.

“What was impossible became possible.”

A warm autumn that allowed many consumers to put off turning on their heating also helped put Europe in a better position for the winter.

But Europeans have also made dramatic cuts, with the EU using 20 percent less gas between August and November compared with the average gas consumption for the same months in 2017-2021, according to Eurostat.

In Germany, where half the households use gas for heat, data shows consumption down by 20 to 35 percent depending on the week.

“That’s much more than anyone expected,” said Lion Hirth, a professor of energy policy at the Hertie School in Berlin.

“And that’s completely contradictory to the talk that we’ve been hearing from doomsday talkers saying people just don’t respond.”

Energy bills are likely to remain high, and experts say a cap on gas prices agreed by the EU in December will only have a limited impact on bringing them down.

In the space of several months Russia has lost its top gas customer, Europe, with purchases passing from 191 billion cubic metres in 2019 to 90 billion this year.

Wood Mackenzie forecasts deliveries will fall to 38 billion cubic metres next year.

The EU has been able to import large quantities of LNG, but only by outbidding South Asian nations like Pakistan and India.

This has pushed these nations to increase their dependence on coal — negatively impacting global efforts to curb climate change.

In 2023?

Europe’s ability to import LNG has been limited by a lack of infrastructure. Port terminals capable of transforming the liquid in tankers back into gas and reinjecting it into pipelines are needed.

The continent’s top economy, Germany, scrambled to inaugurate its first facility in December, while plans for 26 new terminals have been announced across Europe, according to Global Energy Monitor.

And while the construction of more LNG terminals is underway, in 2023, unlike at the beginning of this year, Europe will mostly have to do without Russian gas to fill its reservoirs.

This could set up an even fiercer bidding war between European and Asian nations for supplies.

An EU gas price cap of 180 euros per megawatt hour that is scheduled to go into effect in February will likely have little impact in this case as it will not go into force if LNG prices are also high.

“The key factor is most certainly going to be: what is the weather going to be like this winter,” said Laura Page, a gas analyst at commodity data firm Kpler.

“If we have a cold winter in Asia, and we have a cold winter in Europe… this fight will intensify.”

The problem is that LNG supplies are limited.

“There isn’t enough gas in the world at the moment to actually cope with that loss of supply from Russia,” said Wood Mackenzie’s Freedman.

New LNG projects to boost supply won’t be able to come online before 2025, meaning Europeans will have to get used to living with homes heated to just 18 degrees.