HomeTechnologyDagens Strømpriser: 8 Factors that Affect Electricity Prices in Norway

Dagens Strømpriser: 8 Factors that Affect Electricity Prices in Norway

Most people in Norway and many other parts of the world use grid-power-supplied electricity. As a result, subjects revolving around grid power-supplied electricity are usually of interest to these people.

One such subject is the factors that determine the cost of grid power supply in the country. This is especially given how strømpriser i dag which is the Norwegian translation for “current electricity prices”, may change. Knowledge of subjects like this ensures that people are not in the dark and that cost-saving decisions can be made, wherever possible and necessary.

To this end, this article discusses a couple of factors that affect the cost of power supply and even generation in Norway. So, read on to stay informed.

What Determines Current Electricity Prices in Norway?

The type of plan opted for, generation rate, market demand, transmission costs, cost implications of influencing regulations & policies, fuel price, weather conditions, infrastructural investments, exchange rates, and storage capacity are some of the factors that determine current electricity prices in this Scandinavian nation.

Consumers have control over a few of these factors. As a result, they can influence the amount that they pay. On the contrary, some of these factors are beyond their control and consumers just have to deal with them regardless. In the spirit of understanding these factors and how much consumers can do to reduce electricity costs, some of the factors in question include the following:

Type of Plan Opted for

Speaking of factors that consumers have control over, this is indeed one such. There are several kinds of electricity plans and they include the following:

Variable Rate

This one is such that its rate is not static, as its name suggests. The rate varies based on several factors, including the ones that will be further discussed in this article.

As a result, consumers who opt for this kind of plan need to plan for price volatility. For example, spikes in fuel prices and power demand would lead to an increase in electricity prices.

Furthermore, the variable rate plan can take a few forms. TOU (Time-of-Use) plan is an example. It is such that the cost of consumption is determined by the period of the day and night when it is consumed.

In other words, consumption during certain periods is more expensive than consumption during other periods. In the same vein, consumption during certain periods is cheaper than consumption during other periods.

For such plans, the trick for reducing electricity cost is firstly the knowledge of when consumption is cheap, as well as expensive. Afterward, you can act in light of this information by maximizing electricity during cheap periods and reducing consumption during expensive periods.

Fixed Rate

This option saves consumers the stress of dealing with the volatility that the above-discussed variable rate plans are known for. The reason is that consumers pay a fixed amount for every unit of power consumed. This is regardless of the rise or drop in prices for those who use variable rate plans.

Green Energy

Fixed and variable rates are the two major plans. However, you should know that some people use either fixed or variable plans with unconventional grid-supplied green energy programs.

You see, most of Norway’s electricity is generated through hydropower, which is green (renewable) energy. However, there are other options, with wind being one of them.

It turns out that grid power-supplied electricity from green energy sources (besides hydropower) is usually more expensive. However, some people are connected to grids that supply power from such sources. These consumers are more likely to pay more for consumption.

Power Generation Rate

Most of Norway’s electricity is generated using hydropower plants. To provide a better perspective, about 9 out of every 10 Norwegian residents depend on power generated from such sources.

As a result, the amount of power generated in these facilities is a major determinant of how much electricity costs. By and large, it is likely to be cheaper when so much is generated. On the contrary, it is likely to be expensive when there is a shortage.

Market Dynamics

Perhaps you remember that part of this article that stressed how many of these cost-influencing factors are interwoven. This one is a clear example, especially in relation to the above-discussed point.

The law of demand and supply determines how much electricity will cost consumers. The above-discussed point (power generation) was about the supply side of things, while this part is about the demand side of things.

The number of people who need to consume electricity determines how much it will cost. This is especially true when the demand exceeds supply (power generation).

Furthermore, competition among suppliers is another market dynamic that affects its cost. The more competitive it is among suppliers, the more likely it is that electricity costs will be reduced. In the same vein, less intense competition or a monopoly would not likely favor consumers.

Weather Conditions and Demands

This point is quite ironic because it affects both in terms of power generation and consumption. Speaking of how it affects power generation, increased rainfall, and snow-melting provide the necessities for increased power generation at hydropower plants.

This is because water is integral for power generation at these facilities. So, this is how certain weather conditions boost power generation and otherwise.

Speaking of consumption, there is a significantly reduced need for power during certain periods. This is because of weather and climatic conditions at the time. Specifically, summer is high on the list of such seasons as heating needs are significantly reduced.

This is very important considering how indoor and water heating accounts for most of the consumed electricity in most Norwegian households. You can check here for a graphic representation of how electricity is consumed, especially in Norwegian households.

Regulations & Policies

Pertinent regulations and policies affect how much consumers pay for consumed electricity. For example, there are taxes imposed on power generators, suppliers, and even consumers. The sum of all these taxes ultimately affects how much consumers pay.

Besides taxes, there are other ways that regulatory processes and decisions affect electricity costs. For example, there may be imposed caps on how much suppliers can charge consumers. By the way, such caps are usually on a percentage basis and are meant to act as a price control check.

Another example would be environmental policies as there are increasing amounts of stringent environmental laws. As a result, power-generating options that are hinged on using non-renewable sources are gradually becoming obsolete. So, the increasing insistence on using renewable energy sources also affects the cost of consuming electricity.

Transmission Cost

Of course, there are huge expenses involved in generating power from various sources, especially hydropower which is mostly used. However, these are not the only expenses involved.

There are also transmission expenses. This is the sum of what it costs to move generated power from the generating plant to the final consumer. Besides the generating cost, transmission costs also affect how much consumers pay for consumed electricity.

For example, some infrastructures may have to be installed, maintained, or upgraded to ensure the seamless transmission of generated power. All of these things are influencing factors.

International Factors

Norway does not operate its energy sector in isolation. The structure is such that this Norwegian country can supply neighboring countries in periods of excess. In the same vein, it can be supplied during periods of shortage.

In light of this, it is worth noting that international factors equally affect the cost of electricity in Norway. Current exchange rates and pertinent international policies are prime examples of how this can happen. This is especially during periods when power generated from neighboring countries is used by Norwegian residents.

Storage Capacity

Modern hydropower plants are usually equipped with infrastructures that enable the storage of excess generated power. This ensures that the most is made of periods of excess power generation. This is also about having something to fall back on during periods of shortage.

To this end, the storage capacity of hydropower plants and every other power-generating source are crucial. This is how the storage capacity of power generating stations also determines the cost of electricity.


By and large, there are myriad factors affecting the cost of electricity in Norway. Consumers can influence some while some will just have to play out their way. As a result, understanding how current electricity prices are determined ensures that consumers do what they can to reduce power consumption costs, as much as they can.

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