The aim is to even out electricity consumption over the course of the day, so that consumption peaks are lower and we can make better use of the electricity grid. In this way, we save money and the environment, and keep the grid rent as low as possible for you as a consumer. We should therefore avoid washing clothes, cooking dinner and charging an electric car at the same time.

Justification / background for change:

• The biggest challenge for climate action, electrification and the establishment of new industry in Norway is gaining access to sufficient capacity in the electricity grid. By making better use of the existing grid before we build new power lines, we can keep the grid rent as low as possible for you as a consumer.
• The electricity grid must be dimensioned for the one hour of the year when we use the most electricity. If we manage to even out consumption over several hours of the day, we can save major investments in the grid. It can be compared to road construction. It’s silly to build a four-lane highway to deal with a few hours of congestion in the morning, if we can distribute the traffic over larger parts of the day. We need to think the same way about the electricity grid when society as a whole is going to use more and more electricity.
• The electricity grid is paid for in full by users through the large splice called grid rent. Just by charging electric cars smarter,  we can save NOK 11 billion in investments, according to NVE.
• The new grid tariff gives you greater opportunity to influence what you pay – both now and in the future. It will be worthwhile to even out consumption throughout the day, and it will be cheaper to charge your electric car safely at night. But we don’t recommend anyone to use a washing machine etc. when they sleep.

 

Questions and answers:

How does the new pricing model for grid rent work?

Previously, it was only the number of kilowatt hours that affected your grid rent. Now you’ll have a greater opportunity to influence your bill. From 2022, the grid rent for household customers will consist of two parts:

• Capacity link – an amount per month based on how much electricity you use at the same time
• The energy charge – an amount per kilowatt hour, depending on the time of day you use the electricity

The capacity link is determined by your 3 highest daily peaks* within a calendar month. If you even out your electricity consumption over the course of the day, you will have a lower capacity link than if you use a lot of electricity at once. For example, it’s worth not washing clothes, cooking dinner and charging an electric car at the same time. It’s a good idea to charge your electric car with a home charger at night.

The energy charge is determined by how much electricity you use in total (number of kilowatt hours) and when you use the electricity. You pay less per kilowatt hour at night than during the day. Some companies will also have lower energy tariffs at weekends and during the summer months, when the electricity grid is less loaded.

* Daily peak is the hour with the highest consumption within a 24-hour period. The average of the 3 days with the highest consumption determines the capacity link.

Who will get higher, unchanged and lower grid rent than today?

The electricity grid is a major splice that is paid for in its entirety by users through the grid rent. In general, those with small homes and low simultaneous consumption will pay a smaller share than today, while those with larger homes and one or more electric cars will pay a larger share. However, these people still have good opportunities to adapt their consumption and thus reduce their grid rent – if they make a small personal effort.

Will my grid rent go down from 2022?

It is the authorities that determine the revenue for each grid company. In some regions, grid tariffs will increase in 2022, regardless of the new pricing model. This is due to increased costs for operation and investments in the grid. But everyone will still have a greater opportunity to influence their grid rent. The grid companies will inform their customers about how the new pricing model will affect them.

What does the new pricing model mean for different customer groups?

Apartments: Most customers will have a more or less unchanged grid rent because their electricity consumption is generally relatively even and low. Customers in this category will normally end up in the most affordable capacity step.

Single-family homes: Will be distributed over several capacity steps and costs can go both up and down compared to today. They can influence the grid rent by smoothing out their consumption so that they end up at a low level. Electric car owners can save money by charging with an approved home charger at night. This will normally make both the electricity price and the grid rent cheaper. With large simultaneous consumption, it will be more expensive than today.

Homes with solar cells: The use of self-generated electricity will result in slightly lower savings because the energy component in the grid rent is reduced, but there will still be a lot to save on electricity prices and taxes. For these homes, it is also important to even out consumption, especially during the hours when they do not have their own electricity production.

Retrofitting insulation, heat pump, etc: Energy efficiency measures will result in slightly smaller savings, because the energy component in the grid rent is reduced. But there will still be a lot to save on electricity prices and taxes.

Cabin owners: For owners of average cabins, the calculations are similar to those for owners of detached houses. Here, too, the advice is to even out electricity consumption throughout the day. If you’re bringing your electric car to a cold cabin, it may be a good idea to wait to charge your electric car until the cabin has warmed up.

Businesses with annual consumption below 100,000 kWh: No significant change for these, but customers with high electricity consumption in single hours should consider adjustments.

How much will it be possible to save by using electricity smarter?

The price of the different capacity levels will vary between the grid companies, but several suggest that there will be around NOK 1,500 to be saved annually by adapting consumption to a lower capacity level. A number of companies also offer half the price of the energy charge per kilowatt hour at night compared with during the day. In other words, if you move the charging of your electric car to night time with a safe home charger, there will be money to be saved.

What proportion of people have a real opportunity to influence their electricity bill?

Those who use the most electricity will be able to influence their grid rent the most – not least anyone with an electric car and their own home charger. It shouldn’t be expensive or difficult to use electricity more intelligently. There are already simple solutions for automatically charging electric cars when prices are most favorable. The same applies to heating.

How can we be sure that the new grid tariff will lead to smoother electricity consumption?

Several grid companies have conducted pilot projects and surveys. Three out of four people in the largest pilot felt that they were able to adjust their electricity consumption. Push notifications about periods of higher prices resulted in up to a 7.5 percent reduction in electricity consumption, which is a good effect. Experience so far shows that customers want tips and alerts on how to use electricity more intelligently.

How can I keep track of how much power I’m using at the same time?

By logging in to “my page” at the grid company, you can see how much electricity you have used per hour back in time. If you want to keep track in real time, you can use simple equipment to connect to the HAN port on your electricity meter. At the same time, you need to ask the grid company to give you access to data from the meter. The meter can communicate with automatic control systems for energy use in the home.

Why did you choose to introduce this at a time of very high electricity prices?

The introduction of a new grid tariff has been discussed and planned for several years, with various proposals from the authorities going through two rounds of consultation. The Ministry of Petroleum and Energy took the final  the decision to introduce the scheme, with the support of the grid industry. “We can see that there may be a lot for customers to deal with now – the positive thing is that they will have a greater opportunity to influence their grid rent.

How much grid investment is it realistic to save on smarter electricity use?

By making better use of the existing electricity grid before building new power lines, grid companies can save a lot of money and thus keep the grid rent as low as possible for you as a consumer. Just by moving the charging of electric cars to the night, we can save NOK 11 billion in grid investments, according to  calculations from the Norwegian Water Resources and Energy Directorate (NVE).

What about the fire risk if people start washing clothes at night?

Shifting consumption should not compromise comfort or safety in the home. For example, we don’t recommend anyone to use the washing machine, dryer or dishwasher while sleeping. There’s not much to save on this either. On the other hand, you can safely charge your electric car at night if you have installed your own home charger.

What does the new model mean for the grid companies’ revenues?

The grid companies’ total revenues are determined by the authorities through annual revenue caps, and will not be affected by the new pricing model. Operation, maintenance and development of the electricity grid in Norway costs around NOK 27 billion annually. This bill is covered in its entirety by the users of the grid. By making smarter use of the capacity in the grid, we can keep the grid rent as low as possible for electricity customers over time.