As a rule, most regions of the world base your electricity company on where you live. Norway’s electricity system is intricate and confusing. Residents need to understand the ins and outs of not only spot pricing but the subcategories that fall under that.
This includes finding the bestestrøm – timespot, or what I assume is the time to use electricity for the best price. While it’s challenging to understand the Norwegian electricity system, we’ll try to explain what we have been able to decipher.
A primary consideration is not to be duped by unsavory providers at a time when energy costs are fluctuating from their highest and starting to reduce.
Prices can change as rapidly as every hour, with Norwegian households having meters that measure the occupant’s consumption constantly, with the data transferred wirelessly to the electric company.
The cost is decided the day before, considering demand estimates and the amount of electricity companies believe will be generated through the course of the day.
What Is Spot Price
A term that Norwegians are familiar with relating to electricity is “spot price,” with subcategories that fall under this, including timespot, which further narrows how a customer is billed for their service based, from what I can tell, on when service is used. Learn about Norway’s electricity bills at https://lifeinnorway.net/electricity-bills-in-norway.
Spot price is the amount an electricity supplier pays for the commodity. This cost is set on Nord Pool hour by hour based on supply and demand. It’s the basis the supplier uses to decide how much it will sell the electricity for to the consumer on the grid.
Electricity costs aren’t solely based on the spot price. Other variables contribute, including the energy tax and power distribution/transmission network charges. Sweden has a shared market with neighboring countries, including Norway, to decide prices on Nord Pool.
This is the electricity exchange where most of Sweden’s electricity trade operates. The price set here is designated as the spot price. This price is influenced by a range of variables like the reservoir levels, the wind strength, the temperature, again, supply and demand, the region you live in, and on.
How does spot price affect you as the customer? Primarily, it has more of an impact on those who choose a variable contract. The higher the supplier pays for electricity, the greater your rate. Variable contracts follow the spot price; as it rises and falls, so do your costs.
For those with a fixed price agreement, the rate is locked and won’t change regardless of how the spot price fluctuates.
The charges due consist of the charges paid to the supplier, the transmission fee from the grid, and local and state fees and taxes.
What Is Time-Of-Use Electricity Pricing
While Norway depends primarily on renewable resources, electricity is also generated, with the system being somewhat complex for the average person to understand.
Consumers can buy electricity in a few ways, either by following the spot price, which would mean fluctuations in their rates as the spot price rises and falls, or in a fixed agreement where the rate won’t change despite fluctuations in the market. There are also time-of-use rates.
Utility carriers prefer that customers curb their usage at peak times to reduce the demand, so the providers have a sufficient supply. Each kWh needed during heavy usage hours costs the provider and consumer considerably. In trying to explain the added costs, it looks like this:
A utility has a baseline of electricity that they expect for always servicing their clientele, which is cost-efficient because the power plants run at high efficiency and do so at all times. Energy use fluctuates, however, so the baseline is not a constant.
The temperature fluctuates, weather conditions change, and other variables. The utility carriers account for these changes weekly and daily. They will pay extra compared to the designated baseline since often that means more power plants will need to be started up, creating greater costs.
In peak times, utilities must buy added energy in shorter increments like “5 minutes, 15 minutes, or an hour ahead.” These equate to the costliest electricity.
If the rate structure is one where a flat fee is paid for energy, the provider sees less profit when there’s high usage at the peak times. That’s due to the average prices increase per kWh but the revenue staying true to the flat rate. This is why utilities developed Time-of-Use plans.
How Can a Time-Of-Use Electricity Plan Help Reduce Your Energy Costs
Many homeowners are starting to look at peak electricity usage times during the day as a consideration for energy savings instead of following the spot price or locking in at a fixed rate. This involves figuring out the times when electricity is most and least used and aligning your consumption with those timeframes.
That doesn’t mean you’ll use less energy; you’ll merely be shifting the time of day you perform specific activities in the home. However, cutting your usage to save even more is always a good idea.
The objective of a time-of-use plan is to limit energy usage during peak times to take advantage of the lower rates offered in the off-peak hours. Simple adjustments in your schedule will reflect on your utility bill. Here are some tips that will help reduce consumption and lower energy costs.
A smart thermostat
The HVAC system generates the highest energy costs in the household with the greatest electricity consumption. Investing in a smart thermostat is suggested to help reduce this usage.
The thermostat allows a homeowner to program the device to operate the HVAC during off-peak hours, making the cooling and heating costs more manageable.
When you reach out to your utility carrier, the provider will offer suggestions on temperature settings for the home in extreme temperatures to create even more savings.
When not home in the summer, the temp should remain at roughly 78 degrees and be programmed to drop to 75 degrees when you return home for the greatest comfortability. You can add to air circulation when you install ceiling fans in the space to prevent the HVAC system from running constantly.
The large appliances
Dishwashers, washers/dryers, and stoves consume massive amounts of energy, particularly if the machines are old and inefficient. Utility providers always recommend that homeowners upgrade to modern models for the greatest efficiency and the most savings.
Regardless of your appliances’ age, savings are still possible if you use them on off-peak times when rates are at their lowest. The dishes don’t need to be washed as soon as dinner is finished. You can wait to turn the dishwasher on before heading off to bed.
Laundry doesn’t need to be done after work. You can toss in a load early in the morning before anyone even considers opening their eyes for the day. Instead of drying clothes, especially in the summer, you can create a clothesline outside. You can even build a drying rack for the inside and eliminate using the dryer.
When you adjust dishwasher and washer usage, the added advantage is that the hot water system can replenish in the off hours, further reducing costs.
Don’t forget to unplug
When devices are turned off, that doesn’t mean they are no longer generating power. Usually, electronics like laptops, desktops, charging devices, game stations, and things like these will still use energy.
When you take the time to unplug these or have them plugged into a power strip that you can turn off, you can save considerably. In that same vein, turn off the lights when you leave a room or home for the day or evening. Taking these measures can reduce your utility costs considerably.
While you won’t necessarily have a choice of whether you can use your electronic devices on off-peak hours, especially if you work from home, maybe you can consider when you charge the devices; fully charge them at night so they work without fail throughout the day and evening without a need to plug in.
If you work from home, try to avoid having the TV on while working. This will help you focus more on your tasks plus reduce your energy consumption.
Electric vehicles charging
Electric vehicle charging is comparable to large appliances in that car owners should wait until off-peak hours when the rates are at their lowest to plug the vehicles in.
These autos have tremendous battery packs, consuming incredible amounts of energy for charging. Shifting the timeframe for charging can result in massive savings.
With this conservation method, there’s not necessarily a specific time period to wait; some electric vehicles come with “intelligent charging,” allowing car owners to program the battery to be charged on the off-peak times for the lowest rates.
Not all vehicles have this feature, but you can incorporate a smart charger to achieve comparable results. These automatically shut off once the peak hours begin.
Final Thought
Norway’s electricity system is complex, making it difficult for the average person to understand precisely how it all works. A primary term to become familiar with is spot price and all that it involves, along with the subcategories like timespot that fall under spot price.
The spot price is what the electricity supplier pays for the energy they then supply to the consumer. You can either agree to plans that follow a spot price rate program where your rates will fluctuate as the market does or consider fixed rates.
With these, you will lock in at a preferred rate that won’t change regardless of how the market rises or falls. You can also opt for a time-of-use plan encouraging property owners to consume the most energy during off-peak hours for reduced rates. Go here to learn to save on energy costs.
Whichever you choose, the objective is to learn how the electricity system works in Norway, how energy is consumed, and how you can do so efficiently with the most reduction in rates.
