Arne O. Holm says Power Crisis: Resembles A Burglar Trying to Erase His Trail

The price on electricity increases because our politicians have decided that they should.

Commentary: A unified Storting [parliament] runs head over heels to save the economy of hungry and frozen electricity customers. This is a political rescue mission resembling a burglar trying to erase his trail.

By all means, there may be good reasons for helping those of us who struggle to make ends meet when the electricity bill takes an increasing share of the paycheck, and the state as well as municipalities see money pouring in due to the very same high price on electricity.

Political emergency assistance

That is the construction of the Norwegian welfare state. Around us in Europe, electricity prices are far higher than in Norway without that triggering any kind of political mobilization of “emergency assistance” as seen here, in our country.

However, it is easy to forget that the so-called electricity crisis by and large was created by the very same politicians who now believe themselves capable of solving the economic problems it is creating for some Norwegian households. Not because we participate in an international power market, like the debate might indicate.

The price on electricity increases primarily because we, through political decisions, are about to enter into the Green Shift. The fact that this has consequences should not surprise anyone.

Least of all a unified Storting.

Coal plants and nuclear plants all over Europe are shutting down. They are shut down because there is political agreement that the globe that we all live on cannot take emissions from coal plants and because there are not good enough solutions for nuclear power waste.

Coal plants and nuclear plants all over Europe are shutting down

This shutting down leads to an absence of large amounts of electricity that have to be provided by purer energy.

A wanted policy

Norway The Gas Producer warms all of Europe. We ourselves do not use this gas, as it messes with our climate balance. Instead, we export vast amounts of gas and add an ever-increasing CO2 tax to it in order to save the climate.

The tax increases the price on gas and shifts consumption to pure energy where possible.

As a nation, we take the lead in subsidizing electric cars, however, subsidizing the electric car park means that the consumption of electricity increases significantly.

We have also decided to electrify the Norwegian shelf. Instead of using the gas produced here, we construct huge cables to transport pure energy out to the production platforms. We are once again talking about a rather significant increase in energy consumption.

The sum of these political decisions, decisions made because they are considered climate friendly, lead to a powerful surge in the demand for a commodity that only exist in a limited amount. Without precipitation and wind the politically decided deficit in the power market accumulates and prices rise, just like prices rise for any product for which demand is higher than supply.

Like the Corona pandemic

Thus, what is surprising is not that the price on electricity rises. What is surprising, is that this comes as a surprise to those who have decided that we should shift our consumption away from fossil fuels to pure energy.

The way the political debate about emergency assistance to hungry, frozen and broke Norwegians is running right now it would appear that the high electricity prices came as sudden and unexpected as the Corona pandemic.

What is surprising, is that this comes as a surprise to those who have decided

That is remarkable, as the power market is acting in full accordance with political decisions made previously.

That very same recipe will increase electricity prices permanently in the next couple of years. Because when we laud a major-scale development of battery factories, when tens and tens of hydrogen power plants are produced, the demand for pure energy will increase – and with that, prices.

And then the state is, of course, free to use the enormous public revenues stemming from increased prices on electricity at its own discretion. That is also a part of the Norwegian welfare state.

In a market with permanently higher electricity prices than those to which we are used, handing out checks to the entire Norwegian population is not necessarily a good move. That would just be a band-aid on a bleeding wound also for those who do not bleed.

Increased income should instead be used where it will have a social effect – in taxation.

Over time, emergency assistance will only be suited to cover the trail of political decisions made by a well-meaning yet apparently ignorant political majority.

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This commentary was originally published in Norwegian and has been translated by HNN's Elisabeth Bergquist.