[ad_1]
NVE is proposing new rules that would reduce the burden on district heating companies, while still protecting customers from high prices.
The Norwegian Directorate for Water Resources and Energy (NVE) informed E24 of the situation.
NVE has proposed a new price model. The aim is to continue to protect district heating customers from sky-high prices, but NVE will also take into account the challenges facing district heating companies.
District heating prices are linked to electricity prices. They still will be, but NVE will introduce new part prices.
– We believe that there should still be a maximum price regulation. We recommend that the district heating price should not be higher than the electricity price plus a constant element of 50 ohms per kilowatt-hour, said Kjetil Lund, CEO of NVE.
He noted that this constant term is roughly equivalent to today’s internet rental and electricity bills.
– This applies even if electricity prices become very low and tend towards zero or negative figures. He said the new regulations would protect district heating companies from low or negative electricity prices to a greater extent than now, when they risk having to supply at a loss.
It may cost the customer
Furthermore, NVE proposes to remove electricity subsidies from the calculation of the maximum electricity price and instead protect district heating customers from high electricity prices directly in the regulations.
– We suggest that shielding comes into effect when the spot price is 100 øre per kilowatt-hour. This means that the shielding starts at 20-30 øre higher than it is now, he said.
– In case of high electricity prices, the shielding for customers will be slightly weaker than it is now. For a household this could mean a few hundred SEK per year, depending on how electricity prices develop. But we believe that this system provides more stability for the industry and customers,” says Lund.
The system must function so that when the spot price is above €100 per kWh, the district heating maximum price only increases by 40% of the increase in the spot price. In the case of negative spot prices, the maximum price decreases by 40% of the spot price.
– Will reduce the load
The state provides electricity support to electricity customers, while district heating companies provide corresponding support to their customers.
– Lund said the new proposal would reduce the company’s financial burden.
– In addition, business customers now also had protection against high prices. Now they don’t, he said.
NVE will now forward the proposal to the Department of Energy, which will decide what happens next.
– Lund said the final outcome would be decided by the government and parliament.
Received a sky-high bill
In the autumn of 2021, district heating customers complained that Suffering a severe cost blowThe reason is that district heating prices Linked to electricity priceshas exploded.
– When electricity prices were very high from 2021 and electricity subsidies were introduced, district heating customers were not included for a few weeks. Prices were very high then and there were a lot of riots. Action was taken quickly, Lund said.
The answer is to impose obligations on district heating companies A form of power supportA form of power supportSpecifically, electricity subsidies are included in the calculation basis of the maximum electricity price for centralized heating.. But this brings some new challenges.
– which might be good for customers, but a burden on the profitability and business model of the company. “Now I think we have found a solution that will provide companies with more predictable and more stable framework conditions so that they can invest further in their business,” Lund said.
– Must be blocked
Lund believes this is not an area where one can expect a definitive correct answer.
– Companies need reasonable framework conditions and must protect customers from high prices. “We hope and believe that we have found a good balance,” he said.
– Is district heating still linked to electricity prices?
– Yes. We considered other solutions, but after overall evaluation, we believe that there are great advantages to still anchoring the electricity price, but shielding slightly differently when the electricity price is high or low.
Regulations since 1986
The head of NVE pointed out that district heating has a monopoly element and therefore must be regulated.
– Today’s regulation dates from 1986, when the energy system was very different. We took the time to look at it carefully and assess whether it could be made more up-to-date, Lund said.
– We believe that simplicity of regulation is important for customers, companies and politicians who make decisions. He said the current regulations are that district heating prices cannot be higher than electricity prices and there is a calculation formula that includes network rent and electricity support.
[ad_2]
Source link
