NVE Proposes New Price Regulation For District Heating

On June 20, 2024 the Norwegian Water Resources and Energy Directorate (NVE) introduced a pro-posal for new price regulation in the district heating sector, following extensive work on the issue since November 2021. The proposal suggests maintaining a maximum price regulation but with sig-nificant modifications, positioning NVE as an active price regulator.

Currently, district heating prices are governed by § 5-5 of the Energy Act, which stipulates that the price cannot exceed the cost of electricity, including taxes such as the electricity tax and grid rent. Historically, NVE calculated the maximum price based on a monthly average of the electricity spot price and the applicable network tariff for the customer. However, changes in the regulation of network tariffs in June 2021 rendered NVE's calculation method obsolete, prompting a comprehensive review of the price regulation framework. In the interim, NVE has reverted to using data and methods from 2019.