Technical Weekly Magazine (TU.no): “Dumb homes will experience monumental electricity bills”
Updated: Jul 19
The Norwegian government has decided to implement a new pricing model for grid access, introducing load based pricing. The intention is to motivate reduced power consumption at peak hours, by introducing a penal element for excessive consumption. This is not something completely new - households had similar penal pricing elements until the 70s, with a small power meter, typically in the kitchen, with a red needle indicating what level not to exceed. If so happened, kids were sent around the home to switch of ovens and boilers.
Even today, there are municipalities with such a pricing model, Hvaler being one of them. In 2014, a new pricing model for power consumption was tested, alongside the distribution of an earlier version of the Ewave system. Aided by this display, the test participants managed a reduction in energy consumption of 25% (Source:https://www.tu.no/artikler/slik-blir-de-nye-nettleieprisene-br/432271).
For owners of “dumb” homes, running around switching ovens, car chargers and heaters on and off to avoid massive energy bills would be very impractical to say the least. Until now, focus has been on shifting consumption to off-peak hours to reduce the energy part of the bill. After 2021, the consumer has to take variable grid rent into account as well. Today, the consumers pay approximately the same amount for the grid rental as they dop for the energy delivered. From next year onwards, owners of “dumb” homes most likely will experience electricity bills where the grid access is many times larger than the energy cost. This is to cause behavioural change with the consumer – only a massive penalty element will provide for such a change.
The message is clear: For consumers with large electricity bills, energy management systems have to be installed in order to avoid price shock in the thousands of Euro per year magnitude. In Norway, these owners primarily live in single family homes, duplexes and town houses, typically build decades ago. This adds up to more than 1.8 million homes, or 3/4 of the total number of homes. One of the challenges for such a transition from dumb to smart homes is that many of the homeowners are mature people, frequently needing both a user-friendly solution and assistance in specifying and installing the energy management system. The younger, typically more tech-savvy part of the population normally lives in apartments, less exposed to the new pricing model. With the change only months away, we are guaranteed to see horror stories of elderly widows receiving bills they cannot possibly pay, forcing them to turn off the heat in the middle of the winter (In Norway, electricity is by far the most common energy source for heating in private homes).
The solution is obviously to make the home smart as soon as possible. Most important is to take control with heating, hot water and car chargers (more than 50% of cars sold in Norway are EV´s), consuming more than 75% of the electricity in a normal home. The incentive to install an energy management system, already being profitable due to variable energy prices and the possibility to reduce unnecessary consumption, will be much stronger when the new grid prices are introduced.