Business network tariffs in Norway: what are demand charges?

A demand charge is the part of a network bill calculated from the power a business draws over defined measurement periods. You can influence it by reducing the demand used for billing. Start with your tariff and meter data: using fewer kilowatt-hours does not necessarily lower the demand charge.

How do electricity prices and network charges differ?

Your electricity supplier charges for the energy you buy. Your network company charges for transporting it through the grid. These charges may appear on one invoice, but follow different agreements. A favourable spot price alone does not tell you the full cost of electricity for the business.

Use the bill as a starting point: identify the metering point, tariff name, billing period and unit on each line. The distinction between NOK/kWh and NOK/kW matters when assessing a battery or load control. This guide concerns Norwegian business tariffs.

How to read the main charges. Names and presentation vary between agreements.

Invoice item	What to check
Electricity and supplier markup, NOK/kWh	Which supply contract applies, and does the cost change with the time of use?
Network energy charge, øre/kWh	Which rate applies in each period, and how many kWh were billed?
Fixed charge or capacity band, NOK/period	Is this fixed for the tariff, or does it depend on a band calculated from demand?
Demand charge, NOK/kW per period	What demand was billed, which rate was applied, and how was the demand calculated?
Taxes and other items	Which additional charges apply, and are amounts shown with or without VAT?

Elvia: Demand tariffs for businesses above 100,000 kWh (Norwegian)

Does every business pay a demand charge?

No. Norwegian regulator RME explains that businesses consuming more than 100,000 kWh annually may have a demand charge in addition to fixed and energy charges. A fixed charge based on capacity bands is also different from a separate demand charge.

Ask the network company to confirm the tariff for each metering point. Do not assume that the calculation on a household bill or at another site applies to your business.

RME: Network tariffs for consumption (Norwegian)

What do kW and kWh mean on the bill?

Kilowatts, kW, measure power: the rate of energy use. Kilowatt-hours, kWh, measure energy over time. A 100 kW load running for two hours uses 200 kWh. Two such loads running together draw 200 kW; running them consecutively uses the same energy but reduces simultaneous demand.

This means you may be able to reduce a demand peak without reducing production or total energy consumption. Whether it lowers the bill depends on the tariff and whether the consumption can actually be rescheduled.

Is the tallest spike on the chart the demand you pay for?

Not necessarily. Elvia’s demand tariff for hourly metered business sites uses the highest demand in each calendar month and has different summer and winter rates. Other tariffs must be checked individually. Verify both the measurement interval and which readings are selected.

Consider an illustrative example: a site draws 300 kW for ten minutes and 100 kW for the following fifty minutes. Energy consumed during the hour is 300 × 10/60 + 100 × 50/60 = 133.3 kWh. Average demand over that hour is therefore 133.3 kW, even though the chart contains a 300 kW spike.

If the tariff uses hourly averages, calculating savings from the spike alone would be wrong. If it uses a different interval, the analysis must use that interval. These figures explain measurement; they do not represent an actual bill.

Elvia: Demand tariffs for businesses above 100,000 kWh (Norwegian)

How do you calculate a potential reduction in demand charges?

For a simple demand charge, multiply the reduction in billed kW by the applicable NOK/kW rate for the period. The example below uses an invented rate of NOK 50/kW per month, excluding VAT. It is neither a quotation nor a current network tariff.

Illustration: the demand charge for one month, excluding all other invoice items.

Calculation	Amount
Before: 180 kW × NOK 50/kW	NOK 9,000
After: 160 kW × NOK 50/kW	NOK 8,000
Reduction in the demand charge	NOK 1,000

Check that 160 kW is the new billing basis for the whole period. Another peak could otherwise take its place.
Deduct any additional charging, energy loss, operating and equipment costs when assessing the overall economics.
Calculate each month using its rate and consumption profile. Do not multiply a favourable month by twelve without examining the rest of the year.

What can you do before buying a battery?

Start with the days that determine your network bill. Identify which machines, chargers or heating systems ran together and whether their timing was essential. Changing a start sequence or charging schedule may be simpler than adding storage capacity.

When consumption cannot be moved, a battery can be assessed as a local source of power during peaks. Its power, discharge duration and recharging time must match the need. Cheap electricity at night is less useful if rapid battery charging creates a new, costly demand peak.

Identify flexible consumption together with the person responsible for operations.
Retain limits for temperature, production, deliveries and charging needs.
Compare current operation, load control alone and load control with storage using the same data.
Verify the result against measurements and invoices, as well as the demand curve.

What information is needed for an assessment?

A practical starting point is twelve months of interval readings, invoices and tariff documents, together with a short description of operations. A shorter history can be used, but missing seasons and production changes must then be treated as uncertainty.

Metering point ID, network company, tariff name and effective date.
Measurement interval, time zone and any gaps in consumption data.
Billed demand and energy consumption for each period.
Planned growth, new chargers or changes in production.
Which loads can be moved, and for how long.

Questions and answers

Can network charges fall without using fewer kWh?

Yes, if changes in simultaneous demand lower the billing basis for a demand charge or capacity band. The energy charge does not automatically fall. Battery storage also incurs losses that must be included.

Are network charges always lower at night?

That depends on the tariff. Check both the energy charge and the demand calculation. Moving all consumption into the same cheap period can create a new peak even when the electricity price is low.

Is one machine’s maximum power enough to size a battery?

No. Assess total grid demand, peak duration and frequency, and how the battery can recharge between peaks. Measurements at the appropriate connection point are more useful than adding up equipment nameplate ratings.

Sources and further reading

Planning a system for a specific building or site? Bring consumption data and explain what you want to achieve so we can assess the next steps together.

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