Statement on proposed policy on Norwegian power: No negative effect

31 Jan 2025 17:21 CET

The Norwegian Prime Minister today proposed a decoupling of consumer power
prices from wholesale energy markets, applicable if the Labour party wins the
election in September. Under the proposal all consumers would be eligible to
sign up for a NOK 0.4/kWh power agreement, and pay grid tariffs and possible
taxes as applicable, or stay with the current price cap (“Strømstøtte”) regime.

Otovo is compelled to issue a statement on the proposed policy’s effect on the
company, as other energy stocks have been affected by the news.

Our assessment is that:
* Otovo has less than 5% of its revenue from Norway, so any negative policy
change in Norway has negligible effect.
* It is early to estimate the details of this proposal and whether other parties
will align with it leading up to the election. The proposal sets a fixed power
price, and therefore reduces uncertainty in the returns that a solar system will
generate. We believe that this clarity for the consumer is a net positive, and
furthermore that a changing energy policy landscape can re-invigorate a
Scandinavian solar market that has been in a down cycle in 2023-24.
* Otovo believes it is possible to build solar energy systems cheaper than the
full cost of energy under the proposed policy in large parts of Norway.
* Batteries will not be profitable for a fixed price consumer, and would require
support to be attractive for the household.

We note that the Norwegian government deviates from the direction of travel of
the European Union, where markets are developing to balance intermittency and
capacity challenges, and such markets are open to aggregators and consumers.
This enables rapid product and technology development for households, at
decreasing prices. For Otovo this translates into an increase in demand for
batteries and energy management systems across Europe.

Otovo enters 2025 on a positive note. Please see attached presentation “A New
Otovo”, first held at yesterday’s Pareto’s Power & Renewable Energy Conference
2025.

More information:
Access the news on Oslo Bors NewsWeb site

637551_2025 - Otovo - Pareto Power and Renewable Energy Conference.pdf