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Longyearbyen faces a demanding energy transition after the coal power plant was shut down in the fall of 2023. The transition to diesel-based power production, while awaiting the phase-in of renewable energy, has led to significantly heightened energy prices.

In the proposal for the 2025 national budget, the Norwegian government wants to allocate NOK 100 million to reduce energy prices for households and businesses in Longyearbyen. The money will be allocated as an earmarked grant to the Longyearbyen Community Council, which sets the concrete energy prices.

The measure follows grants for the same purpose in the new balance for the 2023 national budget (NOK 50 million) and in the revised national budget for 2024 (NOK 125 million). The latter budget also included NOK 42 million to strengthen the security of supply in Longyearbyen.

"In May, the government presented a new Svalbard white paper, where we announced that we would strengthen the Norwegian family community in Longyearbyen and strengthen state control with important infrastructure, among other things. Security of supply and stable energy prices are important parts of this," says Minister of Justice and Public Security Emilie Mehl (Center).

Still expects increased energy fees

Community Council Chair Terje Aunevik (Liberals) says to Svalbardposten that the government's proposed allocation will hardly be sufficient.

"We have to carefully read the documents from the government and go more into the figures, but if we consider NOK 100 million in electricity support, then we have to expect that the energy fees will increase. Put simply, it could increase somewhere between 20 and 30 percent," Aunevik tells the newspaper and continues:

"We should be happy that electricity support is coming, but the reality is that the need is similar to last year. NOK 125 million for operations and NOK 64 million for investments. The investments that Svalbard Energi AS is planning so far are to improve the security of supply."

The energy agency in Longyearbyen (Energiverket) was changed into Svalbard Energi AS on January 1st, 2023. The company is wholly owned by the Longyearbyen Community Council.

A clarification of responsibilities

Today, the Longyearbyen Community Council owns and operates the energy supply in Longyearbyen, and is responsible for the energy transition.

In the 2024 Svalbard white paper, the government states that it intends for the state to take greater responsibility for the energy supply in Longyearbyen, for example, through the state-owned company Store Norske, and that the responsibility for the energy supply will be clarified as soon as possible.

Store Norske has been commissioned to carry out a concept study of various options for future energy supply in Longyearbyen, as well as a condition assessment of existing infrastructure with capital needs.

More for UNIS

The government also proposes NOK 184,1 million for the University Centre in Svalbard (UNIS) under the Ministry of Education and Research's budget for 2025.

The grant aims to promote high-quality education and research with the starting point being that Svalbard is located in a high-Arctic area.

The proposal entails an increase of NOK 15.7 million compared to the national budget for 2024 – and NOK 5.7 million compared to the revised national budget in June. UNIS then received an additional grant of NOK 10 million in light of the increased costs of managing higher education and research on Svalbard.

In 2023, UNIS had to reduce its number of full-time student admissions by 20.

With the government's proposal for 2025, UNIS will be able to resume normal operations, says Director Jørn Moen to Svalbardposten.

"These funds are extremely important to us. The fact that we had to shut down educational activities meant that research production also stagnated. We have research-based education, which is why we are now very happy that we will return to the level of 220 full-time students," Moen tells the newspaper.

The government will also give NOK 1.1 million to the Arctic Safety Center at UNIS, which works to increase the business community's competence around sustainable and safe activity in the Arctic.

Control of goods and people

In May 2022, Svalbard became a separate customs area, and the Norwegian Customs was established with a separate unit to control the transport of goods to and from Svalbard.

This unit conducts physical control of goods shipments both in Longyearbyen and in the Russian settlement of Barentsburg.

The government proposes to allocate a total of NOK 32.5 million for goods movement control on Svalbard in 2025 under the Ministry of Finance's budget.

This is NOK 12 million less than the government proposed in the national budget for 2024.

The government also introduced the control of travelers to and from Svalbard in May 2022. The Governor of Svalbard carries out the person control at Svalbard Airport in temporary premises, in the field, and onboard vessels.

In the Svalbard white paper, it is informedthat the Governor has been strengthened with a police attorney and has received increased funding due to the introduction of person control.

In the Svalbard budget for 2025, the government proposes to give the Governor NOK 95.5 million for operations – an increase of 6 percent compared to the balanced national budget for 2024.

The government also proposes allocating NOK 266.2 million for the Governor's transport service, an increase of 2.3 percent from the balanced national budget for 2024.

"The government will prioritize following up on person control and goods movement control on Svalbard in 2025, and work further with rules on safety in the field," it writes in the Svalbard budget.

Norwegian research leadership

In the Svalbard white paper, the government announced that it would strengthen Norwegian research management in Svalbard by establishing a Svalbard research office. This office will be run by the Research Council of Norway and the Norwegian Polar Institute.

"While this will further contribute to good assistance for actors interested in researching on Svalbard, it will also strengthen national control of research activity," the white paper states.

The Norwegian Polar Institute manages the Ny-Ålesund research station, which facilitates international scientific research collaboration. Every year, research institutions from around 20 countries carry out projects there.

Approximately NOK 149.6 million of the proposed 2025 grant to the Institute in the Ministry of Climate and Environment's budget is related to Svalbard, an increase of NOK 5.6 million from 2024.

In addition, the institute receives funds from the Svalbard budget, which is proposed to be NOK 4.25 million in 2025.

Kings Bay

Kings Bay AS is a wholly owned state company facilitating research in Ny-Ålesund in close dialogue with the Norwegian Polar Institute.

The company owns the land, infrastructure, and most of the buildings in Ny-Ålesund and rents out 14 buildings to research institutions from various nations.

The government proposes to allocate NOK 82.2 million to Kings Bay under the Ministry of Climate and Environment's budget for 2025, an increase of 3 million from 2024.

The grant will cover investments, any operating deficits, and necessary expenses for administering Bjørnøen AS. This company owns all the land and some cultural-historical buildings in Bjørnøya (Bear Island), the southernmost part of the Svalbard archipelago.

The government is also proposing grants for 2025 for the Svalbard Environmental Protection Fund, meteorological services, mapping and sea surveying, the cultural sector, and business initiatives. See the full overview of the Svalbard budget here.

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