Making Sweden a single electricity price area without bottlenecks has little effect on the price of electricity, according to a study from Sweco. It is mostly only more expensive in the north.

Most of the price of electricity falls if the export cables are cut, but not many would like to build new electricity production in the country.

Elnationalism lowers the price most, in the short term. Archive image.
Elnationalism lowers the price most, in the short term. Archive image.

The consultancy company Sweco, with many in the electricity industry as its customers, has tried to count on the effects of different scenarios, options that are often involved in the debate about the high electricity prices.

The different options are more or less unrealistic to implement in a short time, in the coming year/year.

"But it's a way of trying to separate the different scenarios", says Conny Udd, Divisional Manager Sweco Energy & Industry.

Most Falling

Most of the electricity prices would fall, in the order of SEK 1:30 per kWh, if export and import cables abroad were closed down, a kind of elnationalism, according to Sweco's calculations of eight different scenarios. It is a short-term solution that, except for Sweden becoming more vulnerable, is hardly a winning method of getting investors to invest in new electricity generation in Sweden if export opportunities are strangled.

But it still shows the great impact of electricity prices in our surrounding world on Swedish prices.

In the same way, a return to normal fuel prices on the world market, mainly gas and coal, would reduce the electricity price in Sweden by around 90 cents/kWh, which is not something we control, but is almost to be considered as the "Putin prices" we have now.

Rising prices

The lowest price effect, in northern Sweden even rising prices, has the proposal as several political parties on the right, to remove the four electricity areas and make a single electricity area of Sweden while the transmission capacity is unlimited. Then the price drops in southern Sweden with around ten cents while it rises in Norrland with around 50 cents/kWh.

Nor does it have a huge price effect for new nuclear power and/or offshore wind, solar or cogeneration. According to Sweco, this results in a price reduction, roughly 20-30 cents per kWh, provided that the other parameters remain unchanged.

But, on the other hand, Sweden needs significantly increased electricity generation over the next 20-30 years to cope with electrification of society. All new electricity generation is needed, the message from an increasing number of electricity debaters, and putting them against each other is stupid.

"We need more of everything", says Conny Udd.

A Defence Budget

Sweco has also calculated the huge investment costs that Sweden faces to meet the estimated need until 2050 when electric cars increase, the industry will become greener and more.

SEK 1 800 billion, or SEK 60 billion per year, has been calculated by the consulting company as necessary investments in more electricity grids and new electricity generation.

"It's like an annual defense budget", says Conny Udd.

On top of that, energy storage is expected to be necessary.

"So it probably gets even more expensive", he says.

Facts: That's how it's been counted

The analysis covers market prices on the physical electricity market (the price of the Nord Pool power exchange), and other factors may affect the price of the final customer, households and companies, which are therefore not included in this analysis.

In particular, the State or customers subsidize individual power types by paying for e.g. Electricity generation (e.g. Electricity certificates for renewable electricity, wind and solar), grid connection of new electricity generation (sea-based wind power), electricity producers' risk (credit guarantees for nuclear power) or electricity costs for individual consumers in the form of high cost protection.

There may also be different system costs in the form of increased demand for grid capacity, balancing or power reserve.

Source: Sweco