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Pricey power threatens Swedish industry: CEO

Pricey power threatens Swedish industry: CEO

Published: 10 Dec 2010 11:59 GMT+01:00
Updated: 10 Dec 2010 11:59 GMT+01:00

High prices in Sweden for electricity and wood have made pulp production unprofitable, with pulp manufacturer Rottneros suspending parts of its production lines as a result.

"Energy companies earn a lot of money from the high prices. It is a perverse system that those who profit from this are the electricity companies," Rottneros CEO Ole Terland told the TT news agency.

Separately, Sweden's Ringhals 1 nuclear power reactor in Varberg 60 kilometres south of Gothenburg on the country's west coast was shut down again on Friday.

Rottneros has decided to suspend production at its so-called CTMP (chemithermomechanical pulping) line at its Rottneros mill north of Karlstad in western Sweden for about 10 days.

Extremely high electricity prices combined with high wood costs makes sales unprofitable, according to a company statement.

"Sweden cannot live with double the energy prices of the rest of the world and believe that we can still have energy-intensive production. It will never happen," said Terland.

According to him, the greatest problem is that Sweden has no energy policy. He added that it is absurd that Swedish energy producers benefit from electricity shortages that currently affect electricity-intensive industries.

He is also particularly critical of how nuclear power plants are operated.

"We have terribly poor maintenance and operational availability at our nuclear power plants. That is the core problem. I don't understand why Sweden is much worse than other neighbouring countries," he said.

Ringhals 1 was closed after a new fault was discovered, newspaper Hallands Nyheter wrote on its website on Friday.

The reactor was restarted last Friday after an audit, but was taken offline overnight on Monday, when a measurement error was found.

On Tuesday, the reactor resumed production with the hope that it would reach full power later in the week.

However, the reactor was disabled again on Wednesday evening for repairs and is not expected to restart until next Thursday.

"It is unfortunate that this takes place during a cold snap, but we cannot compromise with security," Gösta Larsen, communications director at Ringhals, told the newspaper.

The interruption at the Rottneros mill will result in the loss of half of its production and affects one-fifth of the entire company's output.

"This is a consequence of ineffective energy policies. Factories cannot run when the owners need to send money for every tonne that they sell. As a consequence, they have to close production," said Christer Larsson, economist at the Swedish Paper Workers Union (Pappers).

The most important task is to solve the long-term problems, he added.

"It is about getting more energy sources at lower costs than what we currently have on the margin. It is clear that upgrading nuclear power plants is of immediate importance and the need for new nuclear power plants as well," said Larsson.

"However, it requires a broad political agreement so that it remains in place through several terms of office," he added.

TT/The Local/vt (news@thelocal.se)

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Your comments about this article

14:58 December 10, 2010 by Great Scott
When you privatise utility's this is what you get, sky high prices to feed fat cat morons.

The Swedish government will nothing about it either, they are all friends together.

All utility's should be nationalised.
15:16 December 10, 2010 by Zill
How's about putting the (currently mothballed) nuclear electric generating station at Barsebäck (two reactors) back in service?

Such a move would anger the Swedish Green Party (Miljöpartiet de Gröna) and the Left Party (formerly VPK, or Communist), but so what?
15:54 December 10, 2010 by PhilHill
What really annoys me about electricity prices in Sweden is that the tax is about 100%. In the UK its 5%.

This means that we are paying double the real price. Some people might argue, that this is good, because it helps to reduce CO2 pollution, but the fact of the matter is that none of the power produced in Sweden produces CO2.

Its all nuclear, hydro and wind.

So what happens to people like myself that cannot afford to heat their homes using electric radiators (elements), Well I switch to using my old Kakelugn (old tiled oven) and this of course does produce CO2 pollution. The taxes on electricity and the high electricity prices are actually causing more pollution than if the prices were kept low. The whole policy is a mess in my opinion.
17:54 December 10, 2010 by Swedish123
High Prices. Yes everybody know why. To pay all the social benefits to immigrants.
21:07 December 10, 2010 by Brucelee@stockholm.sweden
Government took 100% of the energy price, that is evident that both government and energy company capitalist are beneficiaries of high energy price, it is true politicians are friends of those energy tycoon, in this sense this government will not take any step to stop the energy price from going higher and higher
11:11 December 11, 2010 by jackx123
so.... with increase population coupled with higher standards of living (one must assume) it's only logical to also assume that there will be an increase in power consumption. The question is - WHAT DOES THE GOVERNMENT DO ABOUT IT?

Seemingly VERY little. The subject is all the time to turn green, but it's like saying I'm 50km behind and still want to win the race on the same tank as my competitor, well I got news - that dog ain't gonna hunt.

Wake up and expand hydro power (green) and nuclear. It's the only way out of the hole.
20:48 December 11, 2010 by izbz
Swedish 123

Ya ya blame it all on the immigrant. I an immigrant is one of those who refuse to work black money. always paid my taxes to also help to paid for social benefits to immigrants as well as Swedish. What the F has electricity got to do with immigrant. By the way did you vote for SD?

Comment wisely nasta gang. Government should have control over electricity, no private sector.
17:41 December 12, 2010 by weiler
Hm, the Swedish consumer pays Kr2/Kwh, industrial users about Kr0.70/Kwh. So what exactly are they (industry) complaining about? Only Bulgaria and Estonia have cheaper industrial Kwh rates than Sweden, so the reason for lack of competitiveness must be sought elsewhere, I think...
07:33 December 14, 2010 by wabasha
Barsebäck is rather old (1969/75) and 20k from Copenhagen, so dont expect it to re-open. build new! just like the Finnish.
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