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POWER

Swedish electricity prices hit all time high

The spot price for electricity in Sweden averaged 0.83 kronor ($0.12) per kWh in December, a record high since the deregulation of the electricity market in 1996, according to figures released by electricity supplier Telge Energi.

Swedish electricity prices hit all time high

The average price furthermore represents an increase of 0.30 kronor over the past month as temperatures have plunged and demand soared accordingly.

The spot price, which peaked at 1.30 kronor per kWh in Lucia this weekend, is used as the basis for the calculation of variable electricity prices for households and businesses.

The average price for the whole of 2010 – 0.55 cents per kWh, is a full 40 percent above the average price recorded in 2009, according to the firm’s figures.

The development of the futures market, which provides the basis for calculating fixed prices for electricity, has meant that it has become extremely expensive for consumers to fix prices, the firm’s CEO John Öhnell argued in a statement.

Poorly refilled reservoirs, continuing problems with nuclear power generation and an average temperature which is seven degrees below normal, have placed upward pressure on electricity prices.

“The market is afraid of the weakness of hydrology and that the cold weather does not ease,” Öhnell said.

Öhnell expects price pressures to wane in 2011, perhaps as early as January:

“Our assessment is that the price will be about 0.10 kronor lower than in December if the weather returns to normal temperatures,” he said.

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ELECTRICITY

Sweden to double wind energy production in next four years

Wind energy is set to double its share of Sweden's power supply over the next four years as a string of giant projects come online.

Sweden to double wind energy production in next four years
The Gabrielsberget wind project in Västerbotten. Photo: Swewind
The contribution of wind energy is scheduled to grow from 17TWh in 2018 to 35 TWh in 2022, taking wind's share from 12 percent to 25 percent of total power produced. 
 
Charlotte Unger, chief executive of the Swedish Wind Energy Association trade body said the pro-renewable policy decisions had been driving growth. 
 
“Sweden has the best regulatory regime for wind power projects from a European perspective, and therefore production costs the least here,” she told Swedish state broadcaster SVT.  “Investors have confidence in wind power in Sweden, and that's because of the policies that exist.” 
 
The largest new wind farm is the giant Markbyygden project outside Piteå, which is expected to supply 10TWh per year as it comes online in stages from this year, making it one of Europe's largest wind farms.  
 
Other major projects are the Överturingen wind farm in Västernorrland, Åskälen in Jämtland, and Valhalla in Gävleborg. 
 
The new farms will make up for the shutdown of two reactors at the Ringhals nuclear power station in 2019 and 2020. 
 
 
Because the majority of the new wind power projects are in the northern counties of Norrland, Västerbotten and Jämtland, the shift will require Sweden's state-owned grid operator Svenska Kraftnät to rapidly improve capacity, especially in central Sweden. 
 
But Niclas Damsgaard, the grid company's senior market strategist, said he believed the company would be able to keep pace with the growth. 
 
“It's going to work, but all this will mean an increase in risk. In an extreme case, some major industrial consumers may not be able to buy as much power as they want, but it's not going to mean difficulties across the country.”  
 
Unger said that if the new production exceeded Sweden's own needs, then the excess could be exported into Europe, reducing the continent's coal use. 
 
Between 2022 and 2040, the Swedish Wind Energy Association hopes to double the amount of wind power produced in  once again, taking it to half of Sweden's total power use.
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