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ENERGY

Swedish electricity prices soar to new all-time high

Electricity prices are set to reach new record levels in southern Sweden on Tuesday.

Swedish electricity prices soar to new all-time high
Photo: Anders Wiklund/TT

Less wind power than normal, as well as the cost of gas and electricity being on an upward curve in Europe this winter, has had a knock-on effect on southern Sweden, reports news agency TT.

On Tuesday, the average daily spot price of electricity south of Mälardalen (the region around Stockholm) is set to hit 4.25 kronor ($0.46) per kilowatt hour.

That’s far above the Monday price of more than three kronor, which was already a record.

During some hours on Tuesday, the price could even rise to more than six kronor, according to Nord Pool, the European power exchange for northern Europe.

In the two most northerly areas for electricity prices in Sweden, which benefit from proximity to the region’s hydroelectric power industry, the average daily price will be no more than 0.60 kronor.

What can you do on an individual level to lower your energy bills? Here’s The Local’s guide.

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BREAKING

Sweden to set aside 30 billion kronor to lower energy bills

The Swedish government wants to introduce 'high-price protection' to lower energy bills, with state-owned energy authority Svenska Kraftnät setting aside at least 30 billion kronor of energy profits to do so.

Sweden to set aside 30 billion kronor to lower energy bills

“Today we have a very important message,” Prime Minister Magdalena Andersson said in a press conference announcing the measures.

“We want to introduce high-cost protection for current high energy prices,” she said.

She blamed energy prices on Russian President Vladimir Putin and his war on Ukraine.

“We’re not going to let Putin hold Swedish households and businesses to ransom,” she said.

Svenska Kraftnät, a state-owned energy authority, expects to have funds of around 60 billion kronor in so-called “bottleneck income” next year.

The government wants those funds to be returned to households and businesses, with Svenska Kraftnät ordered to pay at least 30 of the 60 billion kronor back to households.

It will be up to the authority to determine how the money will be given back to consumers. According to the government, it could be used to lower energy market prices, but could also be given to consumers as direct compensation.

The goal is to provide more compensation to those companies and households hardest hit by high energy prices, meaning that the measures are likely to be aimed towards households and companies in southern Sweden.

It’s not yet clear when repayment will occur, but Energy Minister Khashayar Farmanbar said the government wants it to be “as soon as possible”. Compensation for last winter’s high energy prices was proposed in January and paid out four months later.

“It’s a repayment of those fees households and businesses have already paid, which we believe they have the right to,” Finance Minister Mikael Damberg said.

Svenska Kraftnät owns the main grid responsible for transporting electricity between different parts of Sweden. The 60 billion kronor bottleneck revenue Svenska Kraftnät is expected to earn by the end of next year is financed by so-called capacity fees paid by power companies and regional grid owners.

“Svenska Kraftnät are not supposed to be collecting piles of money,” Damberg said.

Capacity fees are levied when there are price differences between different parts of the country due to deficiencies in transmission capacity. Recently, those revenues have become unexpectedly high.

The EU’s electricity market regulations determine how the money can be used, for example, for investments, repairs, maintenance or lowering grid tariffs.

During the spring, the government has been in contact with the European Commission, which has now announced that governments may use the funds for emergency measures to benefit households and businesses.

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