Do not expect to see a drop in electricity prices this winter – rather the opposite. Over autumn and winter, electricity prices in southern Sweden could be almost twice as high as they were last year.
“There’s a high chance of higher prices than last winter, and they were exceptionally high then from a historic perspective,” Christian Holtz, electricity market analyst at energy consultancy company Merlin & Metis, told TT newswire.
Many have noticed their electricity bill taking up a larger proportion of their household budget in recent months, and that will continue to be the case. The forward price or terminpris, i.e. the market’s assessment of the expected future electricity price, is currently pointing to an expensive winter, particularly for those in southern Sweden.
“During the coming winter, prices will be very high across Europe, and that will spill over into the Nordic energy market,” John Sigvardsson, analyst at energy trading company Bixia, told TT.
In south Götaland, electricity will cost 3:50 kronor per kilowatt hour during the autumn and winter, according to Sigvardssons prognosis.
“From December to March this year, the average price per kilowatt hour was 1:40 kronor, so that’s doubled, more or less.” Sigvardsson said.
Whilst electricity prices are going up in the south of the country, prices are expected to be lower further north. In power zone 3, which encompasses northern Götaland and the whole of Svealand, prices are expected to be between 2:30 and 2:50 kronor/kWh during autumn and winter. Differences are greater in the countryside. In power zone 1 and 2, the power zones for Norrland, prices are expected to be considerably lower, around 0.8 kronor/kWh.
“Northern Sweden always has an surplus of production compared to their consumption, they have a very low consumption. At the moment, water reservoirs are even slightly fuller than normal, which provides security,” said Sigvardsson.
Holtz also sees a risk for high prices in southern Sweden this winter. The reason behind this is the high coal and gas prices putting up prices in Europe, affecting southern Sweden.
Uncertainty over Nordstream gas
In addition, there is still great uncertainty surrounding the supply of Russian gas to Europe in the Nordstream 1 pipeline. On Thursday, the gas flow resumed after a ten-day break, but only at 40 percent of normal levels.
“If Putin chooses to reduce gas levels even further or close them off altogether, the prices would skyrocket even more,” Holtz said.
A lot can affect the price, according to the two analysts. Not least the weather and how windy it is in parts of the country with wind farms.
“The prices we see now for the future market can go up by another 50 or 100 percent, or go down by half. There’s a lot of room for variation there,” Sigvardsson said.
However, under the current situation, it seems like higher electricity prices come autumn are unavoidable.
“No matter how you look at the figures, there’s not a lot to indicate anything other than exceptionally high prices,” Holtz said.
“The question is: how high will they be?”