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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
Finance Minister Mikael Damberg, Prime Minister Magdalena Andersson and Energy Minister Khashayar Farmanbar hold a press conference on energy prices. Photo: Lars Schröder/TT

“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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NORD STREAM

Sweden detects fourth leak at Nord Stream pipelines in Baltic Sea

A fourth leak has been detected in undersea pipelines running from Russia to Europe, the Swedish Coast Guard said Thursday, after pipeline explosions earlier this week in the Danish and Swedish economic zones, in suspected sabotage.

Sweden detects fourth leak at Nord Stream pipelines in Baltic Sea

“There are two leaks on the Swedish side and two leaks on the Danish side,” a Swedish Coast Guard official said, after three leaks were confirmed earlier this week on the Nord Stream pipelines in the Baltic Sea.

The official added that the two leaks on the Swedish side are “close to each other”.

The Swedish coast guard could not immediately say why the latest leak only appeared days after the initial breaches. 

Media reported that the latest leak was detected at the Nord Stream 2 pipeline, but the coast guard did not confirm this. 

Sweden had previously reported a leak on the Nord Stream 1 pipeline northeast of Bornholm, while Denmark has confirmed a leak on Nord Stream 2 to the southeast of the island, and another to the northeast above Nord Stream 1.

The vast leaks cause significant bubbling at the surface of the sea several hundred metres wide, making it impossible to immediately inspect the structures. 

Suspicions of sabotage emerged after the leaks were detected. Moscow denied it was behind the explosions, as did the United States, saying Moscow’s suggestion it would damage the pipeline was “ridiculous”. 

The UN Security Council will meet Friday to discuss the incident.

The Nord Stream 1 and 2 pipelines, which link Russia to Germany, have been at the centre of geopolitical tensions in recent months as Russia cut gas supplies to Europe in suspected retaliation against Western sanctions following Moscow’s invasion of Ukraine.

While the pipelines — operated by a consortium majority-owned by Russian gas giant Gazprom — are not currently in operation, they both still contained gas.

On Thursday, NATO declared that the damage was “the result of deliberate, reckless and irresponsible acts of sabotage”.

“These leaks are causing risks to shipping and substantial environmental damage,” the Western military alliance said in a statement.

Danish officials said on Wednesday – prior to the discovery of the fourth leak – that more than half of the gas in the Nord Stream pipelines in the Baltic Sea had leaked into the atmosphere after they were damaged.

“A clear majority of the gas has already come out of the pipes,” the head of the Danish Energy Agency, Kristoffer Böttzauw, told a press conference.

“We expect the rest to escape by Sunday,” he added.

Defence Minister Morten Bødskov said Wednesday morning that, due to pressure of the gas leaking out, it would take “one or two weeks” before inspections of the damaged structures could begin.

Fatih Birol, executive director of the International Energy Agency (IEA), said at a symposium in Paris that to him it was “very obvious” who was behind the leaks.

He said natural gas shortages in the wake of the war in Ukraine could make for a tough winter in Europe.

“In the absence of a major negative surprise, I think Europe, in terms of natural gas, can survive this winter with a lot of bruises in our bodies in terms of prices, economy and social issues, but we can go through that,” Birol said.

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