Sweden’s fixed-rate energy plans reach record high

If you're looking to take out a fixed-rate energy plan for the next year, don't expect it to be cheap. The cost of fixing your energy rate is currently higher than ever, particularly in southern Sweden.

Sweden's fixed-rate energy plans reach record high
Photo: Jonas Ekströmer/Scanpix/TT

This week, energy prices in southern Sweden have reached over 5 kronor per kilowatt hour, excluding taxes, public broadcaster SVT reports. These are the highest energy prices since the Swedish energy market was deregulated in the 90s.

In the north of the country, prices are much lower.

Despite the fact that Sweden is not as reliant on Russian gas as other European countries, it is still affected by what happens in the rest of Europe due to the shared European energy market.

Fredrik Beskow, market analyst at the Swedish Energy Markets Inspectorate (Ei), told SVT that the energy situation in Germany is currently affecting the market to a large degree.

Germany is reliant on Russian gas, and supplies from Russia have recently been cut off.

“That means that Germany needs to replace gas with a different energy source, meaning that demand for electricity has gone up,” Beskow told SVT.

Another factor which can affect energy prices is the weather – windy weather means there is a higher supply of electricity due to wind farms, while high temperatures have a negative effect on nuclear power production in southern Europe.

How expensive is it?

SVT reports that according to figures from price comparison site Elpriskollen, which Ei are responsible for, prices in August were at record-high levels.

For an apartment in the most southern energy price zone in Sweden, a one-year fixed-rate energy plan costs 5.15 kronor per kilowatt hour, on average. An average energy usage of 2,000 kilowatt hours per year would mean an energy bill of 850 kronor a month.

For a detached house in the same area, the same plan is cheaper at 4.99 kronor per kilowatt hour, but usage is likely to be higher – as much as 20,000 kilowatt hours if the house’s heating is electric rather than water-driven. This would result in an energy bill of over 8,000 kronor a month.

Many electricity providers have stopped offering fixed-rate plans completely – the number of providers offering this service since the beginning of 2021 has almost halved, SVT reports.

Beskow believes this could be due to the unpredictability of the market.

“There’s a risk that it becomes too expensive to buy this kind of plan,” he told SVT.

“Or you buy the plan at a lower price, and then the company loses money on it”.

One of the companies which has stopped offering fixed-rate plans is Bixia.

“Most companies can’t handle this kind of volatility,” Johan Sigvardsson, analyst at Bixia, told SVT.

“We don’t produce any electricity ourselves and we don’t have the capacity to handle the fluctuations on the market right now”.

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Nord Stream 1 gas pipeline hit by ‘leaks’ in Swedish and Danish zones

Two leaks have been identified on the Nord Stream 1 Russia-to-Europe gas pipeline in the Baltic Sea, hours after a similar incident on its twin pipeline, Scandinavian authorities said Tuesday.

Nord Stream 1 gas pipeline hit by 'leaks' in Swedish and Danish zones

“Authorities have now been informed that there have been another two leaks on Nord Stream 1, which likewise is not in operation but contains gas,” the Danish climate and energy minister Dan Jørgensen told news wire AFP in a statement.

Following the leaks, Jørgensen said the authorities called for “higher levels of preparedness in the electricity and gas sector” in the country.

One of the leaks on the Nord Stream 1 pipeline occurred in the Danish economic zone and the other in the Swedish economic zone.

Like the leak on Nord Stream 2 the day before, the incidents are “subject to safety measures”.

The Nord Stream 1 leaks were first spotted Monday evening, an hour after a drop in pressure was reported in Nord Stream 2, according to the Swedish Maritime Administration (SMA).

“Around 8pm we received a report from a passing ship saying they saw something on their radar a little further north of the island of Bornholm,” Fredrik Stromback, spokesman for the SMA, told AFP.

As a result of the leaks, navigational warnings have also been issued for a distance of five nautical miles and a flight height of 1,000 metres.

“The incidents on the two pipelines have no impact on the supply to Denmark,” Jørgensen said.