EXPLAINED: Who's telling the truth about electricity in Sweden's election?

Lennart Söder, at Stockholm's KTH Royal Institute of Technology, and Lars J Nilsson, at Lund University, are two of Sweden's leading experts on energy systems, power generation and transmission.

The Local asked them for their thoughts on why electricity has become such a prominent issue in this year's campaign. 

Why is electricity such a big issue in today's election? 

"I think it's it's simply political," Nilsson says. "The conservative parties are hoping to gain votes by bringing up the nuclear issue. I don't think they seriously think that we will build new nuclear in Sweden. Everyone knows that it's terribly expensive and takes a very long time." 

Söder agrees: "The right-wing parties (Sweden Democrats, Moderates, Christian Democrats and Liberals) have nuclear power as a common interest where they can show unity. There are also several communities where wind power resistance has become significant, and by stating 'we think it was stupid to shut down Ringhals', they can attract voters – even if this will not in any way solve the long-term challenges in Sweden, which is to build a lot of new power production as cheaply as possible." 

Today's record high power prices, have also obviously helped push electricity to the top of the agenda, they add. 

"We in Sweden are not used to these price levels of power, and for people who own larger houses, it is rather a large amount of money," says Söder.  

To what extent is the public being misinformed by politicians and the media? 

"Honestly, a lot!" exclaims Söder. "Ringhals will probably not be restarted according to the owners, new nuclear is very expensive, small modular reactors are not available on the market, and there are scenarios from the Swedish Transmission System Operator (a long-term analysis report from spring 2021) for a 100 percent renewable power system. I do not state that 'nuclear will not be there', but I certainly state that 'nuclear is not necessary'".

"It is not fact-based or informed by reality," Nilsson agrees. "And to me, it all boils down to attracting different types of voters. So you know, logic and reason flies out the window when it's time for the election." 

The key thing missing from the debate, he argues, is an honest discussion on the true costs and timelines for new nuclear power stations. 

"Nobody is calling them out on this," he complains of the way the Swedish media has covered the issue. "If they want nuclear, how are they expecting to get it? What type of subsidy will they give? For Hinkley Point in the UK, there's a 35-year contract where the government promises to pay £93.5 per megawatt hour -- so about 1.1 krona per kilowatt hour for 35 years. That's a heavy subsidy. So if the Moderates or the Liberals really want this, how are they going to set it up? They should explain that." 

At the Hinkley Point price, Nilsson adds, it might actually be cheaper to generate hydrogen from wind power when power prices are low, store it, and burn it in gas turbines when prices are high, even though more than half of the electricity produced would be lost in the process. 

Why is the power price in Sweden so high at the moment? 

"Right now we have this extreme situation with with gas prices in Germany, and Denmark, which is pushing up electricity prices," Nilsson says. 

The power price in Sweden is set on the Nordpool power exchange, based in Oslo, with the headline price set by the so-called price-cross between consumption and production in all areas in Europe. This means the power price in Sweden is currently largely being determined by power markets in Poland and northern Germany, where prices are sky high due to the gas shortages caused by the war in Ukraine. 

"A buyer in Southern Sweden will have to pay a price [high enough] so that even more power is not exported to Central Europe," Söder explains. "Sweden is the largest power-exporting country in Europe, but we still have to pay a lot (but less than the countries we export to) since there is a general lack of energy in Europe because of the gas crisis caused by Russia."

Would prices be lower if nuclear power plants had not been closed? 

The Moderate Party, Christian Democrats, and Sweden Democrats have argued that if the Ringhals 1 and Ringhals 2 nuclear power plants had not been closed in 2019 and 2020, power prices would be much lower, citing a report form the Energiforsk Institute which suggested prices would be 30-45 percent lower if the two plants were still operating. 

But Marcus Wråke, the institute's chief executive, told the SvD newspaper this week that he was "a little concerned" at how his report's conclusions were being used by politicians. 

"It's true that all things being equal, there would have been lower prices in the autumn of 2021 if Ringhals 1 and 2 had still been there," he said. "But that don't say much about whether it was a smart decision to shut down Ringhals 1 and 2, and says even less about whether it would be smart to build new nuclear power stations as a way of reducing electricity prices right now." 

According to Nilsson, if you take the year as a whole and concentrate only on the two central regions of Sweden where the power stations were located and where there is a shortage both of production capacity and connections to northern Sweden, the Energiforsk estimate "doesn't sound crazy". 

But even with these nuclear power stations operating, Sweden would still be experiencing extremely high prices. 

"Right now we have this extreme situation with gas prices in Germany and Denmark, which is which is pushing up the electricity prices. It's an extreme situation, so even with nuclear, I think we would have had very high prices." 

It's also worth noting that the Energiforsk report estimated that power prices would have been 35–50 percent lower if Sweden had opened an additional large, offshore windfarm off the coast of southern Sweden. 

Could Ringhals 1 and Ringhals 2 have been kept open, given the right investment?

"It's a difficult question," Nilsson says. "If you ask Vattenfall, they say that they closed it down on commercial grounds. The details of the tax situation and how much that affected the decision, it's difficult to say. One reason they had to close was that we had several years of very low electricity prices. So they weren't competitive." 

"The question is, 'what is the 'right investment?' Söder says. "If you completely renew the whole plant, i.e. this is then a “new plant”, how much would it cost?". 

What is the best way of reducing power prices in the short term? 

"In the short term, it would be energy efficiency, enjoying the same level of services, but using energy efficient technologies," Söder says. "The other way would be saving electricity: turning off stuff, turning down the heat if you have electric heating or heat pumps. If people really made an effort in that direction, that would have an impact on prices.

For him, that's the main reason why the "high-cost protection" schemes announced in recent weeks by both the Moderate Party and the Social Democrats, are a bad idea. 

"That's that's why it's so stupid when the government says 'we're gonna subsidise electricity'. It tells me as a consumer that I don't have to do much because it won't affect my bill, and that will keep prices high." 

Sweden's Prime Minister, Magdalena Andersson, must be aware of this, he adds.

"She's got a PhD in economics. She must know it's stupid to subsidise electricity. The simple reason is that it's politics, to attract voters." 

What is the best way of reducing power prices in the longer term? 

"I think we first have to identify the problem, which is a lack of fossil-free, Russian-independent energy," Söder suggests. "We either need a lot of this or reduced consumption. There are then two options: the liberal method which means [relying on] prices, i.e. the consumers in Europe have to pay, through their electricity bills, for the cost of a fast-growing electricity sector.

"The alternative is to finance a lot of this through the tax system, which still means that people are paying for it, but through taxes instead of prices. Of course we can 'lower the prices', but is this the best way of using the taxes we pay?"

So will Sweden's next government massively subsidise people's electricity bills? 

Nilsson is sceptical. He believes that the "high-cost protection" schemes pledged by both the Moderates and the Social Democrats are so expensive, and so potentially counterproductive when it comes to energy saving that they will be quietly dropped or downsized regardless of who wins the election. 

"I think irrespective of the government, it will somehow be slowed. I mean, they have to do something, but it could be less than promised. Perhaps, they will find smarter ways of doing it so that you don't disincentivise savings and energy efficiency."