Sweden to issue guarantees worth ‘billions’ to energy groups

Sweden said on Saturday it would provide liquidity guarantees to Nordic and Baltic energy companies worth "billions of dollars" in a bid to prevent a financial crisis sparked by Europe's energy crunch.

Prime Minister Magdalena Andersson at a press conference on Saturday about a potential financial crisis sparked by Europe's energy crunch.
Prime Minister Magdalena Andersson at a press conference on Saturday about the Nord Stream gas pipeline from Russia to Germany being stopped indefinitely. Photo: Anders Wiklund / TT

Prime Minister Magdalena Andersson warned Sweden was facing the prospect of a “war winter”, and said the exact details of the guarantees remained to be worked out.

The announcement came after Russia said on Friday it was cutting off the Nord Stream gas pipeline to Germany indefinitely due to what it said were leaks in a turbine.

The closure is expected to lead to even higher production prices for electricity companies when the market opens on Monday.

Speaking to reporters, Andersson said the guarantees were aimed at giving energy groups “the breathing room that is needed”.

She said there was “a clear security policy agenda behind Russia’s actions”.

“Russia’s energy war is having serious consequences for Europe and Swedish households and companies, especially in southern Sweden which is dependent on electricity prices in Germany, which in turn is very dependent on gas,” she said.

“This threatens our financial stability. If we don’t act soon it could lead to serious disruptions in the Nordics and Baltics,” she said. “In the worst-case scenario we could fall into a financial crisis.”

Finance Minister Mikael Damberg, speaking at the same press conference, said the Swedish decision would “secure financial stability not only in Sweden but in the entire Nordic region”.

The guarantees were expected to be in place on Monday before the stock market closing and would cover all Nordic and Baltic actors within the next two weeks.

Sweden’s parliament has been called in from its summer break to hold a vote on the government’s proposal on Monday.

READ MORE: Energy crisis pushes nuclear comeback in Europe

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Sweden’s energy usage continues to drop

Sweden's energy usage is still decreasing, if anything at slightly faster rate, according to new preliminary figures from the Energy Authority.

Sweden's energy usage continues to drop

In November energy usage went down by eight procent on average across the country. In October, this figure was 7.6 percent, according to earlier figures from the Swedish National Grid.

As previously, southern Sweden saw the largest drop. In energy zone 4 (the southernmost zone), energy usage went down 12 percent. In energy zone 3 usage went down 10 percent. In the north of the country however, usage increased compared to November last year – going up by one and four percent in energy zones 1 and 2, respectively.

These figures are preliminary, and it’s difficult to say exactly what the drop in usage is caused by, the Energy Authority says.

“It’s fair to assume that the high prices – and also the media attention around them – has contributed to lower usage,” it wrote in a newsletter titled “The Current Situation on the Energy Market”.

The weather has also had an effect. November was warmer this year compared to last year. More electric cars and energy-heavy investments in Norrland, such as the Northvolt battery factory, are likely factors behind the increase in usage in the northernmost energy zone.