Sweden's new government announces 55bn kronor power price subsidy

The compensation for high power bills will be paid out only in energy price zones 3 and 4 in southern Sweden, they said in a press conference in Thursday, a limit that was not part of the programme outlined by the parties during the election campaign. 

"We welcome the announcement from Svenska kraftnät today as a response to the assignment they were given in the middle of August," Energy Minister Ebba Busch said. 

"This is an energy subsidy which can help lessen the burden for all energy users - households and companies, but also organisations - which does not stimulate increased usage, as that would risk pushing up prices further."

Busch emphasised the fact that the subsidy is also clearly aimed at those who are most affected, especially those living in southern Sweden.

At the press conference Lotta Medelius-Bredhe, General Director of Svenska kraftnät (the Swedish National Grid) said that the plan would return 55 billion kronor to five million energy customers in this area.

According to Medelius-Bredhe, the subsidy could be as much as 16,000 kronor for a house using 20,000 kWh a year.

Nine days before the election, Kristersson promised, along with Christian Democrat leader Ebba Busch, Sweden Democrat leader Jimmie Åkesson and Liberal leader Johan Pehrson, that a subsidy would be in place by November 1st.

Since the election, the parties have been less clear on whether this deadline would be met.

The current plan announced by Svenska kraftnät today, was the result of an order to the authority issued by the former Social Democrat government back in August back. 

In August, the Social Democrats promised that 60 billion kronor in so-called bottleneck fees from Svenska kraftnät would be transferred back to households and companies, a figure which the former government later increased to 90 billion.

At a press conference after the announcement, Social Democrat leader Magdalena Andersson attacked the government parties for making promises on high cost protection and tax cuts on fuel during the election campaign which they could not keep. 

"It's quite spectacular the way they are so flagrantly breaking their own very clear promises," she said. "You should not promise things you can't deliver, otherwise you undermine trust in politics as a whole." 

Finance spokesman Mikael Damberg noted that the cuts in fuel tax would reduce the price at the pump by about one krona a litre. 

"I think that a lot of people people are surprised and feel like they've been conned," finance spokesman Mikael Damberg said about the fuel price tax cuts announced earlier. "There was a lot of loft rhetoric in the election campaign when the Sweden Democrats promised that diesel prices at the pump. That's clearly a very different proposal from the one they are making now. 

The next step in the process will be an individual assessment by the Energy Markets Inspectorate (Ei), Busch said. 

"Now we have a clear 'what'," she said. "The government is now dealing with 'how' and 'when' [the subsidy will be paid out], following the Energi Market Inspectorate's assessment."