Considerably cheaper electricity prices than on the continent is one of the main arguments for Stegras billion investment in fossil-free steel to be able to compete with existing players in, among other things, Germany.
There is no way to get this type of energy for large-scale hydrogen production in Europe at competitive prices, says Stegras CEO Henrik Henriksson.
One of the disadvantages of production in northern Sweden, on the other hand, is that it means significantly higher logistics costs than competitors on the continent. At the same time, major investments in infrastructure are required.
German electricity prices
Stegras production will take place in three stages. First, a hydrogen factory, followed by iron sponge production and finally a steel mill. According to CEO Henrik Henriksson, electricity costs will account for 75 percent of the total production costs in the hydrogen factory, 50 percent of the costs in iron sponge production and around 25 to 30 percent of the total production costs in the steel mill.
So important is the electricity, says Henrik Henriksson and adds that the cost picture becomes completely different with German electricity prices.
At the same time, attempts are being made in Germany to reduce electricity prices, including through subsidies.
A cloud of worry
In the spring, the government again gave Svenska kraftnät the task of investigating whether it is possible to have an electricity area in Sweden. It would probably result in lower electricity costs for consumers in southern Sweden, but raise the price in the north.
The important part is our electricity price in relation to where it ends up in Europe.
Svenska Kraftnät's sister organizations on the continent are instead looking at dividing the German electricity market into several electricity areas, which could benefit the Swedish electricity market.
Electricity is at the same time the big cloud of worry ahead of the company's phase two when production is planned to be doubled. The company cannot make decisions on investments for phase two as they still lack power allocation for it.
But it does not affect phase one or getting started with production there.
