The four Swedish electricity price areas have been the subject of a loud debate for many years. They have been considered unfair by many, as electricity customers in the southern part of the country have had to pay significantly higher electricity prices than in Norrland.
Therefore, many have looked forward to and hoped for a change in the review of electricity price areas that Sweden and the whole of Europe have conducted. Therefore, the disappointment will be great.
No Social Benefit
We recommend that the current four electricity areas be retained for the time being, says Mårten Bergman, head of transmission and electricity market at Svenska Kraftnät.
Why?
When we simulate how the electricity market would function with these different proposed electricity areas, we have seen that it would result in lower social economic benefit, he says.
Thus, the current electricity area will remain, likely also the price differences between the country's ends, at least for a few years ahead before the Swedish electricity map is potentially redrawn after a new analysis.
Bergman points out that the European method used did not take sufficient account of Swedish conditions.
Are you expecting reactions to the message?
Yes, we are certainly prepared for that.
New Conditions
On the table were four different proposals for new electricity areas, or not doing anything at all. Common to the four proposals was to make all of southern Sweden into one area, and a separate Stockholm area and one or two for Norrland.
But time has run away from these original proposals. The increasingly weather-dependent electricity system, new electricity routes in the Nordic region, and other forecasts of consumption have rewritten the conditions.
Therefore, Svenska Kraftnät already sees the need for a new analysis for potentially new proposals for electricity areas, and now more based on how the Swedish electricity system is expected to look in 2030-2035.
More Electricity Areas Needed
Will there be more areas or will there be one area?
What we see is that there will be continued bottlenecks in the Swedish electricity system. We cannot transfer unlimited amounts of electricity in Sweden, but there are bottlenecks that make there a need for electricity areas even further, says Mårten Bergman.
Not even our Nordic neighboring countries are proposing any changed electricity areas. On the other hand, there are proposals to divide Germany into several electricity price areas, which would provide social economic benefit – and which many have pointed out, lower electricity prices in southern Sweden.
But it is up to each country to decide. And the German government has made it clear that it does not want to divide the country into different electricity areas.
Sweden has been divided into four electricity price areas since 2011. The purpose is to visualize where more electricity production needs to be built. With hindsight, it can be stated that this has not happened, rather the opposite with decommissioned nuclear reactors in southern Sweden where the electricity shortage is greatest and the price is highest.
The review of electricity areas has been ongoing for several years. It is the EU's coordinated electricity authority Acer that holds the regulatory system.
