The electricity subsidies of over 60 billion have become too extensive, especially for companies. This is what the Fiscal Council claims in its annual report on how the government manages fiscal policy.
The council believes that the government, with less extensive electricity support, could instead have invested in budget measures to support those most affected by the high electricity prices without risking fueling inflation.
“With a more limited electricity subsidy, without creating problems for monetary policy, there would have been room for targeted subsidies to particularly vulnerable households,” the report states.
Southern Sweden was double compensated
The council directs the most criticism towards the electricity support for companies in southern Sweden. One reason, according to the council, is that companies have been able to pass on their increased electricity costs to consumers to a large extent. In addition, households in southern Sweden were double compensated.
“Support for households should have been limited, for example through a consumption cap above which support would not be paid. Particularly critical is the advice on the third electricity subsidy that was announced in January 2023. The subsidy compensates for electricity costs during November–December 2022 that households in electricity areas 3 and 4 were already compensated for with the second electricity subsidy”.
Even those with a fixed price were compensated
Companies often have fixed price contracts for electricity, which means that they may not have had any increased electricity costs. In the final stages of the design of the electricity support for companies, the government has changed the proposal so that fixed price agreements can affect the support.
In general, the Council believes that governments should be careful about compensating for prices that rise in a market. It creates expectations for additional and new support.
The electricity subsidies are paid with bottleneck fees that have accumulated in a pile at Svenska kraftnät and go way beyond the budget.