“Unfortunately, Sweden will see higher electricity prices in the future”

The new model has raised concerns about increased prices and greater uncertainty in the electricity market going forward.

– The ambition is to make more efficient use of the existing electricity grid. This is to be able to handle larger shares of non-plannable power, such as solar and wind power, which is necessary for the transition we see ahead, explains Magnus Thorstensson, electricity market analyst at Energiföretagen.

– It is important to get this flexibility that the model allows. But we have seen in the test runs that the model may actually lead to the opposite, with limited transmission in some places, which is to the detriment of the whole system.

Price differences increase between different electricity areas

Svenska kraftnät has carried out test runs of the model for almost two years, and the results show that price differences are increasing between different electricity areas in Sweden.

– In the three northern electricity areas, we see increases between 7 and 14 percent, says Thorstensson and points out that SC4, which includes southern Sweden, sees less change. If you clear for the summer months, it is not certain that the prices will actually be lower in SC4, he adds.

One of the reasons why the northern electricity areas are expected to receive higher prices is the model’s focus on the entire Nordic system.

– The model does not only work for Sweden, but you have to see it from the entire Nordic perspective, says Thorstensson.

Norway can benefit at Sweden’s expense

The model is adapted for the entire Nordic region, which means that Norway, with its weaker electricity grid, can benefit from increased opportunities to transport electricity through Sweden.

– What is happening now is that transit through Sweden is being increased. So they use the Swedish grid to bring power from northern Norway to southern Norway, says Thorstensson, who believes that it can give Norwegian customers lower prices.

This is how electricity consumers can act

For electricity consumers who are now faced with the uncertainty surrounding electricity prices, it is recommended to think about whether a fixed or variable contract is the best fit.

– There may be reasons to bind the price if you want to sleep well at night. On the other hand, there is the risk that you commit to a higher price than if you have a variable price. It’s a trade-off all the time. You have to think like with mortgages, says Magnus Thorstensson.

In summary, the new model means a change for electricity consumers, but not necessarily for the better.

– Today, the first price calculations will be based on this model, concludes Thorstensson.