On Wednesday, the government presented its proposal to compensate households and businesses for high electricity prices. It means that Svenska kraftnät must use the approximately SEK 60 billion it has in the account for so-called bottleneck revenues. At least half must go to households.
Exactly how and when the money will be distributed is unclear. But the compensation is based on the cost the consumer has incurred.
“Proposals like this could risk reducing the incentives to reduce electricity use,” said Christian Holtz, electricity market analyst at the energy consultancy Merlin & Metis to TT after the announcement.
The price slows down
Criticism is also heard from economists that the parties are now competing to put forward proposals for subsidies or tax cuts, which can lead to increased electricity consumption.
But Energy Minister Khashayar Farmanbar (S) defends his proposal.
“I don’t think it will lead to significantly higher energy consumption,” he says.
— The price signal is so strong on the electricity market, so it will continue to be profitable to improve energy efficiency.
He also thinks that the electricity price support is not in conflict with improving energy efficiency. Both things are needed.
— It is still the case that an unused kilowatt-hour is both the cheapest and greenest that you can have in your home. I really urge all households to review their usage, says Farmanbar.
Favors well-ordered
Another criticism is that it is not the weakest households that will receive the most support. On the other hand, if you live in a large villa, with a heated conservatory and perhaps an outdoor spa, the electricity bill rises.
“Even well-to-do families, or families in ordinary villas, have had much higher electricity costs, and it is reasonable that they also get a refund or get the money back,” says Farmanbar, and believes that weak households can also be supported in other ways.
— And if a solution with tax cuts had been chosen instead, it would have been easier for well-to-do families to withdraw even more money.
Unclear support
Svenska kraftnät now has until November to design the support. It can be by lowering the electricity price, lowering the electricity network charges or having a direct payment as a refund.
— It is these three measures that Svenska kraftnät is now looking at. They can come up with a proposal for a package of measures, says Farmanbar.
TT: So it is not certain that there will be a direct refund to the households?
— It may very well be that, but there may also be other solutions. We’ll see what Svenska kraftnät does, he says.