Fact: The purpose of “flowbased”
The Nordic electricity system is divided into several different electricity areas and Sweden into four electricity areas.
In recent years, the price differences between areas have increased significantly, with customers in southern Sweden paying significantly more for electricity than in the north. The short explanation is that there are limitations in the power lines, there are capacity limitations from north to south, but also across the countries.
The new calculation models, flow-based capacity calculation, should be able to calculate with more data how the lines can be used most efficiently, which should increase the transmission capacity of electricity.
The purpose of the smarter electricity grid is to make electricity transmission between ends of the country and between countries better.
“It’s about making the electricity grid more efficient, optimizing the benefit to society,” says Erik Ek, strategic operations manager at Svenska kraftnät.
Svenska kraftnät, together with its sister organizations in the Nordic region, is about to revise the calculation models to increase the flows between the different electricity areas. The requirement comes from the EU.
— We are going to introduce something that the continent has already done, says Erik Ek.
Higher price
The model should also facilitate the connection of more power, as the grid can be used better.
Behind the technical concept of flow-based capacity calculation (flow-based in English) hides more data-driven calculation models of how to use the power lines smarter. The idea is that it will even out prices if the flow between the areas improves, according to Erik Ek.
But even if it becomes more efficient overall, not everyone will be a winner.
A parallel test run of the new system for ten weeks during the winter shows that electricity prices were higher, a total of one billion kroner more for customers. During a single week, it was 18 percent more expensive in electricity areas 3 and 4, i.e. Götaland and Svealand, than with the current regulations, according to the industry organization Energiföretagen, which submitted its views to Svenska kraftnät.
No conclusion
But it is too early to draw those conclusions from three months of test driving during the winter, Svenska kraftnät thinks.
— We want to test drive over a year so that we get all the seasons. Then we’ll see how it turns out, says Erik Ek.
But of course, there can be higher prices on certain occasions, admits Erik Ek, although also lower during other periods.
Magnus Thorstensson is an analyst and responsible for the raw power market at the industry organization Energiföretagen. According to him, the new model makes the electricity market more complex and difficult to predict and is reminiscent of the division of Sweden into four electricity areas from 2011, which did not directly cheer the market.
The new calculation models disadvantage customers in southern Sweden and also the Danes. According to Thorstensson, the winners seem likely to be larger electricity producers.
More explanations
When asked why the energy companies are protesting, they do not represent the customers, Magnus Thorstensson replies that it risks creating protests from the electricity buyers against things that are not in the hands of the electricity producers. It will be an “unnecessary suspicion of the electricity market and its actors”.
But another explanation for the electricity producers’ reluctance could also be that the electricity producers find it more difficult to optimize their profits with the new calculation model.
The idea is that the new system, if it turns out well and the regulatory authorities in the Nordics give their approval, will be put into operation in the spring of 2024.