During Thursday, the average price of electricity in electricity area four will be roughly 32 times higher than in electricity area two, according to figures from the electricity exchange Nord Pool.
At the same time, electricity prices in the past month have been the lowest for an October month since Sweden was divided into four electricity areas.
– It has been windy and hot in October. In that way, prices have been pushed down considerably, says Pontus de Maré, operations manager at Svenska Kraftnät.
Electricity prices fall significantly on Thursday. At the same time, electricity is still expensive in the southern parts of Sweden.
Electricity is most expensive in electricity area four, which includes Skåne and Blekinge. When electricity is most expensive between six and seven o’clock on Thursday evening, electricity will cost roughly SEK 3.90 per kilowatt hour. It can be compared with electricity area two, where electricity will cost an average of just over four öre per kilowatt-hour and at most just over eight öre per kilowatt-hour.
This means that the average price for electricity in electricity area four will be roughly 32 times higher than in electricity area two.
– We have also previously seen large price differences between the price areas. But the fact that they are now becoming this extreme is probably at least partly due to the new model that was recently introduced on the electricity market, says Christian Holtz, electricity expert at the consulting and advisory firm Merlin & Metis, to Today’s Industry.
Risk of higher prices in the coming years
The new model that Christian Holtz refers to is a so-called flow-based capacity calculation which, according to Svenska Kraftnät, should lead to better utilization of the electricity grid and more efficient electricity trading.
At the same time, the model has been criticized for benefiting other countries at the expense of Swedish electricity consumers.
– In general, I think that flow-based capacity allocation will lead to higher prices for SE1-SE3 in the coming years. So far, the biggest change is that the SE2 has a markedly lower electricity price than the SE1, something I don’t think would have been the case with the old model. We can also note that the electricity grid is used more on the spot market and that record transmission capacity has been made available between SE2 and SE3, says Christian Holtz to DI.
Heat and wind pressured October prices
At the same time, electricity prices have fallen widely recently, and electricity prices in the last month have been the lowest for an October month since Sweden was divided into four electricity areas, according to a new report from the Energy Agency.
– It has been windy and hot in October. In that way, the prices have been pushed down properly, Pontus de Maré, operations manager at Svenska Kraftnät.
However, prices may rise in the coming weeks, mainly driven by colder weather.