by Charles Szumski
Sweden is ready to introduce new measures to tackle the country’s soaring energy prices, Energy Minister Ebba Busch announced on Thursday (12 December), blaming Germany’s nuclear phase-out for the crisis in the country and at EU level.
Faced with growing regional differences in electricity prices and a price spike in the south of the country, the Swedish government is considering new measures to help households and businesses cope with the rising pressure.
“The government is open to supporting households and businesses if needed,” the prime minister said as citizens brace for rising energy bills during the winter months.
Busch’s comments come a day after Swedish Prime Minister Ulf Kristersson (Moderates, EPP) angered the opposition with his words: "There will be hard times ahead".
“I realise that nobody is happy when I say that ‘if we hadn’t shut down half of nuclear power, we wouldn’t have these problems’. But it’s true and it needs to be said.”, Kristersson said, referring to the previous Social Democrat-Greens coalition closing several nuclear reactors between 2019 and 2020 as part of a policy shift towards greater reliance on renewable energy sources.
Recent weeks have seen growing public frustration in Sweden, with price disparities hitting shocking levels.
In an article published in Aftonbladet, expert Andreas Cervenka said that on Wednesday (11 December), electricity prices in southern Sweden were 18,000% higher than in central Sweden. A 10-minute shower in Southern Malmo cost over SEK 31 (€2.65), compared to SEK 0.17 (€0.01) in central Sweden Sundsvall.
German nuclear phase-out detrimental
One main reason Busch cited for the surge in electricity prices is Germany’s decision to dismantle its nuclear power plants, saying it also has detrimental effects for Europe.
"I’m furious with the Germans," Busch told Swedish broadcaster SVT.
"They have made a decision for their country, which they have the right to make. But it has had very serious consequences," she added.
When wind production in neighbouring Germany is low, Swedish electricity is exported to fill the gap, reducing the supply available to Swedish consumers and driving up prices.
The supply issue and the price stem from a poor connection between northern Sweden, where there is a surplus of hydropower, and southern Sweden, where higher energy demand and limited local production lead to frequent shortages.
This structural problem is then exacerbated by the Flow-Based Market Coupling, an EU electricity market mechanism designed to optimise cross-border electricity flows by prioritising demand across the entire European grid rather than focusing on national needs.
The system was introduced in Sweden in October 2024 as part of the EU’s wider efforts to make energy use more efficient across Europe, but has had an impact on electricity prices in Sweden’s southern regions.
According to the Swedish opposition, however, the problem lies more with the EU energy market itself.
Electricity prices are rising because of the government’s new calculation methods, based on the “flow-based system (or Flow-Based Market Coupling system)”, according to Fredrik Olovsson, the opposition Social Democrats’ spokesperson on industrial policy.
“It really pisses you off. Just over a month ago, the government had the chance to pause the model that has now been introduced and contributed to high prices. There was widespread criticism from the industry and we warned that this would happen", he said.
No energy ’Swexit’
With the onset of winter, pressure is mounting on Busch to renegotiate Sweden’s role in the EU energy market and secure emergency relief for consumers while maintaining the long-term stability of the system.
However, leaving the EU energy market does not appear to be a priority for the Swedish government at the moment, which sees the beleaguered Flow-Based Market Coupling system as part of the solution.
"The flow-based capacity calculation model regulated by the EU has many effects. One of them is that more electricity can be transported from northern to southern Sweden," Busch wrote on X as she only half-heartedly acknowledged that the EU energy market impacts price increases.
"This is necessary, especially as southern Sweden has a severe shortage of electricity production in relation to consumption and grids," she wrote.
According to her, more nuclear and hydroelectric power are essential to the country’s energy price stability, and the Swedish government has decided on a series of measures until 2030 to enable the country to get more energy from all the electricity it produces.
*first published in: Euractiv.com
By: N. Peter Kramer
