Improved design of the EU electricity market

Tobias Andersson (SD)

Madam Speaker! It is time for the Committee on Industry's debates this afternoon. We begin with the report NU8 Improved design of the EU electricity market. I wish to move for the approval of the committee's proposed decision in this report.

The legislative changes that enter into force on 1 January aim to adapt Swedish law to changes in the EU's electricity market directive and to reduce the number of entities subject to quotas in the electricity certificate system. As is well known, the Swedish electricity market is part of the EU's internal electricity market, which is why we repeatedly need to adapt our legislation based on new requirements from the EU.

The Electricity Market Directive was changed as recently as last year, and now the Tidö parties are taking the measures required thereafter. Last year's changes regarding the improvement of the design of the Union's electricity market concerned, among other things, issues of connection to the electricity grid, delivery agreements, energy sharing, electricity suppliers' risk management, last-resort suppliers, and protection against disconnection. Parts of the amendment directive's points are, however, handled directly by the Energy Markets Inspectorate or linked to the revision of other directives – partly in the following debate here in the chamber.

Madam Speaker! The proposals contained in this report primarily involve the following:

A supplier that has delivery agreements with more than 200,000 electricity users shall be able to offer electricity users delivery agreements with fixed term and price. Electricity users shall also receive a summary of the most important contractual terms before an agreement for the delivery of electricity is entered into or extended.

An electricity supplier shall have strategies to limit the risk of non-delivery, and a grid company shall select a designated electricity supplier in a fair, transparent and non-discriminatory manner.

An electricity supplier shall not be allowed to terminate a supply agreement or request that the transfer of electricity to an electricity user be interrupted if the circumstance that the supplier wishes to base the action on is subject to out-of-court dispute resolution.

The obligation for distribution system operators to provide information to facilitate connections is expanded. The obligation for electricity suppliers to receive electricity is also expanded, and requirements are introduced for network companies to make information available regarding the electricity that is delivered.

What does this mean then, Madam Speaker? I fully understand that not everyone following the debate has complete insight into what these proposals mean or what effects they have.

If I am to try to summarize the bill and the committee report with one word, that word is consumer protection. I and all other electricity customers will get more information with this proposal. It will be easier for us to understand and to compare electricity suppliers. We will be able to follow changes in electricity contracts better. We will also have better conditions to choose arrangements.

Furthermore, we continue to reduce the risk of expensive designated electricity suppliers, as the transparency of the grid companies increases.

This is a rather technical proposal that has arisen from changes at the EU level but which, when implemented in Sweden, aims to facilitate things for me, the Speaker, and everyone else who needs electricity at home so that we can gain a better ability to choose suitable products, to compare them and evaluate them afterwards, to change products, and so on.

In summary, we adapt Swedish legislation to the EU's and strengthen consumers' position on the electricity market.

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Fredrik Olovsson (S)

Madam Speaker! In this matter, I will concentrate on a single thing, namely the costs and the design of the system for designated electricity contracts. We are, in fact, in agreement on the other.

The regulation of the electricity market is based on the rather simple idea that customers should be active and themselves choose the contract that suits them best, but we know, of course, that reality is not always so simple. The vast majority of Swedes just want to get electricity as cheaply as possible. Many people – students, young adults, elderly people, people who have moved or people who find themselves in a vulnerable life situation – do not always have the time or the energy to choose. Sometimes they do not understand how or what to choose. Then they end up in a designated electricity contract. It is not such a small group as one might think – almost every tenth electricity customer has a designated contract. It is therefore about tens of thousands of households and hundreds of thousands of people. It is they who today pay the most for electricity.

The system of designated contracts has existed for a long time. The purpose was good – even those who are passive customers should have electricity delivered and not be left without. That the electricity companies should be paid for the electricity that is used is, of course, also highly reasonable.

Over time, however, a clear distortion has emerged. The prices on assigned contracts have risen faster than on others. The complaints have increased. Those who have not chosen pay today hundreds, or sometimes thousands, of kronor more for electricity than other customers. Electricity trading companies within groups also often have higher assigned prices than independent electricity trading companies.

This is, of course, completely backwards. In other electoral systems, we have done things differently. In Sweden, for example, we have chosen to have a well-functioning default fund in the pension system. It is cheap, efficient, and very competitive, precisely so that one can rely on that a non-choice does not become a bad choice.

This is a fundamental principle: The person who does not choose, or does not fully understand how or what to choose, should not be punished for it. In the electricity market, it is precisely the opposite. That is why the Social Democrats want to change the model for designated contracts. We need a system where the electricity retailers who receive designated customers do not get them more or less automatically. Instead, it should occur in tough competition. The terms for designated customers shall be tendered regularly. The state shall control the process, and the companies shall compete to offer the best price and the best terms.

We know that such a model works. We have seen examples where procurement leads to lower prices, more transparency, and clearer consumer protection. When companies have to compete for the passive customers and not just the active ones, yes, then the costs also decrease.

Let us be honest: It is not reasonable that those who do not quite understand the jungle of the electricity market should bear the burden of the market's highest prices. It is a failure in itself. A welfare society should be built on security, not on those who fall behind having to pay more.

Therefore, Madam Speaker, our position is clear. Sweden needs to have a model where designated electricity trading companies are procured regularly, passive customers are protected, and prices are pushed down through competition between the companies, not a model where the least active and the most vulnerable are punished. We want the government to be tasked to return to the Riksdag with such proposals. It is, of course, reasonable, it is cost-effective, and above all, it is fair. Therefore, I move for approval of our reservation.

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Jesper Skalberg Karlsson (M)

Madam Speaker! Sweden's electricity market faces a comprehensive pressure for change. We are in a situation where electrification is accelerating across the board, while households and companies, of course, have the right to expect secure access to electricity, reasonable prices, and clear rules of the game.

It is against that background that we are now considering the government's proposal for an improved design of the EU electricity market. The consideration is not about dramatic reforms but about necessary and well-considered changes that ensure that Swedish law corresponds to the EU's updated electricity market directive and that the market's various actors shall continue to have clear obligations and responsibilities.

Madam Speaker! The Government's proposal means that electricity suppliers with many customers will have a clearer responsibility for their contracts, particularly by being able to offer contracts with a fixed term and a fixed price. Consumers shall receive a summary of the most important terms before a contract is entered into or extended, which creates increased transparency and reduces the risk of unpleasant surprises.

Furthermore, requirements are introduced for electricity suppliers to work actively with risk management, among other things to limit scenarios where a lack of delivery would create follow-up problems in the market or create a risk that households are left completely without electricity. Involuntary disconnection is unacceptable in our Sweden.

In the area of network companies, the obligations to provide information are strengthened. The network companies shall make available information regarding the electricity that is delivered and improve the information required to facilitate connections. When it concerns designated electricity suppliers, which corresponds to last-resort suppliers in the EU directive, requirements are introduced that the network companies shall make their choices according to fair, transparent, and non-discriminatory procedures.

The government does not go beyond what the directive requires but ensures that Sweden fulfills the formal requirements in a robust and legally secure manner.

Madam Speaker! Overall, the government's proposal strengthens consumer protection, the functioning of the market, and the predictability of the regulatory framework. These are steps that are needed for the electricity market to function well as the load on the system grows and more actors connect and become dependent on a stable and long-term electricity supply.

Madam Speaker! The opposition's reservation concerns Sweden introducing a Norwegian model for designated electricity contracts with regular tenders. This is an issue that is already on the government's table through the Electricity Market Inquiry. The government is preparing the proposals, including the question of how the system of designated electricity suppliers should be developed. We do not see any reason to anticipate the government's processing and handling of the referral responses at this stage, but we note the opposition's follow-up motion as an expression of opinion on what is hoped the preparation will result in.

Madam Speaker! Energy is more than a market issue. It is society-sustaining infrastructure. It is the prerequisite for our industrial competitiveness, for the security in our homes, and for Sweden to be able to continue reducing its emissions. The legislative changes we are dealing with today adapt Swedish law to the EU's electricity market directive, which aims to create a bit more order and clarity in a system that faces great pressures but also has great opportunities. It shall make it easier for consumers to understand their contracts and clearer for suppliers to take responsibility and increase transparency for grid companies so that they can be motivated to act in a fair manner.

This is not the end point for modernizing the electricity market, but it is a step on the way toward a more secure, smarter and more competitive energy system – a system that shall strengthen the whole of Sweden.

Madam Speaker! On that theme, I also want to say that the major reform work for Sweden's electricity consumers does not necessarily take place in this specific report. But with reforms that have lowered electricity tax by 20 percent, a high-cost protection against high electricity bills, and new fossil-free base power in southern Sweden, we are managing short-term risks and creating conditions for decades of increased standard of living.

For us Moderates, safety is not just more police and harsher punishments. Safety is also not having to choose between paying the winter's large electricity bills and being able to buy Christmas presents for your children.

With that, I move for approval of the committee's proposal.

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Birger Lahti (V)

Madam Speaker! Proposal NU8 concerns the improved design of the EU's electricity market. I want to begin by stating that the reason why Swedish customers have had to pay extortionate prices for electricity, especially after Russia's war against Ukraine, is precisely our common electricity market with the EU. At the same time, Germany was perhaps a bit too hasty in phasing out its nuclear power.

Sometimes, Madam Speaker, it is difficult to be a politician when one wants to stick to the facts and has difficulty either telling outright lies or leaving relevant facts out, that is to say, not directly lying but not telling everything that one knows.

Germany relied 100 percent on Russian gas when the decision was made to phase out nuclear power, what is called Energiewende. I remember when we from the Energy Commission were in Germany in 2015. Someone told us how well the delivery of Russian gas worked – you could even set the clock with precision for when it would be delivered.

I do not want to blame Germany's decisions on which types of energy to have in its energy mix for the fact that we have sometimes had to pay sky-high electricity prices. No, I actually blame this government and also the other parties who have not dared to agree to the Left Party's proposal on Swedish prices, i.e., to separate the pricing for the export part. The Swedish prices, as we have chosen to call them, come from Bengt Ekenstierna's proposal. He calls it the Beken model. Much money would have been saved for Swedish consumers and the government if it had been introduced.

Back to the EU's electricity market. The bill is divided into two decision points. Vänsterpartiet and I have chosen not to argue about the legislative change which, among other things, aims to implement the changes in the EU's electricity market directive that we have heard about in all previous statements here and to reduce the number of quota-obligated actors in the electricity certificate system.

The second point of decision, which the Social Democrats have explained so well, concerns the fact that online companies shall assign an electricity supplier to electricity users who lack an electricity supply agreement.

A designated electricity supplier thus functions, among other things, as a supplier of last resort in the sense of the electricity market directive. However, there is no regulation regarding the procedure for appointing such an electricity supplier. The bill states that it is therefore necessary to regulate this. I can agree with that.

The Government further states that a fundamental review is currently underway, including of the system of designated electricity suppliers, and that the focus for the current bill should therefore be to introduce the regulation that is indispensable for implementing the EU's amending directive, which is what this is about. The Government therefore proposes that network companies shall choose a designated electricity supplier in a fair, transparent and non-discriminatory manner.

When it comes to this, Madam Speaker, we reach a different conclusion than the government. This concerns the motion from the Socialdemokraterna which aims to strengthen and protect consumers. I think it is high time that one stands on the consumers' side when designing laws. The motion calls for a referral that the government shall return to the Riksdag with a proposal on the procurement of designated electricity contracts of the type that applies in Norway and which we have heard about.

This would mean requirements for regular procurement of a designated electricity trading company. Such a procurement procedure would mean that electricity trading companies would have to compete for the customers who have not made an active choice – something which in turn lowers electricity prices for these customers. In short, Madam Speaker, I do not trust that the grid companies choose in a fair, transparent and non-discriminatory manner.

If the network company is also a subsidiary of a power-producing company, one does not need to have come up with the fuse or the gunpowder to understand that some suspicion arises regarding the transparency in the choice of electricity supplier.

I move for approval of the reservation in the report.

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Linus Lakso (MP)

Madam Speaker! My views on this issue may not concern what is being done – we must, of course, implement necessary EU legislation – but rather what is not being done in the electricity market area. It is a missed opportunity to present more important reforms.

We fundamentally have a completely failed energy policy, where we see a standstill in the expansion of new power production. In a situation where Sweden would strongly need to increase the expansion rate for new power production, it is instead decreasing – it is stalling. According to the forecast, it will have decreased by 75 percent during the period of three years that this government has governed. It is a catastrophe for electrification and for the climate transition, but also for Sweden's competitiveness and, ultimately, not least for our security.

An overarching problem, Madam Speaker, is that there is no target for effect. It is one of the fundamental reasons for the volatile electricity prices we have seen in recent years. We have not, at least in these days, had incredibly volatile electricity prices. This could be prevented.

We would need a target for more controllable power for both 2030 and 2035 – so-called green baseload. Currently, Europe also has a dangerous dependence on Russian fossil energy that we need to put a stop to. The Tidö parties have instead done the opposite and increased the dependence on fossil fuels.

It would work perfectly to phase out the fossil by continuing to expand, not least, solar power and wind power, together with green base load that balances the electricity system. It would provide both cheap and stable energy in the near term.

By green base power, I mean increased capacity in hydropower, more flexibility and capacity from combined heat and power, as well as energy storage in the form of hydrogen, pumped storage, heat storage, and gas turbines powered by renewable fuels. It is also about demand flexibility, i.e., smart control of, for example, electric cars and heat pumps.

To quickly get these important resources in place, a more active policy for the electricity market is needed. This applies in particular to demand flexibility, which is one of the fastest and cheapest ways to bring in more dispatchable power and thus cut the price peaks. To enable many small users to contribute to this, new roles on the electricity market are needed.

It has been quite a few years since the EU asked Sweden to introduce the role of independent aggregator. Such an entity can, for example, be a company that, through agreements, clusters together many heat pumps and thereby forms a virtual power plant that can regulate and participate in the electricity market and balance – and also balance the prices.

Sweden has, however, been incredibly slow with this, and now it looks like we won't get it until 2028. This means that large volumes of flexibility are shut out from the market, and it will not be possible to group customers who have different electricity retailers under an aggregator.

The consequence of this, Madam Speaker, is that we get higher price peaks than we otherwise would have needed to have. It is the ultimate consequence for all of Sweden's electricity customers, and it is a pity. It is a missed opportunity to ensure that these price peaks are cut in a smart and effective way.

We also need to unlock the potential for smart electric vehicle charging, but here innovative companies are challenged by the fact that grid owners have different power tariffs. We have 170 different electricity grid companies and, furthermore, different ways to connect to these services. We would therefore need to harmonize the electricity market in a significantly more comprehensive way. Nor do I see any initiatives from the government here.

Madam Speaker! Last but not least, we see another major problem in the electricity market – a Catch-22. We need cheaper electricity in the near term and an industrial policy that enables the climate transition, but instead, we have become stuck in a dangerous Catch-22 where the expansion of new electricity production has ground to a halt and the electrification of industry is being pushed into the future.

Three years of this anti-electrification policy has unfortunately yielded results. The industry's climate transition and the expansion of new electricity production have become stuck in this stalemate. The companies cannot rely on the existence of long-term rules of the game that ensure the transition is profitable. The electricity producers, on the other hand, are waiting because they are not certain that this demand for more electricity will materialize.

Therefore, it is required that the state takes a more active role in the electricity market and breaks the deadlock between electricity producers and industry. Miljöpartiet therefore proposes what we call the electrification agreement. It is a precise and effective means to bridge this problem.

It is about concluding agreements between an industry that is transitioning and phasing out the fossil and electricity producers who want and can produce more electricity – and closing the price gap, which currently stands at around 15 öre, which has caused this to get stuck in a stalemate. It could give momentum to the expansion.

Miljöpartiet has commissioned an investigation from the Riksdag's investigation service which shows that we can produce approximately 50 terawatt-hours at one-tenth of the cost of the government's nuclear power subsidies in a fraction of the time. This, combined with the potential for energy efficiency, means that we can then provide the industry with the electricity that is actually needed.

Finally, Madam Speaker, I shall also touch upon the issue our reservation concerns. We agree that it is very wise to look at Norway, which has found a good model for designated contracts. It should not be the case that one is hit by very high electricity costs because one does not have the possibility to be an active electricity customer. Better protection is needed for those electricity consumers who are not active on the electricity market. We therefore move for approval of the reservation that is in the report.

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Camilla Brodin (KD)

Madam Speaker! Today we are debating the bill concerning the adaptation of Swedish legislation to the EU's electricity market directive, which I also move to approve.

The proposition is an important step, because Sweden is not an energy policy island. We are an integrated part of the European electricity market. It is a good arrangement that we can export when we have a surplus and import when the need is great. It creates security in a situation where the world around us is uncertain and where a stable electricity supply is crucial for both households and companies.

Let me be clear: Swedish households and companies deserve stable and predictable electricity prices. Security of supply at reasonable prices is a fundamental prerequisite for welfare, competitiveness, and growth. The solution is not to isolate ourselves from the EU's electricity market. The solution is to expand the predictable, stable base power, especially in southern Sweden where the need is greatest. By increasing production in our electricity price areas SE3 and SE4, we level out the price differences and also put pressure on our neighboring countries to take responsibility for their electricity supply.

Madam Speaker! No one is satisfied with the fluctuating electricity prices we have seen in recent years. The electricity market is not better than what politics allows, and for all too long it has been governed by short-term decisions without a holistic perspective. Previous governments took low electricity prices for granted. Half of Sweden's nuclear reactors were decommissioned and weather-dependent power sources were prioritized without first securing predictable alternatives. It was a policy that hit households' wallets hard, hit industry, and hit Sweden's competitiveness.

With this government, the course is different. During the mandate period, over 70 measures have been taken to strengthen the electricity system here and now. We have fundamentally overhauled the energy policy, introduced a planning goal and a security of supply goal, and made powerful investments to increase the share of base load power in the energy mix. For us Christian Democrats, it is clear that the electricity supply must be long-term, stable, and secure.

Madam Speaker! The work we are doing is closely linked to the bill that is now on the table. The amendments to the Electricity Act strengthen consumer protection and create clear rules of the game. Electricity suppliers with more than 200,000 customers shall be able to offer contracts with a fixed price and a fixed term. Households will then receive better information and a summary of the most important contractual terms before a contract is entered into or extended. It simply increases the security in everyday life.

We also ensure that electricity suppliers have strategies to avoid missed deliveries, that grid owners appoint designated electricity suppliers in a fair and open manner, and that the agreements cannot be terminated if the matter is subject to dispute resolution. In short, we are creating order and clarity.

Madam Speaker! Extensive work is also underway to strengthen the infrastructure needed for a modern electricity system. On one hand, Svenska kraftnät and Energimarknadsinspektionen are developing a central data management tool to facilitate flexibility and provide better utilization of the electricity grids; on the other hand, Bo Diczfalusy's electricity market study is now being further prepared in the Government Offices. It covers everything from the design of the financial electricity market to how the system responsibility should be clarified. There is no reason for the Riksdag to issue any announcement on this issue right now because the government is already working with that basis.

Madam Speaker! Sweden's future electricity supply requires long-term perspective, responsibility, and structural stability. This bill is part of that work. The measures the government is taking and the proposals we Christian Democrats are driving are another part. Together, they build an electricity system that holds in everyday life and in crisis. We do it for the households, we do it for the companies, and we do it for Sweden.

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Louise Eklund (L)

Madam Speaker! Today we are debating a proposal on the improved design of the EU electricity market. I will not prolong the debate. My colleagues on the government side have argued well, and I share their view. The government's proposed amendments strengthen consumers' rights and help to create a robust electricity grid. I think it is absolutely excellent. I therefore move for the approval of the proposal in the report.

The deliberation was hereby concluded.

(A decision was to be taken on 26 November.)

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