Response to interpellation 2024/25:671 on electricity price zones
Translated from Swedish by AI; the translation may contain errors. The Swedish text is the original.
Summary AI, written in advance
KD considers it bad that there are large price differences between electricity areas 1. KD argues that the price differences are due to a lack of predictable electricity production 2 and advocates for the expansion of fossil-free and predictable electricity production as well as reinforcements of the electricity grid 2 1. KD argues that the electricity grid cost has increased due to weather-dependent power production 3 and that it is difficult for new actors to make investments profitable 3. KD is prepared to pay more to store energy from weather-dependent power production 4. S considers it unreasonable to have large price differences 5 and argues that the government should have influenced the EU regulatory framework for direct compensation 5. S advocates for investments in all types of power 6.
Written by AI in advance and may contain errors. The numbers lead to the speech a statement builds on; check against the text below.
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! Monica Haider has asked me if I consider it reasonable to have such large differences in electricity prices within Sweden. She has also asked me if I intend to task Svenska kraftnät with conducting a new analysis based on Swedish conditions. Finally, Monica Haider has asked me if I intend to take measures to enable the use of bottleneck fees to compensate companies and households affected by high electricity prices.
The reasons for the higher electricity prices in southern Sweden compared to northern Sweden are several. One reason is the European dependence on fossil energy for electricity production as well as on gas. Another important reason is the decommissioning of nuclear power and combined heat and power in southern Sweden – i.e., the decommissioning of baseload power – which occurred during the previous government. This has created a shortage of predictable electricity production, which in turn has led to larger price differences between the electricity areas.
In this lies that the design of the electricity system, that is, where electricity production occurs and where the electricity grid is built, is crucial for our electricity prices. Both a more even distribution between electricity production and electricity consumption in all parts of Sweden and a high and stable transmission capacity within Sweden were needed. The focus of the government's policy is therefore the expansion of fossil-free and dispatchable electricity production as well as reinforcements of the electricity grid within Sweden. We have two problems, and we meet them with solutions in both areas. Sweden needs a secure electricity system with high security of supply to safeguard competitive electricity prices regardless of the global situation.
Despite periods of high electricity prices, electricity prices in Sweden as a whole – even in southern Sweden – have been among the lowest in the EU in comparison. In recent years, the price differences between the electricity bidding zones have also decreased, and the government is actively working to further reduce the price differences between the electricity zones in Sweden.
An important part of the work to reduce price differences within Sweden is to review the electricity area divisions. The goal should be to create a better balance between electricity production and electricity consumption in different parts of Sweden in order to thereby create conditions for more stable and lower electricity prices so that Sweden can eventually become a unified electricity price area.
A review of electricity bidding zones has been ongoing within the EU, and Sweden was one of the countries included in the review. On April 28, 2025, EntsoE published its report with the results of the EU-wide electricity bidding zone review. The conclusion in the report is that none of the four alternative electricity bidding zone divisions evaluated for Sweden would provide higher socio-economic efficiency than today's division. Svenska kraftnät has therefore submitted a recommendation to the government that today's electricity bidding zone division should be maintained for the time being.
Based on, among other things, Svenska kraftnät's conclusion and recommendation, the government considers that there is a need to re-analyze the conditions for changing the Swedish electricity area division. The government therefore gave Svenska kraftnät a new assignment on 15 May 2025 to analyze the conditions for changing the current Swedish electricity area division.
Svenska kraftnät shall analyze four new alternatives for the electricity area divisions. Three of these analyses aim to analyze a new electricity area division for Sweden. The fourth analysis aims to analyze the possibility of introducing special electricity areas for export in order to isolate the socio-economically negative effects of price signals from continental markets. The new analysis shall, to a greater extent than the EU-common analysis, be based on Swedish conditions and, for example, provide the possibility to model the hydropower in Sweden in an optimal way.
The regional division of Sweden has resulted in Svenska kraftnät receiving large amounts of congestion fees. There is an EU regulation that the congestion fees may only be used to lower grid fees and expand the power grids. Svenska kraftnät uses the congestion fees for exactly these purposes.
During the energy crisis, a temporary exemption was introduced that made it possible to use the bottleneck fees to financially support households and companies affected by high electricity prices. The government took advantage of this opportunity, and just over 43 billion kronor were paid out in support to affected households and companies. If a new energy crisis were to occur, the government is open to acting so that it can once again have the opportunity to use bottleneck fees to support affected households and companies.
Against the background of the energy policy direction bill (prop. 2023/24:105) adopted by the Riksdag, the government is also working on a number of measures aimed at strengthening the possibility of connecting more companies to the electricity system and at enabling a robust, secure electricity system that delivers electricity at competitive prices where and when it is needed. The government's realignment of energy policy, with technology-neutral energy goals where all fossil-free types of power are welcome, intends to benefit both residents, households, and companies in Sweden.
Monica Haider (S)
Madam Speaker! I thank the Minister for the answer to my interpellation on price differences between electricity areas.
I can state that a fair amount has happened since I submitted the interpellation a while ago. It is good that the government is taking action.
I did not, however, receive any answer as to whether the Minister thinks it is reasonable that there are such large price differences between electricity price areas without any explanations as to why it is as it is. It does not actually help us who are to pay the much more expensive electricity bills in southern Sweden. Nor does it help Hylte Paper, which laid off 60 people in March. The company's CEO Roger Bergström says that they would have had 200 million less in electricity costs in a year if they had been located north of Gävle.
The question remains: Does Minister Ebba Busch think it is reasonable with these large price differences between the electricity areas?
Madam Speaker! My second question in the interpellation was whether the Minister intends to task Svenska kraftnät with conducting a new analysis of the electricity areas. Regarding the review of electricity areas in the EU, Svenska kraftnät pointed out that the analysis did not take into account Swedish conditions but rather what was best for the EU. Now the government has given such a mandate to Svenska kraftnät, and that is very good. Interestingly, as a fourth alternative, the government has asked them to look at specific electricity areas for export. This has previously been completely impossible. It will be very interesting to see the result.
The other analyses concern a unified electricity area, two electricity price areas with a border at the current average 2, and a division according to one of the alternatives proposed by the EU's energy regulatory authority Acer.
This assignment is obviously a step forward, but in the meantime, households and companies in southern Sweden are being hit very hard. It will take a year until the assignment is to be reported, and before then, nothing will happen.
My third question was whether the Minister intends to take measures to enable the use of bottleneck fees to compensate companies and households affected by high electricity prices. The Minister responds that it was a temporary exception during the energy crisis that made it possible to support households and companies. So it was, obviously. The Government, however, had the chance to influence the EU regulatory framework in a direction that would have enabled direct compensation to households and companies, especially in the southern areas. The Government did not take this opportunity, and we believe that it should have been done. The Minister also responds that the Government is prepared to do so if there is a new crisis.
The question is simply what a crisis is and how the government defines a crisis. In February, the difference was 91 öre between electricity price area 1 and electricity price area 4. In electricity price area 1, electricity cost 12.9 öre, and in electricity price area 4, it cost 103.9 öre. We are talking about several hundred percent. Is 200 million in higher electricity costs for Hylte Paper, which is now laying off 60 people, a definition of a crisis?
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! I shall attempt to further clarify some answers based on Monica Haider's follow-up questions.
To the question of whether it is reasonable, I answer that it is bad that there are such large price differences. My counter-question to the Social Democrats is: Do the Social Democrats mean that we should have a pricing and a system that does not take into account at all the long distances in the country and the imbalance between where we have electricity production and where we have the grid?
I can also think it is stomach-turning of Monica Haider and the Social Democrats, who are well aware that the lack of baseload is the major factor driving the price differences, not to take responsibility for the 1997 energy agreement with Vänsterpartiet and Centerpartiet, when they carried out a premature decommissioning of nuclear power and then pursued a policy that resulted in a premature shutdown of Ringhals 1 and 2. This also meant that Vattenfall did not see that there was a market basis to continue with the engineering of Ringhals 5 and 6, which otherwise to date had come far along the way.
I know that there is an acknowledgment that prices look different in the country because the conditions for producing electricity and moving electricity look different. The bottlenecks are therefore actual bottlenecks in the system, i.e., an imbalance between where we manage to transfer electricity, where we have production and where we have a grid.
Here we are now taking measures. But if we look at the two past parliamentary terms, you have contributed to making it worse. This, I think, to reuse my answer on whether it is reasonable, is bad not to acknowledge.
Well, yes, it is bad for Sweden that there are such large price differences, and therefore we are expanding both production and the electricity grid.
On the question of a new analysis, the answer is a clear yes. Regarding the question of protection against the prices on the continent and how these affect Sweden, we have defended ourselves against the Left Party's model, Sweden prices, because we do not consider it realistic or feasible. We also find it difficult to clarify what it would entail.
I have conversations and discussions every day and make decisions concerning helping companies such as Hylte Paper. I think it is worth pointing out that what we have done so far has had an effect. Electricity prices in Sweden are now the lowest in four years, and they are steadily decreasing. However, it is too volatile with too large fluctuations up and down, and it is bad with so many hours of negative prices respectively price peaks. No one knows what to calculate for the average electricity price. Furthermore, the differences within the country are large.
The solution to this is not more of the same, but a heavy acknowledgment that we must achieve a better balance between consumption and production, and here we are on the right track. I also see that we have a good dialogue here with the Social Democrats, also in order to achieve better long-term perspective.
Monica Haider (S)
Madam Speaker! I thank the Minister for further answers.
The Minister responds that the bottleneck fees may be used to build networks and lower network fees. This is the only thing they may be used for.
Svenska kraftnät recently decided to return 2 billion through reduced energy fees in 2026, and that is positive. But it is a return to grid companies and producers. There are no guarantees that it benefits households in electricity price area 4, where electricity bills are still many times higher than in northern Sweden. Any reductions in grid fees for end customers therefore depend on how the electricity grid companies choose to manage their costs and pricing. The 2 billion that are returned should be compared with the 2.5 billion in energy fees that the customer collective paid in. This should go directly to the electricity customers. Would it not be better with targeted support directly to those who are most affected?
The answer also mentions technology-neutral energy policy goals where all types of power are welcome, but also the expansion of fossil-free planned electricity production and the reinforcement of the grid.
Given the technology-neutral goals, I cannot help but ask why the government has presented a proposal, which has now also been decided, regarding financing of only nuclear power and no other types of power. If we are to manage the transition, we need all types of power, and investments in other types of power are needed before nuclear power is in place. But right now, nothing is happening. No companies are making new investment decisions regarding any type of power. The investments that are being made now rest on decisions made a long time ago. How are we to manage the transition if investments in the near term do not materialize?
The Minister says that Sweden has some of the lowest electricity prices in the EU. That is completely true. She also says that the price differences between the electricity areas have decreased. That is also true. Furthermore, she says that the government is actively working to reduce the price differences even further. But what does that help us in southern Sweden? It did not help Hylte Paper when the prices in February were, as stated, 91 öre higher in electricity price area 4 than in electricity price area 1. It is not reasonable.
I can accept that the Minister thinks it is bad, because it obviously is. But we in southern Sweden can almost be provoked when we hear that prices have gone down and that the differences have decreased, because they are still all too high and large. It must be the government's responsibility to ensure that the whole of Sweden has reasonable and fair prices.
The Minister has also said that she will demand that Germany introduces electricity zones. The Minister said: "I am furious at the Germans. One has made a decision for one's own area, which one has the right to do. But it has had very large consequences." That is completely correct.
But what is the Minister doing to influence Germany? We have been able to read that Germany's current government says no to introducing electricity price zones.
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! I shall elaborate on a part of this. Much we agree on, or we are close to each other.
I will begin with the energy charges. They are part of the regulated revenue framework, so the grid companies need to lower the costs for customers. We follow this closely. We see that very many Swedes now have an electricity bill where everything is seen as a whole, but if one looks at the details, one sees that the price for the electricity itself has gone down while the price for the grid has gone up. The grid cost is now a much larger part of the total electricity bill for an ordinary Swede. It is a result of our need to upgrade the existing power grid and a need to build new, but it is also a result of much weather-dependent power production driving the costs for the power grid.
One needs to have more power grids to be able to handle large fluctuations and changes when it comes to how much electricity is suddenly released. When the sun shines, a very large amount goes onto the grid. When the wind blows, a very large amount suddenly goes onto the grid. Other types of power must be regulated down and adapt because the weather-dependent power production has started with full blast. The power grid must be able to handle those fluctuations. Besides that, they function very differently in the system. This drives up costs, and one needs to be aware of that. We are following this very closely. There has also been a major discussion about whether the fee increases are reasonable, and we have our eyes on that as well.
I want to press the issue of technology neutrality and the fact that there are not many investments in offshore wind power or new initiatives now. No, that is how it looks everywhere in the countries that have a lot of weather-dependent power production. If you have a lot of weather-dependent power production in the system, it contributes to huge changes in volatility and price. It makes it difficult for new actors who want to build to know how they are to calculate the return on their expensive investment.
Not even very large projects that have contracts for difference, that is, difference contracts, where one receives a fixed price compensation that is far above what we have discussed for new nuclear power in Sweden, are being completed in other countries. It is therefore very uncertain in the market as a whole. I also think it is important to be honest and open about this.
To the claim that nothing is happening, I want to respond: Just look at what we have done regarding wind power! We are increasing the acceptance of wind power in municipalities, we are providing financial support to municipalities to increase the incentives to say yes, and we are moving forward with many of the proposals in Värdet av vinden. We are investing several hundred million kronor in what is called Kraftlyftet, to get more output where it is needed, and we have pilot projects with gas turbines. We have also streamlined the connection queues – that was how, for example, SSAB's operations in Sweden were preserved. Öresundsverket has been restarted, and hydropower is getting better conditions here and now. So, very much is happening, Madam Speaker, even in the short term.
What is the reason, then, why I sometimes point out that the price is lower now, that it has gone down over the past four years and that the price differences have been leveled out? Is it to say that I am satisfied? I understand that someone might react to the fact that we still have altogether too unpredictable and high prices. We do – it is still not good enough. But I do it so that people know it is heading in the right direction. And we shall do more of what we are doing now, not less.
Monica Haider (S)
Madam Speaker! We can agree that we need to do more of everything – both build more networks and achieve more production. But right now, no investment decisions are being made regarding the production of new electricity. We can also state that. It stands completely still. The reason for that is largely that decisions have been made on how much support shall be given to nuclear power, and therefore one does not dare to invest.
As said: Thank you for the answers and the debate, Minister! What I can state is that you do not intend to support companies and households in southern Sweden, at least not in the near term. If the Minister thinks that the large differences are reasonable, I have not quite received an answer, but I perceive it as that the Minister does not think it is reasonable but that it takes a bit longer to do something about it.
We who live in electricity areas 3 and 4 obviously do not think that such large differences are reasonable. We would have wished that the government wanted to do even more than what is actually happening. Getting investments in electricity production started in the short term should be high on the agenda for the government when we are to manage the transition. We need, as said, all types of power, and we need more power quickly in southern Sweden.
One way would have been to use the bottleneck fees to level out the differences in the electricity bidding zones or for the government to apply for exemptions from the state aid rules to expand the offshore grid, for example. Svenska kraftnät has 65 billion kronor in its account regarding bottleneck fees, and those funds are intended to level out the prices between the electricity bidding zones. When it comes to these funds, it is we in southern Sweden who have footed the bill.
My question remains: What does the Minister intend to do in the near future to level out the differences in electricity prices between the electricity price areas?
Energi- och näringsministern Ebba Busch (KD)
Madam Speaker! I would like to start by thanking Monica Haider for the interpellation. It feels like we could have taken a few more turns to delve deeper into this, but I will try to keep it brief.
In the short term, we will continue to pave the way for more power production – as long as it is fossil-free, primarily – and for more power grids. We have also allocated funds for this and announced them. We are happy to have a further discussion with the Social Democrats on how we can do more in this direction.
One of the measures concerns how we are to get more effect out of all weather-dependent power production that exists, i.e., how we can store more from, for example, wind power. In that case, I am also prepared to pay more for it and provide incentives for this in different ways. Offshore wind power delivers an average of 18 percent; that is its capacity factor. For nuclear power, it is 74 percent, and for hydropower, it is 84 percent.
How much money one wants to spend on paving the way for one or the other in this acute situation is affected by how much one can get out. We have a setup for nuclear power that is based on loans. The connection fee for offshore wind power is, between a thumb and a forefinger, 80–140 billion according to some calculations, for some of the larger parks in southern Sweden. It is not a loan. We do not get it back. Paying out so much of the taxpayers' or electricity customers' funds, which perhaps could have gone to other measures from Svenska kraftnät, is a tough equation to make work.
Otherwise, I look forward to continuing to see how we can join forces now that we have both Christian Democrats and Social Democrats in government in Germany. We will probably not continue to agree with the Germans on all issues, but we can probably do more together in this situation.
Source: The Swedish Parliament. The speeches come from the open data of the Riksdag, translated into English by AI, which may contain errors.