New analysis: A single electricity area would weaken Sweden's competitiveness
If Sweden had a single electricity area, it would reduce the profitability of industry, weaken Sweden's competitiveness and reduce our leading position in the industrial transition, according to a recent analysis.
The government has commissioned Svenska kraftnät to analyze the conditions for Sweden to have fewer power zones, or just one. But the effect of such a change risks being both slowed growth and reduced investments, the new report shows. On the border between electricity and economics.
If the four electricity areas are abolished, electricity prices in the north would rise sharply, while the reduction in the south would be significantly smaller. According to the report, the result would be a net cost for Sweden, and that the industry as a whole would have worse conditions for growth. The analysis was conducted by Bodecker Partners on behalf of Region Norrbotten and Region Västernorrland.
– This is not a regional issue. It is about Sweden's future competitiveness, says Anders Öberg (S), chairman of the regional board in Region Norrbotten.
Increased total cost
The analysis shows that industry in today's northern electricity areas will see increased electricity costs of up to one billion SEK per area and year. In total, this means increases of over 16 billion SEK during the period 2026-2035. At the same time, costs in SE3 and SE4 will decrease, but only by around 8 billion. This means that Swedish industry is heading towards increased total costs.
– An electricity area would mean that the unique advantage of 90 percent renewable electricity in the system would disappear. The result could be that major investments in renewable fuels would not take place. This would not only be negative for Sweden's industrial development, but also for Sweden's preparedness, says Jonny Lundin (C), chairman of the regional development committee, Region Västernorrland.
Sweden today has a strong position as an industrial nation thanks to access to fossil-free and affordable electricity. In northern Sweden, the electricity mix consists of more than 90 percent renewable electricity, which means that companies operating there can easily meet the EU's requirements regarding renewable fuels.
Losing competitive advantage
With an electricity area, Sweden loses this competitive advantage. The national electricity mix becomes less green, which means that companies need to buy more expensive complementary solutions. This makes Sweden less competitive compared to countries like Finland and Spain, which are rapidly improving their conditions for electricity-intensive industry.
The report shows that the effects of the change would be felt in several ways:
- Worse investment climate
A weaker competitive advantage means that companies can choose other countries for major investments. - Fewer establishments
Decisions that today lean towards Sweden can be moved abroad. - Slower growth
Lower investments affect both industry, the service sector and exports.
Although some households may receive lower electricity prices in the short term, the analysis shows that Sweden as a whole would soon lose out on the change.
The purpose of the report is to provide decision-makers with factual information about how the proposed electricity area change affects Sweden's industrial and economic development.
Read the full report
Summary of conclusions on one page