Experts: Volatile electricity prices even with new nuclear power

Electricity prices in Sweden are expected to remain volatile, experiencing significant ups and downs even with the development of new nuclear power. A report from Energiforsk, an energy research company owned by the energy industry and the state-owned Svenska kraftnät, forecasts the electricity system's development up to 2045.

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Regardless of the power mix, there will be large variations.

"Regardless of the power mix, there will be large variations," stated Martin Vallstrand, CEO of Energiforsk. The report highlights that weather-dependent sources like wind and hydro power will continue to play a major role, as will the interconnected European electricity market. Events like the wars in Ukraine and the Persian Gulf have shown how price increases for gas, used in continental power plants, can impact Swedish prices.

While new nuclear power can help shield Sweden from some of these fluctuations, the report suggests that the price swings will not disappear entirely. Building new nuclear power is the most expensive form of energy generation. The government's proposed support model includes a guaranteed minimum price, financed by the state, which will ultimately increase the overall cost of the electricity system, even if it doesn't immediately affect consumer prices.

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We can protect ourselves from that to some extent if we build new nuclear power, but the fluctuations will not disappear.

The analysis indicates that higher electricity prices are necessary for new electricity production, including onshore wind power, which is the cheapest option. The report emphasizes that more wind power is needed to prevent the electricity system from becoming too expensive. The future average price of electricity is projected to rise to between 50 and 70 öre per kilowatt-hour, compared to 20-60 öre over the past decade. Energiforsk notes that energy companies are eager to invest, but the high cost environment and persistently low electricity prices have hindered investment.

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Energy companies want to build, but the high cost environment that has emerged in recent years, combined with electricity prices remaining low, makes it impossible to invest.