Southern Sweden has cheaper electricity than southern Norway this year – VG
So far this year, electricity prices in southern Sweden have been significantly lower than in southern Norway.
The Swedish capital has also had cheaper electricity than Oslo.
– Why?
– There is a very short answer to that: everything depends on bottlenecks on the main grid in Norway and Sweden, says Arne Österlind, one of the founders of Shepherd Energy, now energy director at H2 Green Steel in Stockholm.
He says that they have a large surplus of energy in northern Sweden, similar to northern Norway, but that the problem is to get the power south and over west to Norway. The profit in northern Sweden, he says, is around 40-45 Terrawatt hours.
– Sweden must limit transport from the northeast, because there are internal bottlenecks in the Swedish network, which can not cope with today’s power flow, says Österlind.
He estimates that it will take 15 years before these bottlenecks are a thing of the past.
– The network is quite outdated in both Norway and Sweden and there is an expansion, especially in Sweden, but the improvement will continue for 20 years, says Österlind.
I November Svenska Kraftnät, which corresponds to Norwegian Statnett, announced restrictions on power exchange with Norway and other countries. It was due challenges with limited capacity internally in the Swedish power grid.
Sends more to Norway
Restrictions on the Swedish grid remain, but just under a month ago, Svenska Kraftnät (SVK) introduced a new market solution which has increased the transmission capacity between Norway and Sweden.
– In addition, you can now also use the western lines more to get electricity to Norway, and the power that does not go to Denmark goes to Norway and that Denmark’s exports to Sweden can go directly to Norway, says Erik Ek, strategic operations manager at SVK , to VG.
– This has for many hours increased the capacity to Norway by approx. 200 percent and reached maximum capacity to Norway. This is possible when Norway’s power price is higher than both Sweden and Denmark. It has been very positive for the electricity market and lowered the price of electricity in Norway, he adds.
Arne Österlind in H2 Green Steel also points out that Norway has cables to both Germany, the Netherlands and the United Kingdom, and that especially the latest England cable contributes to the high price level in Norway.
– Prices get a boost
– The price level in the UK is very high and thus gets the price in Norway and lifts all the time, says Österlind H2 Green Steel.
The power cables to Europe are used to export more power out of Norway than what we importer. That’s how it will remain for the next 20 years, according to NVE.
Deterring one-way traffic in the new England cable. It emits 70 times more power than it takes in, even though the water level in the reservoirs in southern Norway will soon be at a record low. It was put into trial operation on 1 October and as of 25 April has sent a net 3.5 terawatt hours (TWh) of hydropower out of the country.
– The price ratio between Norway and Europe means that Norway currently has net exports on the connection to Germany and the Netherlands in an average year. We expect that net exports will end higher on the international connection to the UK, NVE writes in its report from October.
In 2019, high wind power production in our neighboring countries contributed to Norway for the first time since 2010 as far as imported more electricity than we exported.
Andreas Myhre, director of power trading at Entelios, which is owned by Agder Energi, points to Norway’s connection abroad to explain the price difference with Sweden.
– Norwegian water reservoirs optimize against foreign competitors. Since Norway was connected to Germany, Denmark and Sweden, the Norwegian electricity price has for many, many years been almost equal to coal power and gas power. But as soon as it blows we get imports. At Easter, we got from all over the world, including the UK, says Myhre.
But he is not worried about filling degrees in Norwegian water reservoirs, which was 22.1 percent last week, approaching record lows.
– No, I do not imagine that we will have a disconnection problem. It has been good in the 20 years I have been with. In the worst case, we get a week, where you have to shut down the industry. In that case, it will be rationed very elegantly, says Myhre.
Net exports 3.7 million MWh
Figures from Statnett show that so far this year Norway has net exported 3.7 million Megawatt hours. But in April, net exports were down to 20,000 megawatts, then we imported next just as much as what we exported.
Statnett informs that they work closely with Svenska kraftnät on solutions to make the best possible use of grid capacity and build collaboration capacity for the future.
The planned initiatives in Sweden and Norway will increase the total transmission capacity north-south by 50-60 percent, but not everything will be completed until closer to 2040.
In Norway, this includes upgrading to 420 kV over the Sognefjord and down the whole of Western Norway, from the south in Nordland and through Central Norway and between Sunndalsøra and Oslo (Gudbrandsdalen). In Sweden, a number of reinforcements over time will provide greater capacity among central and southern Sweden.
– It is important to point out that the grid reinforcements that will increase capacity between north and south will be built over time and are not a long power line from northern Norway to southern Norway, but more grid measures in several regions, says Executive Vice President for Power System & Market Gunnar Løvås in Statnett in a press release.