No one takes responsibility for the whole of the electricity market

  

Wolfgang Hansson

Published: Today 07.47 

 

Updated: Today 08.53 

 

This is a commenting text. Analysis and positions are the writer's. 

 

COLUMNISTS 

 

Providing companies and citizens with energy is a fundamental task for society, just like healthcare and schools. 

 

But since the electricity market was deregulated in 1996, there is no national governance to ensure that there is enough electricity that reaches everyone. 

 

A number of actors are responsible for their small tear, but there is no one who takes total responsibility. No one has the helicopter perspective. 

 

It was very clearly noticeable when the day before yesterday I ended up at the Studieförbundet Näringsliv och sahmälle seminar on Jakobsbergsgatan in Stockholm about how the electricity market can be improved. 

 

Here there were a number of the country's foremost experts on the electricity market from the industry's various companies and authorities gathered in the same reasonably large conference room. 

 

Everyone seemed to agree on the problems, but everyone also had different ideas about what it would take to solve them. Everyone starts from their own little piece of the pie. 

 

It is with the electricity market as with other markets that have been deregulated.

 

 

Wind power plant in Jämtland. Photo: JERKER IVARSSON 

 

The responsibility is divided among a number of private actors. These are primarily driven by the motivation to make money. Therefore, new electric power is not primarily built where it is needed, but where it is easiest and fastest to get a permit, thus providing a quick return. 

 

Since the pharmacy market was deregulated, it is possible to get hold of beauty products almost at all hours of the day, but it is commonly witnessed how many people are forced to go home without getting their medicine because the pharmacies do not have it in stock. 

No one takes responsibility for the core and the whole. One reason for dividing the country into different electricity areas was that the price differences would give the market incentive to build much more wind power in southern Sweden. This has not happened because the local resistance to wind power is great in the more densely populated southern half of the country. Appeals and municipal vetoes put an end. 

 

The defense is another sticking point. Therefore, most of the wind power is built in northern Sweden, far from where it is most needed.

 

Sticks in the wheel 

 

Then there is an extra big demand that there is a large capacity to transfer electricity from the north to the south of Sweden. 

 

But then the responsibility suddenly lies with the authority Svenska kraftnät, which failed to expand the main grid at a fast enough pace. 

 

I get somewhat vague answers as to why.

 

- It is difficult to speed up the long lead times, says Niclas Damsgaard, chief strategist at Svenska kraftnät. But we are doing everything to reduce the time from 14 years to seven years. 

 

These include permits, appeals, too low compensation for those whose land is claimed. And that those responsible were too late to the ball.

 

What one wonders is how it cannot be seen as a vital national interest to expand the trunk network at record speed. Today, a series of special interests can put sticks in the wheel. Local landowners, municipalities and others. 

 

Most days, Sweden produces enough electricity to be self-sufficient, but since the transmission capacity is not enough, shortages still occur. 

 

Nuclear power was once built in southern Sweden to give the country a reliable supply of energy. But political decisions pulled the rug out from nuclear power instead of extending the life of already existing nuclear power plants. 

 

Half of the Swedish nuclear power plants have been closed without first ensuring that there are alternatives that provide reliable access to energy. 

 

Equation that doesn't add up 

 

This is happening at the same time that society must implement a green transition that will greatly increase electricity consumption. But how will people be persuaded to buy an expensive electric car if it will also be more expensive to charge it than to drive the old petrol car? 

 

The equation doesn't add up. 

 

Only the state and government can take overall responsibility for the energy supply, but instead of broadly settling Swedish energy policy, the parties have for a long time been stuck in paralyzing ideological bickering. 

 

In other words, it is not only Putin's war that is behind the high Swedish electricity prices, but also political neglect. But it is the citizens who have to pay the price. 

 

We are now in a situation where extreme electricity prices threaten not only this winter but for several years to come. 

 

An IT investor at the seminar suggests during a break that the best thing is to "rip off the band-aid", let the market rule and leave people with their monthly bills of tens of thousands of kroner so that they implement energy efficiency improvements on their houses. 

 

But I fear that the wound is so large that the patient is at risk of bleeding if the plaster is pulled off hastily. 

 

Cheapest 

 

I already wrote it a few weeks ago but it deserves to be repeated. 

 

We are facing a pandemic-like situation, although the problem this time is not a virus but extreme electricity prices in a dysfunctional market.

The question is what will be cheapest for society. Providing enough support so that families don't have to leave their homes and thousands of businesses can avoid bankruptcy. 

Or to take the cost in the form of greatly reduced growth, tens of thousands of unemployed, reduced tax revenues and perhaps a housing crash. 

One way or another, the bill still ends up with society.