Svenskarna verkar ha insett allvaret före politikerna. Om inget drastiskt görs kan prisexplosionen på el spilla över till en finansiell kris med konkurser och arbetslöshet.
Märkliga saker händer just nu i Sverige. Det googlas på elavtal, pratas kaminer, vedbrist, kallställda hus. En vanlig middagskonversation låter som Svenska Preppersföreningens årsmöte.
Of:
Andreas Cervenka
Published: Today 13.03
Updated: Today 13.50
Electricity prices
The Swedes seem to have realized the seriousness before the politicians. If nothing drastic is done, the explosion in electricity prices could spill over into a financial crisis with bankruptcies and unemployment.
Strange things are happening in Sweden right now. Electricity contracts are googled, stoves, wood shortages, cold houses are discussed. A normal dinner conversation sounds like the annual meeting of the Swedish Prepper Association.
Sweden's largest tomato producer is suspending its winter cultivation due to the high electricity prices. Paper mills stand still. Food companies are warning that companies are on their knees and we are only at the beginning of September.
A look at the numbers explains the drama.
The Stockholm Chamber of Commerce has calculated that home owners in electricity area 3, including Stockholm, will have electricity bills of SEK 85,000 during October to March, including grid fees, tax and VAT. In area 4, i.e. southern Sweden, up to SEK 95,000.
How big a bang are we talking about?
In Sweden, there are just under 2 million villas according to the Central Statistics Office.
About 1.1 million are in electricity area 3 and just under 550,000 in area 4.
If the forecast holds true, it would mean a combined electricity bill for these 1.7 million households of just over SEK 145 billion.
For half a year.
That is more than twice as much as the entire Swedish population paid in interest on their mortgages last year.
Or almost as much as the population spent on clothes and alcohol. Together.
It is unsustainable.
And this figure does not include the electricity costs for the rest of the country who live in an apartment.
Sweden consumed a total of 140 TWh in 2021 according to the Energy Agency.
A kroner higher electricity price per kWh means 140 billion in increased expenses.
According to the Energy Markets Agency, the average price in 2021 was 67 and 82 öre per kWh for electricity areas 3 and 4, respectively.
According to the site Elpriser24, trading with so-called futures indicates that the price for 2023 will land at SEK 2.34 and SEK 3.86 per kWh. It is therefore about a significantly stronger rise than for interest rates. And hundreds of billions in higher energy costs.
These are very rough calculations, the prices can of course be both lower and higher.
But in the worst case, the rising electricity prices risk becoming even more noticeable than the so-called interest rate wedge. Which in itself is quite troublesome, with upwards of 100 billion in increased costs for households if the mortgage rate reaches 4 percent.
And the higher the electricity bills become, the more the Riksbank will want to raise the interest rate to bring down inflation.
For households with small margins, it can be tough. According to Statistics Norway, every fifth person in Sweden cannot handle an unexpected expense of SEK 12,000.
In winter, it corresponds to a single month's electricity bill.
At the Kronofogden, the pile of unpaid electricity debts is already growing by 20 percent.
Niche banks that deal with more expensive consumer loans increased their lending significantly in the first half of the year, TF Bank by 32 percent, Collector by 17 percent and Resurs Bank by 11 percent.
In Great Britain, a consulting company predicts that the energy crisis will hit households harder than the financial crash in 2008, writes the Bloomberg news agency.
The problem for Sweden is also that large parts of the business world are dependent on electricity, of the country's total electricity consumption in 2021, industry accounted for approximately 35 percent.
That factories are already pausing production is ominous.
To DI, the analyst Christian Kopfer says that the rising energy prices risk knocking out the legs of large parts of the basic industry in Europe, which will become bankrupt.
Even if Swedish companies are doing better thanks to the low electricity prices in northern Sweden, we are not safe.
This is how it is connected: rising expenses cause households to cut back on consumption, which puts pressure on companies, which are also affected by rising electricity prices and interest rates. Closures and bankruptcies increase unemployment. It also triggers credit losses at the banks. This causes them to become more cautious about lending money, which further lowers activity in the economy. And so on.
For over ten years, rising interest rates have been pointed out as what could trigger a financial crisis in Sweden, now electricity prices are rising as a new threat.
In Europe, it is already reminiscent of 2008, when the states had to step in and save banks. Now it is energy companies that need support. The German state has been forced to push 200 billion to the giant Uniper to avoid collapse.
The CEO of oil giant Shell Ben van Beurden said the other day that Europe is facing several very tough winters and that rationing and energy savings will be required.
In Sweden, not a peep has been heard about this, despite researchers pointing out that reduced consumption is the fastest way to bring prices down.
In Sweden, the government has promised up to 90 billion in so-called high-cost protection for electricity. It mitigates the short-term effects, but is unlikely to be enough to quell Swedes' concerns or reduce demand for stoves. And of course it is not a long-term solution.
The energy issue is complicated, but as my colleague Lena Mellin pointed out recently, there have been very few answers during the election campaign.
A very simplified math looks like this. Sweden's electricity production consists largely of hydropower, nuclear power and wind with relatively low production costs. According to a report from the company Energiforsk, expansion of new production costs from 32 öre per kWh for onshore wind power to 79 öre for solar cells on villas.
What the politicians must answer is why the Swedes should then pay 3-4 kroner for their electricity, even for a short period. It is actually a political problem. Go ahead and solve it.
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