Electricity Prices Surge in Northern Sweden Amid Cold, Low Water and New Finland Link

Northern Sweden is experiencing an unprecedented rise in electricity prices this January 2026, attributed to a combination of extreme cold weather, low water levels affecting hydroelectric power, and the recent activation of the Aurorakabel linking Sweden to Finland. Typically, electricity costs are lower in the north, but current prices have reached 1.60 kronor per kWh, surpassing southern Sweden’s 1.50 kronor per kWh, marking a rare reversal.

Christian Holtz, an electricity market analyst, highlights that the Aurorakabel has connected northern Sweden’s grid with Finland’s higher-priced market, pushing local prices upward. In January, prices have surged 50% above forecasts made in December, with some peaks exceeding two kronor per kWh—levels seldom seen before. Holtz warns that the limited hydroelectric reservoir levels and poor hydrological balance could sustain these high prices for weeks or even months.

Johan Sigvardsson from the energy company Bixia agrees, stating that the high prices are expected to persist through the summer due to water reservoir deficits. Analysts also predict a potential further increase if industrial activity intensifies in northern Sweden. Forecasts for the first quarter of 2024 estimate electricity prices ranging between 70 öre and 1.10 kronor per kWh nationwide, with the highest costs in the south, contrasting with the current northern premium.

This unusual situation sheds light on the vulnerabilities of Sweden’s electricity supply amid harsh weather and infrastructure changes, presenting challenges for consumers and industry alike.