Experts Warn of Higher Electricity Prices This Winter Amid Gas Market Strain and Hydropower Limits

As Sweden approaches the winter of 2025, concerns are rising about potential electricity price increases due to multiple market pressures. The European gas market remains strained, a key factor in the energy outlook, compounded by hydropower bottlenecks across northern Sweden and Norway, according to expert Christian Holtz from Merlin & Metis. Holtz cautions that electricity prices could surpass last winter’s levels, though he stops short of issuing a dire warning. Notably, he points out that the government's electricity price cap, which limits prices exceeding 1.50 SEK per kilowatt-hour to protect consumers, is unlikely to be triggered this winter. This cap, which could cost the government roughly one billion SEK, has seen limited activation historically, occurring most recently in northern Sweden only once since 2021. Still, the risks are not to be dismissed. Gas storage levels are currently below normal, contributing to uncertainty, while potential unplanned outages in nuclear power generation during cold periods could further strain supply and elevate prices. Holtz highlighted variability across regions, noting that southern Sweden experienced elevated prices for longer periods in 2022 compared to other areas. These layered challenges signal how linked infrastructure issues and energy sources could influence the affordability and availability of electricity during the upcoming winter season.