Sweden Faces Winter Electricity Shortage Amid Strategic Reserve Procurement Failure

Sweden is confronting a significant risk of electricity shortages this winter following the failure to secure a strategic electricity reserve due to EU price cap regulations. Svenska Kraftnät, the state grid operator, attempted to procure up to 800 MW of strategic reserve to ensure power supply during peak winter demand. However, all bids exceeded the price ceiling set by EU state aid rules, forcing cancellation of the procurement and leaving the country without this critical backup for the coming winter (90270, 90283).

The strategic reserve, which replaced the previous oil-fired reserve plant in Karlshamn, expired after last season, and no new contract has been finalized. Malin Stridh, head of department at Svenska Kraftnät, emphasized that the current regulations make it almost impossible to procure such reserves not only this winter but also going forward. Svenska Kraftnät plans to collaborate with the government and the Energy Market Inspectorate to seek regulatory changes to allow future procurement (90283).

Pontus de Maré, operations manager at Svenska Kraftnät, described the situation as "very challenging," underscoring that there is no alternative to the strategic reserve for managing power shortages. He highlighted two scenarios potentially triggering outages: a harsh European cold spell with low wind power production, or unexpected disruptions such as nuclear reactor failures or grid outages (90270, 90283).

While historically no manual power cuts have been necessary since 2012, the absence of a reserve combined with these risks raises concern. Higher electricity prices are expected, which might encourage consumers and companies to reduce usage. Nevertheless, if demand outstrips supply, Svenska Kraftnät may have to enforce manual power outages as a last resort to protect the grid (90270, 90283).