“Energy prices will rise in the Nordics”

A word from our specialist

What are the conditions on the Nordic energy market right now?

Historically, electricity prices have been very low Nordic wide, but for a few years now, they’ve been converging on the energy prices in the rest of Europe. Sweden is awaiting a Parliamentary decision on third-party access to the district heating network, which will offer other players the opportunity to operate as suppliers. At present, it’s hard to say whether this would alter the cost of district heating, but we’ll probably get a better functioning market enabling improved utilization of available energy.

What will happen to energy prices in future?

I’m fairly convinced that energy prices in the Nordics will rise, further converging on European levels. At present, there are no long-term sustainable solutions to the energy shortage. Germany’s decision to decommission its nuclear power before 2022 will obviously affect the pricing of electricity. In addition, there is substantial global pressure for political measures to limit our total CO2 emissions. Maybe those subsidies in place today through relatively low power taxation for industry will alter to achieve a tax shift towards more environmentally friendly alternatives.

When will the energy shortage become a problem—and who will be most affected?

The combination of the energy shortage and growing pressure on environmental issues is unbelievable at present—and is only going to increase. Gazing into my crystal ball, I expect electricity prices to rise gradually at around the same rate as in the past 10 years, which is at over 10% a year. Increasing electricity costs are naturally something all of us will feel, but obviously, energy-intensive businesses especially.

Have you got any general advice?

At an individual level, my simplest advice is to ensure you clarify energy consumption and reduce it in simple ways, like shutting down your computer when you leave work, switching off lights when you don’t need them, and not keeping premises unnecessarily warm or cool.

Indoor temperatures should be around 20° C in winter and 22-24° C in summer. The biggest saving is the kilowatt-hour you never use.

All businesses or public bodies should think about the consequences increased energy costs and potential green taxes will have. For operations with high energy consumption, making a thorough re-evaluation of energy situations, creating a plan, setting goals and implementing measures systematically are important.

At present, where’s the big potential for saving energy?

One example where there’s general room for improvement is in process industries. At present, responsibility for energy supply and energy issues is often shared between operating activities (production processes) and real estate, which results in sub-optimization. I’m convinced that energy consumption can be cut quite sharply if we take an overall grasp and utilize all primary energy optimally, i.e. if we use the energy we purchase optimally. This is about recycling all waste energy, but also getting the maximum utilization of all the energy arising in production.

Want to talk more about energy issues?

Please contact Peter Westhammar.