Electricity prices in Sweden are expected to rise sharply this autumn

In September, the electricity price has sometimes recorded record levels of around nine kroner per kilowatt hour in the southernmost part of Sweden - for a single quarter. The average price has been significantly lower than that, but still at clearly higher levels than last year.

There are several explanations for that. The price of natural gas has more than doubled in a year as a result of the US-Iran conflict, which is having a major impact on European electricity prices. The lack of rainfall during the year has also led to the water levels in the Swedish and Norwegian reservoirs being clearly lower than normal.

- Nordic hydropower is like an airbag against continental prices. But because it has been extremely dry, the producers are forced to hold back, says Johan Sigvardsson, analyst at the electricity company Bixia.

His latest forecast for electricity prices in the period October-December points to more than a doubling compared to the same period last year. Compared to 2024, it is about three times as high electricity prices.

In southern Sweden (electricity area four) the average price is expected to be 140 öre per kilowatt hour, while in northern Sweden (electricity area one and two) it is just under 70 öre.

Even though it is an increase, it is about lower prices than in 2022, when many Swedes got a shock when they opened their winter electricity bills.

- From a European perspective, we are far from the crisis levels we had then. If gas today costs around 80 euros per megawatt hour, then in the fall of 2022 it was on average about 300 euros, says Johan Sigvardsson.

In recent days, the market price of gas has fallen due to new talks between the US and Iran described as productive by the US president.

- It helps to lower the base level for electricity prices on the continent, and it also makes it easier for us because we are connected to them, says Magnus Thorstensson, analyst at the industry organization Energiföretagen.

At the same time, he points out that the daily prices are affected by other factors – for example how much it winds and how much the sun shines. It is not certain that the market's expectations will be fully met.

- We have higher gas prices and worse hydrology than last winter. All that points to higher prices. Then where it ends up is another matter, says Magnus Thorstensson.

Another factor is how cold the autumn and winter months get. The colder it gets, the higher the consumption, which also raises the prices.

- A windy and rainy autumn in the right place is better for electricity prices than if it is cold and windless. Not fun for those who want to ski and enjoy the forest, but you can't have everything, says Magnus Thorstensson.

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