This blame game is all about supporting current political narratives about nuclear power etc. It's not really about the energy crisis.
Sweden's energy mess is all about 'free markets'. Back in the old days the state-run energy companies in Sweden produced an overabundance of electricity, mostly from hydro, making Sweden one of the cheapest electricity countries in the world. It was really common to replace wood burners with direct electric radiators in old houses across Sweden.
Then the British conservative party (equiv to the current Swedish administration who the article is about), heavily into privatisation, started selling the public utilities. One thing they did was split network ownership from supplier, so you have one company owning trains and another owning track, and the same for electric net vs generation etc. This created a kind of artificial market, because you can't actually choose with your feet what company has power lines to your house etc. So they invented energy markets and mock auctions and things.
Of course in hindsight all those privatisation thingies are no longer popular. But at the time the rest of Europe thought 'oh that's a good idea!'
Within Sweden the electricity is generally generated in the north and consumed in the south and the socialist governments with their nationalised utilitieshad a fixed cost in the whole country.
Interestingly it was the Danes who complained because they border the south of Sweden and can't generate electricity nearly so cheaply so the cheap cost of Swedish electricity was 'unfair competition'. In 2011 the Swedes had to scrap their fixed one-price policy and introduce 'energy zones' that get increasingly more expensive as you approach Denmark.
Fast forward to today and we have Sweden producing more energy than it consumes, but the utility companies get more money from selling that abroad than at home, meaning the Swedes have to buy their electricity from abroad! We basically logically from a market perspective have electricty flowing out of Sweden to be sold by the utility companies and then back into Sweden to be consumed by households.
And we wonder why there is another winter fuel price shock warning in the offing!
Sounds exactly like Norway. In a sense I don't mind us making billions of selling our electricity to the rest of Europe. Problem is how it's increased prices domestically as well. So government makes billions, people suffer. Most people thus wants to "cut the cables" overseas, but I think a better arrangement would be to share the profits. Which we currently mostly do for homes, by having a subsidized max price, but energy-consuming industry is struggling.
> This blame game is all about supporting current political narratives about nuclear power etc. It's not really about the energy crisis.
In Norway there's a push for nuclear, but I also feel some of it is not honestly about solving anything related to energy. A vocal (minority I hope?) is mostly muddling the water as they're against anything green, so they know this will just stall other things for decades while things are being planned. Or they're against windmills and thus try to push this instead. It's a weird debate, where I certainly can see why nuclear is beneficial or why some people are against, but many of the arguments aren't in good faith.
Electricity free market actions use a strange pricing scheme. Net puts out request for X amount of electricity. Providers bid. Then everybody in gets paid same price as the highest bid that made it in.
Cables connecting zones (or countries) are limited and move only part of the cheap electricity bids to the next zone. Thus more expensive bids make it raising the price. And there's a cascading effect how cheap energy gradually gets more expensive.
There's a live europe-wide electricity price map showing network events as well. It's very interesting to see how prices grade. And how big difference shows on one side if some connection between regions is down.
Local example here in Lithuania. We have quite fragile connection to Poland which seem to require a lot of maintenance for some reason. If Germany's renewables are doing good and link goes down, our energy prices go up. But if renewables are off and Scandinavian hydros are doing great, then same link going down means very cheap energy here...
Denmark didn't complain about cheap electricity, they complained that Sweden limited electricity export at times when the demand outstripped supply domestically. By creating 'energy zones', Sweden was able to decrease demand for electricity in parts of Sweden instead of cutting exports.
The national electricity transmission network in Sweden is still a public utility so the cause for the imbalances in the Swedish electrical grid is not due to privatizations but rather political decisions such as not investing sufficiently in transmission capacity, shutting down nuclear power plants and making it difficult to get approval for wind energy etc.
We can use the privatisation of water in the UK as a case study.
The water companies in regions across the UK were privatised.
Lots of big international companies borrowed lots of money to buy these companies.
The water companies then borrowed large amounts of money, secured against their ability to extract rent from their customers, and the owners used that money to pay of the debt they had incurred in buying the water company, and also paid it as dividends.
So basically the debt burden moved from the buyers to the company they had brought. Neat!
Now a couple of decades later you have these water companies with silly amounts of debt, the technical debt of not maintaining and investing in the infrastructure (they keep blaming the Victorians, but that is just blame spin) and an owner who would be happy to cut ties and let the water company flounder to be rescued by the taxpayer...
You are derailing my question above with a whataboutism here and I am being downvoted for pointing that out.
There are problems with a lot of things in the world, for instance the rentier economy you mention here. But I don't owe anyone a solution to that just because I want to know which privatisations are the cause of the Swedish energy production and price crisis.
Can anyone name a public utility that was privatised in western Europe and for which a clear case can be made that it was a good thing to do (from the perspective of the country and the public)?
It's the same situation as Norway. We also have a lot of hydro electricity, but the politicians decided to join the European energy market, and the prices have gone through the roof.
I don't understand why the Germans closed down nuclear power plants without also building a viable alternative. There are lots of people in Sweden and Norway that don't have a lot of money, and have to skip showers and live in the cold because they can't afford to spend more on electricity.
We were promised a balanced market where the cables would be used to cover temporary spikes and drops in power production. Now it seems that we are subsidising bad German politics instead, and they have not delivered on their part of the deal.
Renewable energy with large scale gas power plants (and lots of other types of storage/temporary energy sources and coal for now).
It's just that energy is cheap when renewables are strong and high when they are not (and have to be filled with gas (green in the future), nuclear and coal, which is expensive and partly will be even more expensive in the future, thanks to CO2 pricing (which is good).
> I don't understand why the Germans closed down nuclear power plants without also building a viable alternative. There are lots of people in Sweden and Norway that don't have a lot of money, and have to skip showers and live in the cold because they can't afford to spend more on electricity.
That is what you get when strategical choices are done by ideology and not based on scientific facts.
Germany has a lot tchernobyl-traumatized boomers still associating anything tagged "nuclear" to the doom days from the cold war. These are a significant part of the electorate, specially among the Grunens.
The decision of phasing out nuclear was not rational nor strategical, it was a political choice to please a minority of voters.
Sweden's energy mess is all about 'free markets'. Back in the old days the state-run energy companies in Sweden produced an overabundance of electricity, mostly from hydro, making Sweden one of the cheapest electricity countries in the world. It was really common to replace wood burners with direct electric radiators in old houses across Sweden.
Then the British conservative party (equiv to the current Swedish administration who the article is about), heavily into privatisation, started selling the public utilities. One thing they did was split network ownership from supplier, so you have one company owning trains and another owning track, and the same for electric net vs generation etc. This created a kind of artificial market, because you can't actually choose with your feet what company has power lines to your house etc. So they invented energy markets and mock auctions and things.
Of course in hindsight all those privatisation thingies are no longer popular. But at the time the rest of Europe thought 'oh that's a good idea!'
Within Sweden the electricity is generally generated in the north and consumed in the south and the socialist governments with their nationalised utilitieshad a fixed cost in the whole country.
Interestingly it was the Danes who complained because they border the south of Sweden and can't generate electricity nearly so cheaply so the cheap cost of Swedish electricity was 'unfair competition'. In 2011 the Swedes had to scrap their fixed one-price policy and introduce 'energy zones' that get increasingly more expensive as you approach Denmark.
Fast forward to today and we have Sweden producing more energy than it consumes, but the utility companies get more money from selling that abroad than at home, meaning the Swedes have to buy their electricity from abroad! We basically logically from a market perspective have electricty flowing out of Sweden to be sold by the utility companies and then back into Sweden to be consumed by households.
And we wonder why there is another winter fuel price shock warning in the offing!