Germany closes its nuclear power plants – how Swedish electricity prices are affected

4/15/2023, 6:35:07 PM

Highlights: The last three nuclear reactors still in operation in Germany are being shut down. This means a substantial loss of electricity production. If we get a cold winter and it becomes difficult with gas deliveries to Europe, there is a risk of new electricity price shocks in Sweden as well, says Svenska kraftnät. The situation looks better for the coming winter than for the winter that has been, says Pontus de Maré, Operations Manager at Svenski Kraftnäts.

Now the last three nuclear reactors still in operation in Germany are being shut down. This means a substantial loss of electricity production. If we get a cold winter and it becomes difficult with gas deliveries to Europe, there is a risk of new electricity price shocks in Sweden as well, according to Svenska kraftnät.

After the meltdowns in Japan's Fukushima in 2011, Germany decided to phase out all its nuclear power. On Saturday, the last three reactors will be disconnected from the grid.

Does the German phase-out mean higher electricity prices and a greater risk of disconnection in Sweden?

"Three reactors play a role on the margin, but above all the German shutdown is of great importance for the electricity situation throughout northern Europe," says Pontus de Maré, Operations Manager at Svenska kraftnät.

Perhaps the most important factor is the availability of gas. Germany, like many other European countries dependent on gas, has tried to buy up large stocks, which saved the situation last winter.

Svenska kraftnät has now removed its warning that we in Sweden have a risk of disconnection of electricity, which indicates that the situation looks better for the coming winter than for the winter that has been.

More reactors in operation in Finland and France

In Sweden, Ringhals 4 once again reached full production during the Easter weekend, at the same time as wind power is being expanded. In Finland, the Oliklouto 3 nuclear power plant is now also starting up after many years of delays.

France is Europe's largest producer of electricity from nuclear power, but last year many reactors were shut down due to damage and maintenance work. Now, however, things are looking better, and if French nuclear power works as usual next winter, there will be significantly more electricity in Europe – electricity that Germany can also buy.

Another important factor is the availability of water. Last year was a dry year in Europe, which meant less electricity from hydropower than usual. Something that was noticeable in Norway, among other places, at the same time as it has been more of a normal year in Sweden.

And if you look at the electricity market's long-term contracts, which give an indication of how high electricity prices are expected to be in the future, things look better than before. At the same time, Ponus de Maré at Svenska kraftnät points out that the market has been wrong in its electricity price forecasts in the past.