After a fall with low prices – in October the system price averaged 27 öre/kWh – the same trend is expected to continue. However, short periods of cold weather can lead to temporary price increases, especially when wind power production is low.
“We generally expect low electricity prices this winter thanks to a balanced energy system. But a week of severe cold and weak wind power can quickly push up prices,” says Johan Sigvardsson, electricity market analyst at Bixia.
Sigvardsson points out how Sweden’s and Europe’s electricity markets are interconnected:
“If electricity prices in Europe rise due to cold weather and low production, we export our electricity, which drives up our prices. At the same time, we are affected if we are forced to import expensive electricity.”
Electricity price forecast winter 2024-2025 (previous year in parentheses):
| Month | System Price | SE1 | SE2 | SE3 | SE4 |
|———-|————–|———|———|———|———|
| December | 65 öre/kWh | 40 öre | 40 öre | 77 öre | 82 öre |
| January | 67 öre/kWh | 39 öre | 39 öre | 78 öre | 79 öre |
| February | 71 öre/kWh | 43 öre | 43 öre | 76 öre | 83 öre |
As we delve deeper into the complex web of the electricity market, it becomes evident that the dynamics at play are intricate and interconnected. The ebb and flow of prices are not solely determined by local factors, but are influenced by a myriad of external variables that span across borders and regions.
The concept of energy balance emerges as a crucial factor in understanding the fluctuations in electricity prices. A delicately balanced system can withstand the pressures of demand and supply, keeping prices stable even in the face of external shocks. However, the slightest disruption, such as a week of severe cold or weak wind power, can send ripples through the market, causing prices to surge.
The symbiotic relationship between Sweden and Europe in the realm of electricity trading is a fascinating study in interconnectedness. The movement of electricity across borders in response to price differentials creates a dynamic marketplace where supply and demand are constantly in flux. The import and export of electricity serve as a mechanism for price convergence, ensuring that imbalances are swiftly rectified.
Looking ahead to the winter of 2024-2025, the forecasted electricity prices paint a picture of stability tempered with uncertainty. While the overall trend points towards low prices, the looming specter of extreme weather events casts a shadow of unpredictability. The potential for sudden spikes in prices during periods of cold weather underscores the fragility of the electricity market and the importance of robust infrastructure to withstand external shocks.
In conclusion, the intricate dance of supply and demand, coupled with the delicate balance of energy systems, shapes the landscape of the electricity market. As we navigate the complexities of price fluctuations and external factors, it becomes clear that a holistic understanding of the interconnected nature of electricity trading is essential for successful navigation in this ever-evolving industry.