How the Swedish power market works.

It is produced in power plants, carried by the grid and traded on the exchange before a supplier sells it on to you. In 2024 Sweden produced around 169 TWh, mainly from hydro, nuclear and wind.

The power system must be in balance every second. What is produced must match what is used, and the grid frequency is kept around 50 hertz. Svenska kraftnät is responsible for the balance and procures reserves that can raise or lower production and consumption at short notice.

The grid operator has a monopoly in its area and cannot be chosen. You can, however, freely choose your supplier and type of contract. For a business, the cost of electricity therefore has two parts: the power itself from the supplier and the transmission from the grid operator.

The price is set on the exchange the day before delivery. Buyers and sellers submit their bids by noon the day before, and producers bid from cheapest to most expensive. Once demand is covered, the last bid needed sets the price for everyone.

When demand is low, cheap production such as hydro and wind is enough. When it is high, or when there is little wind, more expensive production is needed and the price rises for all power in that period. Since 1 October 2025 a new price is set for every quarter hour.

That is why the price can vary a lot within a single day. In the morning and early evening, when consumption peaks, the price is often higher than in the middle of the day and at night. For a business that uses power evenly around the clock, the swings feed straight into the cost of electricity.

Since 1 November 2011 Sweden has been divided into four bidding zones, from SE1 in the north to SE4 in the south. The borders run where transmission capacity in the grid is limited.

The division was introduced after the European Commission questioned Svenska kraftnät limiting exports of power to keep prices down in Sweden. With bidding zones, the lack of transmission shows up in the price instead, and the price shows where more production and more lines are needed.

When the lines between north and south are full, prices can differ between the zones. Southern Sweden is also more closely connected to the more expensive continental market, and its own production has fallen since the reactors at Barsebäck and four of the reactors at Oskarshamn and Ringhals were closed. That is why prices in SE3 and SE4 are often higher.

Between 1 January and 8 October 2026 the spot price in SE4 averaged 97 öre per kWh, against 77 öre in SE3. That is just over 25 percent higher, and SE4 was more expensive than SE3 in 77 percent of the year’s hours.

Sweden has interconnectors to Norway, Finland, Denmark, Germany, Poland and Lithuania. Power flows to where the price is highest, which pulls prices towards each other.

In many European countries gas power often sets the price. When gas prices rose sharply during the 2022 energy crisis, power prices in southern Sweden reached record levels.

The connections have benefits. When it is windy Sweden can export power, and when its own production is not enough power can be imported. But they also mean that the price in southern Sweden often follows the price level in the neighbouring countries to the south.

Sweden is to reach net zero greenhouse gas emissions by 2045. That requires industry and transport to switch to electricity: fossil-free steel, battery factories, hydrogen, electric cars and data centres.

In 2024 Sweden used 136 TWh of electricity. The power system is to be planned for at least 300 TWh in 2045. Svenska kraftnät expects consumption to rise significantly, but lowered its forecast slightly in June 2026.

Electricity use has stayed at roughly the same level for several decades. What is new is that large industrial projects and the electrification of transport need a lot of power in a short time, often in places where the grid is already under strain.

A new transmission line can take 10–15 years to put in place, and only about a tenth of that time is the actual construction. The rest goes on planning, permits and appeals.

Onshore wind also requires the municipality’s approval, and many projects stop at that step. In many parts of the country there is also a queue to connect larger plants, and the grid operator may need to expand the grid before a new park or factory can be connected.

That makes it increasingly important to use areas that are already affected, such as landfills, ponds, quarries and industrial land. There are fewer land conflicts there, and a grid connection is often already nearby.

With a spot price you follow the exchange, peaks and troughs alike. A fixed price gives predictability, but reflects the market on the day you sign. With price hedging through new production you get a stable price and help new renewable power get built.

Guarantees of origin show which energy source the power comes from, but do not guarantee that new production is built. One guarantee of origin corresponds to one megawatt hour and is issued by the Swedish Energy Agency.

More and more companies also need to report where their electricity comes from. Under the GHG Protocol, emissions from purchased electricity are reported both on the basis of the grid mix and on the basis of the company’s contracts and guarantees of origin. A long-term power purchase agreement linked to a specific park also shows that the purchase contributes to new production.