Sweden Forecasts Power Crunch as New Plants Lag Soaring Demand

Lars Paulsson, Bloomberg News

The Rosenlundsverket combined heat and power plant, operated by Goteborg Energi AB, in Gothenburg, Sweden, on Thursday, Jan. 13, 2022. The Swedish government set aside 6 billion kronor ($664 million) to lessen the impact of soaring power bills on households, saying Russia’s approach to supplying gas to Europe this winter was a major factor in stoking costs last month. Photographer: Nora Lorek/Bloomberg , Bloomberg

(Bloomberg) -- Sweden is heading for a severe power crunch from the middle of this decade as new capacity won’t be sufficient to satisfy soaring consumption.

After a mild European winter helped avert a crisis last year, the biggest Nordic nation is facing a large deficit from 2025-2026 that can’t be met by increasing imports, grid operator Svenska Kraftnat AB said in a report on Thursday.

As the economy electrifies, industrial power demand is increasing at a faster rate than new capacity is coming online. The looming crisis raises the prospect of manual disconnections, the grid warned.

Southern Sweden is already in dire straits, after reactor shutdowns in recent years slashed available generation. Prime Minister Ulf Kristersson said in December it’s the area with the biggest power-supply shortfall in Europe.

“The biggest challenge with enough capacity is a few years away, the winter of 2025-2026,” said Lowina Lundstrom, head of division at the grid. “If the electrification of factory processes continue according to plan, we’ll have a negative effect balance of 4,900 megawatt-hours/hour during a normal winter.”

That deficit is projected to widen further the following winter, the grid said.

Last winter, the hour with peak demand — between 9 a.m. and 10 a.m. on Dec. 16 — coincided with outages at two nuclear reactors. The only reason that shortages didn’t occur was the unusually low consumption as soaring prices forced consumers to save energy, the grid said.