Sweden’s government promised on Wednesday to pay out up to 60 billion kronor ($5.76 billion) in compensation to individuals and businesses for rising electricity costs as a result of the Ukraine war.
According to Prime Minister Magdalena Andersson, at least half of the money would go to people who could anticipate receiving compensation “this winter.”
The cost of gas and electricity is at an all-time high, she claimed.
In southern Sweden, the price of power on the Nordpool market on Wednesday reached a record 5.69 kronor per kilowatt hour. On Thursday, a modest decline to 5.50 kronor was anticipated.
Sweden’s electricity costs have increased as a result of Russia’s severe reduction in gas exports to Europe as a result of its invasion of Ukraine.
As a result, gas prices have increased at a time when little wind energy is being produced in northern Europe due to the present weather.
Because of the rising so-called capacity fees, Svenska Kraftnat, the state-owned operator of the national grid, has a surplus despite making significant expenditures in its grid, according to Andersson.
Andersson added: “The higher the power price increases, the higher the quantities we’re talking about.” This surplus “should make its way back to consumers.”
Sweden, which also depends on nuclear and wind energy, generates nearly half of its electricity through hydropower.
The government stated that remedies might include decreased electricity prices as well as direct reimbursements to individuals and businesses, though it is currently unknown what shape the compensation would take or when it would be implemented.
Svenska Kraftnat has been charged by the government with creating a detailed proposal by November 15.
The declaration of the Social Democratic government comes barely three weeks before legislative elections, during which time opinion polls have the left and right blocs tied for first place.