Norrland power grid in desperate need of expansion

Svenska Kraftnät has issued an urgent call for dramatic increase in northern Swedish power production to avert a crisis. The new 10-year plan demands massive power grid investments and a substantial hydrogen initiative.

Svenska kraftnät's ten year plan

Svenska kraftnät's ten year plan

Foto: Johan Hallnäs

Ekonomi2023-12-05 09:00

– We're talking about extremely large volumes. We have to start now, says Daniel Gustafsson, head of division at Svenska Kraftnät, referring to the required new power production. Svenska Kraftnät is a government company responsible for the operation, maintenance, and expansion of the Swedish power grid.

Gustafsson estimates that production will have to increase by the equivalent of one new large nuclear reactor per year.

20 billion kronor per year

This increase is necessary to meet the expected growth in consumption - from around 150 terawatt hours today to around 235 terawatt hours by 2035. In addition, about half of today's production facilities - 75 terawatt hours - will need to be replaced as they are phased out during this period.

In addition to this major increase in new power generation, Svenska Kraftnät anticipates a need for 150,000 new power lines and about 30 new substations, which will be built at the same time as 250,000 kilometers of existing power lines and about 100 substations undergo "renewal".

To achieve this, grid investments will have to increase from the current 5 billion kronor per year to around 20 billion kronor per year by 2030, according to the ten-year plan.

– That's a very significant increase, says Gustafsson.

Gustafsson doesn't believe that ordinary electricity consumers will notice the substantial increase in investment in the transmission network. Financing will come from network charges on electricity bills, but also to a large extent from so-called bottleneck charges - the money Svenska Kraftnät collects when it exploits price differences caused by congestion in electricity transmission between different areas.

Expensive power without expansion

But if power production doesn't expand as planned, the consequences could be much worse, he warns.

If there is a shortage of power, there will be an increase in the price of electricity. The nightmare scenario is that the whole of Sweden experiences a power shortage, which Gustafsson says could lead to an industrial crisis in northern Sweden.

– Then it won't just be domestic users that have to pay. The profitability of the green transition will be questioned. If electricity becomes too expensive, industry won't invest, because they need to make money to make these investments worthwhile, he says.

Hydrogen production and a new infrastructure to distribute hydrogen to industrial projects in the north - which is already being planned - are highlighted as crucial pieces of the puzzle to make the plan work.

Hydrogen is a much more efficient energy carrier than electricity. You can move a lot of energy from one place to another with relatively little environmental impact. One relatively small pipeline replaces many large power lines, says Gustafsson.
Must be in place by 2030

Hydrogen can be produced at existing or new power plants and then transported in largely underground pipelines. It doesn't really matter which energy source drives production.

– The technology exists but needs to be developed. The challenges are to make it profitable and to avoid excessive energy losses when converting electricity to hydrogen, says Gustafsson.

Safety issues, financing, and responsibility for planning hydrogen projects are still unresolved. And even when it comes to hydrogen, the clock is ticking, according to Gustafsson:

– I think we will have to have this production in place by around 2030. Then the real need for hydrogen production may be around 2035.

In a nutshell

For Svenska Kraftnät to meet future energy demand, substantial expansion of the transmission network is essential, including 150 kilometers of new power lines, approximately 30 new power substations, and the renewal of 250 kilometers of existing lines and about 100 substations. 

This expansion will require a financial increase in network investments, from approximately 5 billion kronor per year to around 20 billion kronor per year by 2035.

Source: Svenska Kraftnät