Hitting the Germans: your 'green deal' is just price gouging, say Swedes

Sweden criticizes Berlin over energy price rises

Swedish Energy Minister Ebba Busch criticizes Germany's energy production and the country's decisions. She believes that the country's energy sector is not modern and sustainable. It should not be. Busch believes that Germany's energy production influences energy prices in neighboring countries and needs to change. She urges the country to move towards a more sustainable energy alternative.

"It is one thing for the Germans to give up nuclear power, but it is another thing for other countries to suffer because of their poor choices," says Busch^[1]. She proposes a compromise - investing European Union (EU) funds in sustainable resources, but not in fossil fuels as Germany is doing now.

Busch does not hide her fury. Germany, she says, is contributing to the rise in energy prices. She also criticizes other decisions made by this country. Germany has also refused to comply with the EU's calls to divide its country into different electricity price zones.

Introducing price zones in northern Germany would lower electricity prices

Despite its size, Germany offers a uniform electricity price throughout the country. Sweden is known to be used to setting prices according to place of residence. It is known that Acer, the EU's energy regulator, which aims to promote cooperation between national energy regulators and contribute to creating a competitive EU electricity and gas market, recommended that Berlin introduce a similar split as early as 2022, which is currently being discussed.

"<...> We would like Germany to introduce a price area in Northern Germany. This would significantly reduce the impact of high electricity prices," Busch said. In return for creating separate price zones, she said she would initiate a cable project between the two countries, which she vetoed in June.

"If Germany agrees to a price area, we could sit down and discuss the possibilities of the Hansa Power Bridge," the latter explained, proposing to reform the electricity market. The Hansa Power Bridge project is a 700-megawatt electricity cable linking southern Sweden to Germany. The move comes amid growing frustration over volatile energy prices and inefficiency. However, the project will be delayed until Germany gets its system in order.

Currently, the German electricity market structure leads to higher electricity prices in Sweden, especially in the south where energy prices fluctuate^[2]. 

Last week, prices in southern Sweden jumped to €1 per kilowatt-hour

Prices in south Sweden jumped to €1 per kilowatt-hour last week. 

The Swedish grid is already connected to Germany via a separate submarine link. However, regional price differences persist due to weak connection capacity. As a result, last week Gothenburg residents paid 190 times more for electricity than the northern city of Luleå. The Swedish business leader warned that the consequences will be even worse if these problems are not solved.

After the Fukushima incident in 2011, Berlin closed its nuclear facilities, increasing its dependence on imported electricity. Busch argued that Europe must switch to nuclear power. This would supposedly stabilize energy prices.

"No political will can override the basic rules of physics, not even Dr Robert Habeck," said Busch, referring to Germany's anti-nuclear energy minister of the Green Party^[3].

EU adopts new legislation and invests in new technologies 

Renewable energy reduces dependence on fossil fuels. However, they also create periods of peak wind and solar generation. This imbalance can affect volatile prices. "Acer has warned that grid costs could double by 2050, increasing energy prices. It is clear that as Europe grapples with volatile energy prices, the nuclear debate will remain crucial.

Indeed, the EU has been investing in developing renewable energies for several years. The EU's main targets and commitments are that 42.5% of energy consumption should come from renewable sources. This target is set within the framework of the European Green Deal, which aims to become a climate-neutral economy by 2050.

In addition to developing renewable energy sources, the EU aims to increase energy efficiency - which means using less energy to achieve the same goals. There is an increasing focus on wind, solar, geothermal, hydro and bio-based energy generation. Some countries leading the way in wind energy are Germany, Denmark, Spain, the Netherlands and Sweden. The Renewable Energy Directive requires each EU country to meet certain targets for renewable energy production and consumption. This is ostensibly to reduce dependence on Russian gas and oil.

However, the new energy course may present some challenges. 

Some countries that were previously dependent on fossil fuels (e.g. Poland) face greater challenges in the transition. In addition, the increasing share of wind and solar energy requires grid modernization to manage intermittent renewable energy supply.