Lowering prices in a hurry – how the Swedish energy discussion was transformed

Markus Wråke, CEO Energiforsk.

At the start of 2022, the focus of Swedish energy discussions was on increasing the levels of electricity production. By the end of the year, saving electricity was on everyone’s lips. A contributing factor to this evolution was the report titled Lowering prices in a hurry – Electricity Prices in the Wake of Russia’s Invasion of Ukraine, from Mistra Electrification, which caused leading politicians to alter their rhetoric.

– The report received extensive media coverage and gained a lot of traction in the political debate. The analysis showed that a decreased electricity demand not only lowers the number of kilowatt hours of electricity used, but also drastically lowers market prices, says Markus Wråke, CEO of Energiforsk.

The report Lowering prices in a hurry – Electricity Prices in the Wake of Russia’s Invasion of Ukraine showed that a 10% decrease in electricity demand in Europe would slash electricity prices in southern Sweden during the winter by some SEK 1.7 per kWh, or 50%. If the electricity demand in southern Sweden were to decrease by only 5%, prices would decrease by SEK 0.4 per kWh.

– I think the clear message that was delivered regarding the value of collective action and the very high policy relevance were the major reasons why the report had such a powerful impact. Leading politicians started talking about the importance of saving electricity in a way that we had not heard before. Over the following months, we saw large energy savings among Swedish consumers, and although there are of course many reasons for that, especially the high prices, I believe that our report played an important part in this change in Swedish Society, says Markus Wråke.

The report was published on the September 18th, a few days after the EU Commission set the goal of reducing demand for electricity by 10%.

– While our timing was extraordinary, the most important thing was that we showed how large an effect reduced demand has on electricity prices. The media coverage really was something else. I and other authors appeared on national television and radio and the study led to hundreds of articles in the press, says Markus Wråke.

He believes that the media coverage contributed to a change in the Swedish energy discussion.

– Before this, politicians refrained from mentioning energy savings and the positive effects of using energy as wisely as possible. They were afraid of being perceived as reactionary. So, during the spring, politicians could say “in Sweden we vacuum our homes whenever we want”, whereas during the autumn they could say “it is important that we are cautious when and how we use electricity”, comments Markus Wråke.

What have you learned from this?
– A key takeaway is the positive impacts that neutral and science-based analyses can have on the public debate. Moreover, I feel that we have strong support from Mistra that Mistra Electrification can and should participate in the public debate. The importance of that support is difficult to overestimate, says Markus Wråke.

Lowering prices in a hurry – Electricity Prices in the Wake of Russia’s Invasion of Ukraine can be found here.