In southern Sweden, the situation caused by power shortages is becoming increasingly unsustainable. Now, the business community warns that it is hampering economic growth and affecting jobs. "Companies will not make billions of investments if they are not sure they will get enough energy," says Anders Carlsson Jerndal, CEO of Pågen. Pågen is a well-known Swedish bread and baked goods producer. Founded in 1878 and headquartered in Malmö, Pågen has a market share of about 45% in Sweden.
High electricity prices and persistent power supply problems have caused hundreds of new jobs in southern Sweden to be lost as companies abandon new investments. One of the companies affected is baking giant Pågen.
"Our energy costs have increased significantly in the past few years, which obviously weakens our competitiveness. We pay more electricity prices than companies in the north, which leads to an uneven playing field," says Anders Carlsson Jerndal.
The difference in electricity prices between the north and the south is usually about 20%. But in May and June, electricity prices in the south were three times higher than in the other three electricity price zones in Sweden. The electricity produced by the Ringhals and Oskarshamn nuclear power plants is in tariff zone 3, while the southern region, including Skåne, Blekinge, Kronoberg, parts of Halland, Västergotland, Kalmar and Ljungköping, is in tariff zone 4. Every time electricity passes the border of a tariff zone, the price increases.
"We warned about this development in 2018-2019, when another reactor at Ringhals was to be shut down, but the authorities and politicians did not listen to us. If we had not shut down the most recent reactor, our electricity prices would have been 30-35% lower in the past years. Now we have to build nuclear power again," says Anders Carlsson Jerndal.
"We are just one of the companies affected in southern Sweden." Pågen experienced drastic electricity price increases after the pandemic and after the outbreak of the war in Ukraine in 2022. The company was forced to increase customer prices, resulting in a drop in sales.
"These problems are holding us back from growth and creating new jobs. But we are just one of the companies in southern Sweden that are suffering from declining competitiveness both domestically and internationally. Unfortunately, there are others that are worse off. Southern Sweden in particular has lost out to foreign companies due to energy issues. Companies will not make billions of investments if they are not sure they will get enough energy," says Anders Carlsson Jerndal.
Some of the Swedish industrial companies feeling the power crunch include eco-friendly liquid food packaging company Ecolean, engineering plastics manufacturer Polykemi, building ventilation system supplier Lindab and metal powder manufacturer Höganäs AB. Steel company Areco recently increased production but had to use diesel generators because there was not enough electricity. The company also plans to build a new plant.
"But we are postponing that investment until 2026. By then the new power line will be built," says CEO Peter Areskog.
"Energy policy is completely crazy." Areco believes that the company is stuck with electricity prices being completely dictated by the Swedish national grid and the regional grid Eon's extended grid. This undermines free competition.
"Energy policy is completely crazy. We had to postpone hiring 25-30 people. When many companies postponed investments, many jobs were lost," said CEO Peter Areskog.
In January, Swedish business newspaper Tidningen Näringslivet reported that aggregated data from Invest in Skåne showed that Sweden actually lost several major investments and 4,500 new jobs due to the power shortage.
"The situation is very worrying. In the next few years, the energy we currently get from the north will go to industrial projects in the north, which means we have to produce energy ourselves or rely entirely on imports," Jonathan Herrlin, business developer at Invest in Skåne, told TN in January.
But it's not just the power shortage, businesses are also hit by high electricity prices and differences in electricity prices between regions. Businesses in southern Sweden want to see a solution where electricity prices are the same no matter where the consumer is in the country.
"Sweden's system doesn't work well. A uniform national electricity price is feasible. Italy and Denmark have different electricity price zones, but the price is the same across the country. It depends mainly on the political will to solve the problem," said Anders Carlsson Jerndal, CEO of Pågen.
He believes that Sweden's energy problems are caused by politics. The shutdown of nuclear power was a historic mistake, which shows that Sweden undoubtedly needs to include controllable electricity in the energy mix.
"It takes at least ten years to build a new nuclear power plant, but other countries can do it in 4-5 years. We must make such an important decision based on facts and scientific analysis, rather than letting unprofessional politicians act as engineers," said Anders Carlsson Jerndal, CEO of Pågen.