Power shortages have affected Sweden's ambitious plans to electrify transport

Sweden's power shortage has seriously affected urban development projects such as 5G network construction, subway line expansion, new roads and residential areas, and the bid for the 2026 Winter Olympics. The power shortage has also affected the Swedish government's ambitious transportation electrification plan, and the distance with neighboring Norway is difficult to bridge in a short period of time. Relevant people believe that relevant regulatory authorities must make changes to make it possible to quickly invest in upgrading the power grid.

Sweden's ambitious plan to put millions of electric vehicles on the road to drastically cut transport emissions may be stymied by a lack of new charging infrastructure in major cities.

In the first five months of this year, generous subsidies from the Swedish government to the industry have led to a rapid increase of 253% in the sales of electric vehicles. The electric vehicle industry in Sweden is about to "take off", but it is likely to face the fate of ending before it even begins. The growth rate of electricity demand in Stockholm and other cities has exceeded the growth of local grid capacity, forcing new charging networks to face the situation of "competing for electricity" with facilities such as residential buildings and subway lines.

Smart construction of new facilities can alleviate some of these problems

To ensure the government's goal of achieving carbon neutrality by 2045, industry group Power Circle said the Nordic region's largest economy needs to add 2.5 million plug-in hybrid and electric vehicles by the end of the next decade. Many of these cars are mainly used for short trips and can be charged at home; the government is also considering charging long-distance vehicles such as trucks and taxis.

Tobias Henmark, head of the Swedish Charging and Drive Forum, said: "People buying electric cars should not be forced to take long routes to find charging stations. At present, there is a trend to make up for the shortfall by increasing capacity costs, but this will make it impossible to build charging infrastructure."

In order to control the growth of electric vehicles in the absence of sufficient power capacity, the "Electricity Circle" recommends that car owners do not charge during peak hours in the morning and evening, or even send electricity back to the grid. If enough electric vehicles unite in the future and are willing to use the grid to share batteries, the charging problem of more electric vehicles will be solved instead of exacerbating the problem.

"Electric vehicles are congesting the grid, and as we roll out new infrastructure, why not make it smarter at the same time to support the grid?" said Joanna Laxall, head of Circle of Power.

Benchmarking with Norway is not ideal

Despite a sharp increase in sales this year, Sweden still lags behind neighboring Norway in terms of total electric vehicle numbers. The oil-rich country had registered 10 times as many electric vehicles as Sweden at the end of May, making it one of the world's largest electric vehicle markets. Low taxes and generous benefits such as free parking and bus lane driving permits have driven domestic electric vehicle sales.

Sweden's electric car sales in the first five months were 6,694, a tiny fraction of Europe's total, where 500,000 electric cars are expected to be sold this year. According to a Bloomberg report, electric car shipments in Europe increased 40% in the first quarter, driven mainly by Germany, accounting for a third of all new cars.

Still, less than 4% of new cars sold in Germany and elsewhere in Europe are purely battery-powered, compared with more than a fifth in Sweden and 56% in Norway.

In Norway, where electric cars cost about the same as similar gasoline versions, the government has set taxes to eliminate the price difference to support more expensive electric cars. In Sweden, even with subsidies of $6,355 per vehicle last year, electric cars still cost twice as much as regular cars.

Power shortage has restricted the development of various industries

Sweden exported nearly 10% of its electricity last year, and its aging grid still struggles to deliver power to where it is most needed. Demand for electricity in Sweden's major cities is growing much faster than expected. The head of the local grid said it would take 10 years to build new power facilities, which means Stockholm will not be able to significantly increase its grid capacity until 2030.

The global trade war and weak export markets aren’t the only factors weighing on Sweden’s economic growth. The impact could be even greater: a dire situation at home, caused by the retirement of the country’s oldest nuclear reactors and a grid that is already struggling to keep up with demand in major cities.

The power shortage affects major urban areas in Sweden, restricting the development of various industries: the construction of the capital's 5G network, investment in new subway lines, etc. This may even make Stockholm's bid for the 2026 Winter Olympics fail.

For decades, cheap, surplus electricity has driven the Nordic region's largest economy to become one of the world's richest and most industrialized countries. Now that power supply in urban areas cannot meet demand, the Swedish economy, which has already been affected by global economic uncertainty and Brexit, will be further affected. Jonas Kamre, a strategist in Malmö, Sweden's third largest city, said: "Citizens and businesses are worried, annoyed and even angry. As an industrial country, how can Sweden let this happen?"

GDP growth is expected to be only 1.5% this year

Sweden is working through a plan to replace the capacity of four nuclear reactors in its industrial south with thousands of wind turbines in the north. But Sweden's grid connections, some of which date back to the 1950s, are not up to scratch, so the electricity can't be delivered to where it's needed. Worse, demand for power in cities is growing faster than expected as they electrify everything from transport to heating. Capacity problems threaten to weigh on Sweden's economy, which has enjoyed years of strong growth driven by household spending and exports. The Swedish economy is slowing, with GDP expected to grow just 1.5% this year, compared with 2.3% last year, according to the National Institute for Economic Research.

Over the past decade, large amounts of zero-carbon electricity such as hydropower, nuclear power and wind power have attracted billions of dollars in investment from major companies. As major urban areas develop, it will become more difficult to attract the same level of investment in the future. "Many companies are energy-intensive, and if we don't have enough capacity, it may affect long-term development." Ake Gustafsson, a senior economist at Swedbank, said, "Computer giants like Amazon can put data centers anywhere, but not Sweden." According to data from Sweden's power grid operator, Stockholm should not have any expectations of new loads on the grid in the next decade, which means the company will start turning away new large users as early as this fall.

Expect regulatory authorities to take action

The latest grid forecasts do not include the power demand of Olympic venues or new mobile networks. The use of 5G networks will generate a large amount of data, from self-driving cars to home appliances to road and rail sensors, which will require data centers to support, further increasing the power demand of the city's 2 million people.

Vasteras is about an hour's drive from Stockholm. The city just lost a $4.5 billion battery factory investment. The project may be relocated to the Skelft Sea near the Arctic Circle, where there is abundant electricity. "We want to develop the battery industry in our region, but that also requires sufficient electricity. Maybe we have to wait another ten years," said Anders Terjebek, the mayor of Vasteras.

Vattenfall AB CEO Magnus Hall said that regulation must change and red tape must be removed to enable rapid investment and upgrades to the grid. "If regulation is not changed, it will affect urban expansion and electrification, and our grid needs more investment," Hall said in an interview.

Original title: Sweden's power grid urgently needs rapid investment and upgrade