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Power to the people

In the early days of electricity, there was fierce competition in the construction of electricity distribution systems. Each individual power producer constructed its own grid. In war times, producers started to cooperate, to optimize production. That typical Swedish model lasted for decades.

Articles

Distribution – from competition to monopoly

Initially electricity distribution was characterised by competition and virtually a 'wild west' situation. Each power company set up their own lines. But increasing consumption of electricity forced standards, collaboration – and a monopoly.

Coordinated production

The Swedish system was marked by cooperation between power companies from the very early days. This enabled the companies to optimise power generation, and produce electricity in the locations where it was cheapest. This collaboration was expanded in the 1970s to cover the entire Nordic region.

Role model for European deregulation

Swedish power companies, including Vattenfall, were initially negative towards a deregulated electricity market. But Vattenfall adapted quickly. When the Nordic market was finally deregulated, it became the model for other European countries.

Planners’ dilemma

Getting electricity production to match demand is not easy. If you build too few power plants, there will be shortages; if you build too many, it will be expensive. Development in Sweden and by Vattenfall shows examples of both cases.

Power distribution – the physical link to the customer

Vattenfall’s commitment to local electricity networks has grown and today about 18 per cent of the country’s electricity customers are connected to Vattenfall’s electrical grid. But it has not been easy to achieve good regulation of the power grid monopoly.

Storm puts focus on security

A natural disaster put the spotlight on the vulnerability of Swedish society. When the electricity stops working, so does virtually everything else. It forced Vattenfall and other electricity grid operators to significantly increase the rate of investment to make networks more secure in all weathers.

A national grid

For the hydropower generated in Norrland to reach the southern parts of Sweden, a national grid was needed. Vattenfall and private players worked together on this issue. But eventually the Swedish parliament and government decided to give Vattenfall a monopoly on the lines.

Sales of electricity to the private market in Sweden

Generation and sales of electricity are two different areas of business for Vattenfall in Sweden. In very simple terms, it entails selling the electricity generated to the Nordpool electricity exchange, while the electricity sales business area purchases electricity from Nordpool and sells to customers.