Vattenfall to sell Swedish power grid: report

Swedish state-owned power company Vattenfall wants to sell its Swedish electricity network to bring in funds for investment in nuclear power in Britain, Sweden’s TV4 reports.

Vattenfall to sell Swedish power grid: report

The sale is expected to bring in around 50 billion kronor ($7.3 billion). According to an internal document reviewed by TV4, Vattenfall wants to find a buyer by the end of the year, and close the deal before autumn 2010.

CEO Lars G. Josefsson is said to be the driving force behind the deal, which has prompted protests by other top managers at Vattenfall.

Deputy CEO Hans von Uthman has refused to endorse the deal and is set to lose his job as a result, sources tell TV4, although von Uthman refused to comment on the matter himself.

On Wednesday, the company confirmed in a statement that von Uthman would leave his post at the end of the year. However, spokesperson Mark Vadasz denied that the the move had any connection to the rumoured sale.

“He has not been fired,” Vadasz told the TT news agency on Wednesday.

Around 850,000 households are connected to Vattenfall’s electricity network in Sweden, which includes poles, power lines, cables, and other equipment.

After first refusing to comment on the revelations on Tuesday, Sweden’s industry ministry offered a statement by spokesperson Johanna Martin several hours later.

“We won’t comment as these are questions for the company to answer. More information will be coming shortly from Vattenfall,” she told the TT news agency.

Martin confirmed that the ministry had been in contact with Vattenfall during the evening, although she refused to confirm that the company planned to sell its electricity network.

Around midnight, the company issued a short statement denying it had made a decision to sell the electricity grid. However, the statement made no mention of whether or not the plans existed.

“A company of Vattenfall’s size is always reviewing its assets, but there has been absolutely no decision to sell the network,” company spokesperson Mark Vadasz told TT.

The political opposition was quick to criticize the rumoured sale.

“If the information is true, it’s completely unacceptable. The electricity grid is an important part of the country’s infrastructure and the question must be addressed in the Riksdag,” industrial policy spokesperson for the Social Democrats, Tomas Eneroth, told TT.

On Wednesday, Vattenfall continued to deny the report.

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KEY POINTS: How will Spain tackle rising electricity prices?

On Tuesday, the Spanish government approved a raft of measures to help reduce the ever-increasing electricity bills that those in Spain have been facing in recent months. Here's how they plan to do it and what measures will be in place going forward.

KEY POINTS: How will Spain tackle rising electricity prices?
How the Spanish government plans on reducing electricity bills. Photo: Michael Schwarzenberger / Pixabay

Electricity prices have been rising to record levels recently, with one of the highest prices yet at €172.78 /MWh, expected on Wednesday, according to electricity market operator OMIE. 

Here’s how the government plan on lowering the price of electricity in Spain. 

Prohibiting companies from cutting off electricity for low-income families

The government has approved a new rule which states that vulnerable consumers (families with low incomes) will be able to benefit from 3.5kW of power – sufficient for an average household for six months – in the event that they are unable to pay. This means that the limit at which companies can now cut off the electricity supply of the most vulnerable has been extended from four to ten months.  

Tax cuts

Special tax on electric power has also been dropped from 5.1 percent to 0.5 percent, as promised by Prime Minister Pedro Sánchez during his interview on TVE on Monday. The suspension of the tax on electricity production has also been extended.  

Electricity auctions

One of the most innovative decisions among these new measures is that the government will call auctions in which the large electricity companies such as Endesa, Iberdrola, Edp, and Naturgy will be obliged to sell a percentage of the energy they generate.  

These auctions, which will have a minimum price to guarantee production costs, will be attended by small trading companies and large industries. These companies will then be able to purchase energy cheaper than in the current wholesale pool. Mainly nuclear and hydroelectric plants will participate in this plan.

The government announced that the first auction will be called before the end of the year. 

Putting a cap on gas prices

During the next two quarters, the price of gas consumed by households will not be updated in accordance with market prices.

Third deputy Prime Minister Teresa Ribera explained that a price hike of more than 28 percent for gas in the wholesale market is expected, while on average the regulated rate will rise below five percent.

In addition, until March 31st 2022, the government will tax the profits of the electricity companies, due to the rise in gas prices. They have established a cap of €20 euros per megawatt hour for gas, and when it rises above that price, the extra profits obtained by the companies will be charged a tax that will be used directly to reduce electricity bills.

Maximum and minimum reservoir levels

After the controversial drainage of reservoirs by the electricity companies coinciding with the maximum prices in the wholesale market, the government has decided to set maximum flow levels that can be discharged each month, and minimum levels that must be maintained in the reservoirs.

This prevents an excessive amount of water from being drained. It will be the hydrographic confederations that will set these amounts.