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Sweden fails to secure strategic reserve power for this winter

Svenska kraftnat, the Swedish transmission system operator, said that a tender for up to 800 Megawatts (MW) of backup electricity generation capacity to be used this winter failed. This leaves Sweden more vulnerable to power outages, it added.

In a press release, Pontus de Mare said: "This is concerning."

He added that the lack of a reserve made this winter's electricity system more susceptible.

Grid operator: The grid operator has stated that the reserve capacity is intended to cover the period between November 16 and March 15, to ensure adequate power supply in the coldest months of the year.

Svenska kraftnat was able to receive three bids from six participants who had prequalified, and all of them exceeded the price limit set by the tender regulations, which is 120,000 Swedish Crowns (12,777.24 USD) per megawatt.

Svenska kraftnat said that the price cap was the reason for which a strategic reserve could not be contracted to cover the winter ahead. It feared the same outcome would occur next winter if it did not change the level of the price cap.

The strategic reserve auction of this year replaced an earlier model, and aimed to bring the process into line with EU state aid regulations.

Svenska kraftnat said that it will actively work with the Swedish Energy Market Inspectorate and the Swedish government to find viable solutions.

Svenska kraftnat stated that while the risk of power shortages this winter is low, they are expected to increase in the future as consumption is predicted to rise faster than power generation.

For units to qualify for the Strategic Reserve, they must meet a set of criteria including high and stable availability. They cannot also be active on the regular or balance power markets. $1 = 9.3917 Swedish Crowns (Reporting and editing by Terje Solsvik).

(source: Reuters)