OSLO (Reuters) -A Swedish tender to reserve up to 800 megawatt (MW) of back-up electricity generation capacity for this winter has failed, leaving the country more exposed to potential power
Sweden fails to secure strategic power reserve for this winter
Impact of Sweden's Failed Power Reserve Tender
OSLO (Reuters) -A Swedish tender to reserve up to 800 megawatt (MW) of back-up electricity generation capacity for this winter has failed, leaving the country more exposed to potential power disruptions, transmission system operator Svenska kraftnat said on Tuesday.
Reasons for Tender Failure
"This is worrying," Pontus de Mare, operations manage at Svenska kraftnat said in a statement.
Future Implications for Power Supply
The lack of a strategic reserve makes the electricity system more vulnerable this winter, he added.
Criteria for Strategic Reserve Qualification
The reserve capacity sought to cover the period from November 16 until March 15 to ensure sufficient power supply during the coldest parts of the year, the grid operator said.
Collaboration with Government and Regulators
Six participants pre-qualified for the tender and Svenska kraftnat received three bids, but all offers exceeded the maximum price level of 120,000 Swedish crowns ($12,777.24) per megawatt (MW) set by the tender regulation.
"This price cap is the reason why a strategic reserve cannot be contracted for the coming winter, and Svenska kraftnat fears that the outcome will be the same next winter if the price cap level is not changed," it said.
This year's strategic reserve tender replaced a previous model and sought to bring the process in line with European Union state aid regulation.
Svenska kraftnat will now actively work together with the government and the national regulator, the Swedish Energy Market Inspectorate to find feasible solutions, it added.
While the risk of power shortages is considered low for this winter, it is set to increase in future with consumption set to grow faster than new power generation is added, Svenska kraftnat said.
To qualify for the strategic reserve, units must fulfil a number of criteria such as high and stable availability and cannot be active in the regular or balancing power markets during the contract period.
($1 = 9.3917 Swedish crowns)
(Reporting by Nora Buli, editing by Terje Solsvik)
