Swedish power prices higher and more volatile after nuclear shutdowns

What the data shows

Sweden’s grid is split into four price zones running north to south, from Luleå (SE1) to Malmö (SE4). The northern zones generate a surplus, mainly from hydropower and wind; the southern zones, home to the largest cities, consume more than they produce. Before 2019, prices across all four zones moved almost identically — a sign that northern surplus was comfortably meeting southern demand.

That changed after the closures. Northern and southern prices decoupled, and the southern demand zones bore the brunt: SE3 prices ran about 100% higher and SE4 about 141% higher than before the shutdowns, while volatility in those zones rose several-fold. The northern zones saw far smaller effects.

Why prices rose when supply didn’t fall

The intuitive explanation — that closing reactors caused a shortage — isn’t supported by the data. National generation actually rose slightly over the period, as wind expanded from roughly 12% of generation in 2015 to about 24% in 2024. The problem is structural rather than one of volume: the lost reactors sat in a high-demand southern zone, and the wind that replaced them is concentrated in the north and is inherently variable. The result is more power traveling longer distances over constrained transmission lines, and sharper price swings when the wind drops.

How the grid’s behavior changed

The PCA tells the structural story directly. Before the shutdowns, hydropower was the grid’s main stabilizer, backstopping both nuclear and wind. Afterward, wind became the dominant driver of variability, hydropower was left as the primary — often sole — counterbalance, and the shrunken nuclear fleet was pushed into a secondary stabilizing role despite its smaller share. In short, the grid lost a layer of redundancy that had kept prices stable and aligned across regions.

Policy recommendations

• Extend the operating lifetimes of Ringhals 3 and 4 as far as safely possible, in line with extensions granted elsewhere.
• Avoid further reactor shutdowns, since stable generation backstops weather-dependent renewables.
• Pair new wind and solar with proportional storage, sized from a realistic analysis of demand and grid capacity — not from levelized-cost figures alone.
• Keep generation close to demand centers, or invest in inter-zone transmission to relieve north-to-south strain.