Sweden to Take 'Exceptional' Measures as Electricity Prices Soar Almost 300%

Electricity prices in the most populous part of the country, which is home to the majority of Swedes, have spiked amid a cold spell, increased demand, and an overall gas price surge across Europe.

Sweden has earmarked some SEK 6 billion (€590 million, $670 million) for a temporary scheme to help the most affected households across the Scandinavian country to cope with high electricity bills this winter, government officials have announced.

A total of 1.8 million affected households with energy consumption above certain levels are entitled to compensation worth some SEK 2,000 (€195, $220) during the winter months.

"This is an exceptional measure in an exceptional situation, it is unusual to go in with support when prices fluctuate in markets", Finance Minister Mikkel Damberg said at a press conference.

Electricity prices in Sweden have spiked amid a cold spell, increased demand, and an overall gas price surge across Europe.

According to the Swedish energy market regulator, the electricity costs for an average apartment in the southern, most populated half of the country where a large majority of Swedes live increased by 266% in December.

"We hadn't expected these price levels and now they are hitting very hard", Damberg admitted in a subsequent interview with national broadcaster SVT, stressing that the government is responding with "an enormous amount of money".

Swedish homeowners are already feeling the pinch and have started adopting strategies to lower their consumption – ranging from turning down the heating to using alternative heat sources and even wearing thick socks. There have even been reports of people taking out bank loans to pay their electricity bill.

"I understand that people are worried about their finances", Sweden's Energy Minister Khashayar Farmanbar said.

Sweden mainly derives its electricity from domestic hydro-power, nuclear reactors, and wind and doesn't rely on imports of natural gas, unlike many fellow EU nations, which led to a milder price shock. However, as prices are set on international markets, Swedish businesses, industries, and consumers have also been affected.

Sweden's minority Social Democratic government is expected to obtain the necessary backing for the plan to be railroaded through parliament.

In December, a similar measure was introduced in neighbouring Norway. The move was described as "providing some breathing space" by Finance Minister Trygve Slagsvold Vedum and will cost the nation about NOK 5 billion (€500 million, $580 million).