Core market – Sweden

Vattenfall is the leading energy company in the Nordic countries.

Its operations include generation, distribution and sales of electricity and a significant heat production, largely based on biomass. Vattenfall also sells district heating and district cooling.

With about 50 per cent of the Swedish electricity generation Vattenfall provides about 20 per cent of the total electricity supply in the deregulated Nordic electricity market. The main sources of electricity are nuclear power and hydro power.

Vattenfall is Sweden’s largest network operator with approximately 900,000 network customers. Vattenfall has roughly a 30 per cent market share of the Swedish electricity sales (sales to both retail and industrial customers) and sells electricity nationwide. Customers include several large and/or energy-intensive Nordic industrial companies, such as AB Volvo, Volvo Cars, Saab AB, Preem, Sandvik AB, Stora Enso, Holmen, LKAB, SCA, Vargön Alloy, Outokumpu, Boliden and Borealis.

The Swedish market

The electricity price from producers to suppliers in the Nordic countries is set on Nord Pool, a trading spot for electricity, where like in any commodity exchange the price is governed by supply and demand.

Five large producing companies account for approximately two thirds of the production: Vattenfall, E. ON, Fortum, Statkraft and Dong. In practice, however, it is the different production plants that compete to supply electricity to Nord Pool.

On the demand side Scandinavia has a higher proportion of heavy industrial customers with electricity-intensive production than the rest of Europe. A large number of electricity suppliers compete to supply electricity to retail customers.

Brief history

Vattenfall AB is a Swedish public company with headquarters in Stockholm. The company is 100 per cent owned by the Government of Sweden. The Parliament has decided that Vattenfall shall operate in a businesslike manner and generate a market rate of return. Operating as a commercial energy business, Vattenfall shall be among the leaders in developing environmentally sustainable energy production.

Vattenfall was founded in 1909 to exploit the national fall rights to produce electricity and supply power to the railways and industries. Up until the 1970s hydro power was the main source of energy and platform for industrialisation in Sweden. In the 1970s and 80s, hydro power was complemented by nuclear power, which dramatically reduced Sweden’s dependence on imported oil and coal. In 1992 Vattenfall was restructured as a limited company.

The Nordic region became a single electricity market in 1996 with open competition. Vattenfall established a strategy for international growth and acquired assets in several countries aiming to become a leading European energy company.