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Persson Could Consider Reversing Deregulation

Published torsdag 23 mars 2006 kl 12.00
Prime Minister Göran Persson

Swedish Prime Minister Göran Persson say’s he could consider reversing the deregulation of Sweden’s electricity market due to lack of competition in the energy sector.

The main players in the Swedish energy market; state-owned Vattenfall, Finland’s Fortum and Germany’s E.ON, have been criticised by politicians and big energy consumers in the industry for setting excessive prices.

Persson told the news agency TT that he thinks ”it is very interesting that the industry is bringing forth this demand and we will look at it very carefully.” 

The Prime Minister added that he has ”never hidden the fact that I opposed the deregulation of the electricity market.”

Sweden’s power market was deregulated in the mid-1990s to boost competition in the previously state-dominated business, but new energy firms have found it hard to make in-roads in the capital-intensive sector.

Last year industrial firms, including paper and hygiene products maker SCA and metals group Boliden, signed Sweden’s biggest corporate energy deal to import power from Russia to get lower prices than in the Nordic market.

Nordic power prices have climbed to three-year highs, approaching all-time peaks set in winter 2002-2003.

The comments by Persson came after Sverker Martin-Lof, chairman of SCA, in an interview with a Swedish daily called for re-regulation of the energy market.

Martin-Lof told the daily Svenska Dagbladet that ”I am aware of that this is a very unusual demand to be coming from the business community, but at present we can’t see any other solution to the energy price problem other than state regulation of the electricity market.”   

Martin-Lof added that ”What we have today is not a functioning competitive market as was intended, but rather an oligopoly with big limitations.”

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