Here at Ellevio, economic responsibility entails ensuring a financially stable business over time for our customers, investors and employees. This way, we can make the necessary investments for safeguarding a sustainable electricity network for our customers, now and in the future, while also securing fair and sustainable returns for our investors and a great workplace for our employees.
Investments are needed to maintain an electricity network of the same quality as today. The need for investment is coinciding with a period of rapid technological development and a societal transition to renewable electricity that entails major opportunities for synergies. In other words, as the electricity network industry enters its most intense investment phase since the 1960s and 1970s, electricity networks need to be built to meet the needs and requirements with which society will be faced in 40–50 years, thus ensuring a future-proofed and world-class Swedish electricity network. Political incentives are extremely important as investments that fail to materialise risk hampering the energy transition.
Drivers behind the need for investment
Technological progress in areas such as solar panels has made it possible for more people to product electricity at a reasonable cost for their own use or for sale. To ensure this works effectively, the sites where electricity is produced must first and foremost be connected to the electricity network, which will require investment in itself.
In addition, the electricity network will need to be adapted to offer more variable production. If the wind is not blowing or the sun is not shining, neither wind farms nor solar panels will deliver electricity, and in this case the electricity network will need to be able to remedy potential local shortages of electricity. Conversely, at certain times, more electricity will be produced than is used and, in these cases, electricity networks must determine how much electricity can be distributed to other parts of the country or exported, as well as how much needs to be stored for use later in the day or week.
Our financing and interest rates do not affect the prices paid by customers
Electricity network companies operate as monopolies, which are subject to state supervision and regulation by the Swedish Energy Markets Inspectorate (Ei). The business’s revenue is decided by the Energy Markets Inspectorate and the regulation should ensure that the grids are of good quality and provide long-term security of supply.
Electricity network companies receive compensation for reasonable costs linked to running the operations and a reasonable return on investments in the development of the electricity networks. The allowed revenues, that is, how much we are paid by our customers, is determined by regulations that are identical for all Swedish electricity network companies.
Allowed revenue is not affected by the owner of the operations (municipality, private or other) or how the operations are financed; no electricity network company can charge its customers more than the revenue regulation allows. This means that neither financing nor interest rates have any impact on the prices paid by customers.