CHAPTER 9
Stockholm, Sweden. Photo: Unsplash / Dusan Petkovic
9. Sweden
9.1 Regulatory framework and organization of the market
9.1.1 Relevant authorities and actors
In this subsection, the role of different relevant authorities and actors are described in Table 9‑1.
Table 9‑1: Actors and relevant regulations
Role | Name | Responsibility |
Regulatory authority | Energimarknadsinspektionen (Ei) | Responsible for supervising the electricity, district heating, and natural gas market in Sweden and ensuring the actors’ compliance with the regulatory framework. Also responsible for suggesting changes and developing regulations. Also offers the electricity contract comparison site “elpriskollen.se”. |
Consumer agency | Konsumentverket | Government agency responsible for consumer legislation and monitoring of consumer affairs; the electricity market is one of 45 different markets monitored by the Consumer Agency. |
Competition authority | Konkurrensverket | Enforces the Competition Act and is responsible for monitoring the markets to promote competition both in private and public activities so that it is efficient and beneficial to consumers. |
Consumer information and guidance (Consumer council) | Konsumenternas energimarknadsbyrå | An independent bureau that offers free advice and guidance to consumers on the Swedish energy markets. It is funded by the Consumer Agency, the Energy Agency, Ei, and two industry organizations. The bureau also presents statistics on reported consumer problems and complaints, as well as an updated list of electricity retailers that have received an unusually high volume of complaints. |
National board for consumer disputes (Electricity appeal board) | Allmänna reklamationsnämnden (ARN) | A public authority whose main responsibility is to impartially resolve disputes between business operators and consumers. |
Industry organization for electricity retailers | Energiföretagen | Trade association representing companies that distribute, store, sell, and supply energy in Sweden, mainly for heating, electricity, and cooling. There are around 400 members in total, including municipal, state-owned, and private companies, as well as associations. |
9.1.2 Regulatory framework
Retailer requirements
There is currently no licencing procedure in the Swedish electricity retail market. A requirement for a licence could create a significant barrier to entry, because companies would need to be granted permission to operate in the market, contradicting the ambition of a free market without specific barriers to entry. However, electricity retailers must adhere to the general requirements of running a business, as well as certain provisions for actors on the Swedish electricity retail market. For example, the reporting of electricity contracts must be published on the price comparison website elpriskollen.se; they also need to sign an Ediel agreement with Svenska kraftnät for electronic information exchange and registration and reporting according to the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT).
Optional certifications
The “fair electricity trading” certification, developed by the trade association Energiföretagen, can be obtained by electricity retailers seeking to ensure quality and demonstrate their adherence to 18 customer promises. These promises entail that companies commit to going beyond what the law requires when it comes to selling electricity contracts in a fair manner, thereby making electricity customers feel safer in their choice of electricity retailer. In 2022, a total of 43 electricity retailers had managed to obtain this certification.
The “fair electricity trading” certification, developed by the trade association Energiföretagen, can be obtained by electricity retailers seeking to ensure quality and demonstrate their adherence to 18 customer promises. These promises entail that companies commit to going beyond what the law requires when it comes to selling electricity contracts in a fair manner, thereby making electricity customers feel safer in their choice of electricity retailer. In 2022, a total of 43 electricity retailers had managed to obtain this certification.
The “fair electricity trading” certification means that a certification body has verified that the electricity company has functional procedures that make it clear what the customer is buying and what the agreement entails. Energiföretagen supports the certification, but an independent and accredited certification company (DNV GL) manages the certification of companies. DNV GL also oversees electricity retailers’ compliance with the set requirements of the certification. If an electricity retailer fails to meet the requirements, DNV GL also has the authority to revoke the certification.
Customers who have signed an electricity contract with a certified electricity retailer can refer to the customer promises in the case of a dispute to seek a resolution.
The customer promises as a whole are presented on the Energiföretagens website: https://www.energiforetagen.se/energifakta/schysst-elhandel/krav-pa-certifierade-foretag/
Complaint list
The Swedish Consumer Energy Markets Bureau provides information on complaints and an updated list of companies who have generated the most complaints in relation to the number of customers in the past 12 months. Currently, three out of around 150 companies fit these criteria. The list is updated once per quarter. It aims to support and inform customers who are choosing electricity contracts and electricity retailers to help them make a more informed decision and avoid consumer problems as far as possible.
The Swedish Consumer Energy Markets Bureau provides information on complaints and an updated list of companies who have generated the most complaints in relation to the number of customers in the past 12 months. Currently, three out of around 150 companies fit these criteria. The list is updated once per quarter. It aims to support and inform customers who are choosing electricity contracts and electricity retailers to help them make a more informed decision and avoid consumer problems as far as possible.
The list is generated using statistics from the contacts the bureau has with people seeking help to resolve a dispute with a company in the electricity market. For a company to be included in the list, the number of complaints must have exceeded a certain minimum level, currently 35 complaints; the minimum level is revised every quarter along with an update of the list. The complaints included in the statistics relate to cases where a customer has been unable to resolve a dispute with the company’s customer service and has needed guidance and support from the bureau’s consumer service. The agency also considers whether there may be a basis for the complaints. Further details and information are also provided for the complaints usually received in relation to each company on the list.
Provisions that prohibit vertical integration are provided by the Electricity Act, which includes provisions that prohibit the involvement of electricity grid companies that are a part of a group that collectively serves at least 100,000 electricity users with companies that trade or produce electricity. Specifically, the DSO must have an organization and decision-making process that is separate from companies trading or producing electricity, and they cannot have a board member, managing director, or signatory who simultaneously holds positions as a board member, managing director, or signatory in a company that trades or produces electricity.
Invoicing
The required information and design of electricity invoices is governed by regulations based on the Electricity Act. The design of the invoice is regulated by paragraphs 5–7 § § in the regulation on delivery of electricity and aggregation services. The regulation states that the electricity retailers must explain the contents of the invoice in an easily understandable manner if requested by the electricity user, offer the electricity user invoices in electronic format, and invoice electricity users (who have remotely readable meters) at least once every quarter and those who have meters that cannot be remotely read at least once a year.
Moreover, the information required of electricity retailers on their invoices is governed by paragraphs 9–10 § § in the same regulation. First, the invoice should be clear and include general information on the retailer’s name, contact details, and contact details for customer service. Other required information includes:
- Billing period, applicable prices, and the amount to be paid for electricity delivery, broken down into fees and the measured values in kWh on which the billing is based
- The amount to be paid for any other services provided by the electricity retailer during the billing period and the applicable prices for these services
- Invoice due date
- Identification code for the delivery point
- Applicable delivery agreement, its validity period, and where the electricity user can find information about the contents of the agreement
- What it means for the agreement to be an assigned agreement, if such a delivery agreement is applied.
In addition, the information below may be provided on the electricity retailer’s website if there is a clear instruction on the invoice about where the electricity user can find them:
- How the agreement can be terminated and whether it can be terminated free of charge
- Opportunities for and benefits of changing electricity retailer
- Where comparison tools are available that compare offers from different electricity retailers
- Each energy source’s share of the electricity that the electricity user purchases according to the delivery agreement
- Other services that the electricity retailer can provide
- Conditions for compensation and reimbursement for services that have been incorrectly invoiced or that do not meet the specified quality
- How the electricity user can make complaints and how complaints are handled
- Consumer rights
- Independent services for dispute resolution and contact details for such services.
For invoices based on actual consumption, the following additional information is required:
- Graphic comparisons of the user’s electricity consumption during the billing period and the consumption during the same period the previous year
- Contact information for independent user advice on available energy-efficiency measures
- Comparisons with a normalized or benchmarked average electricity user in the same user category.
If the customer’s electricity retail company and electricity grid company are part of the same company group, the costs are usually invoiced together. The customer will then receive an invoice that includes both grid and electricity costs. If the customer switches electricity retailer, they may receive separate invoices, one for the grid cost and one for the electricity cost, as joint invoicing is not always possible. However, there are electricity retailers that offer joint invoicing even if they are not part of the same group as the grid company. There are no financial benefits for customers to have the grid and electricity costs combined on one invoice, as companies are not allowed to charge invoice fees according to the Electricity Act.
An electricity trading company must offer multiple payment methods when invoicing and cannot disadvantage an electricity user based on the payment method chosen. This means that contracts are not allowed to be designed so the electricity consumer is forced into a certain payment method. The fees charged for a particular payment method or for a system of advance payment must not exceed the costs incurred by the payment recipient for the use of the payment method or system.
Contracts
Customers can switch electricity retailer by contacting another electricity retailer and entering into a new agreement. The new agreement can be accepted in different ways, through writing, online, or over the phone. When a customer calls the company to enter into an agreement, the audio recording is sufficient as proof that they have accepted the agreement. Moreover, electricity retailers are only allowed to enter agreements with customers who have a valid electricity grid agreement, and it is the responsibility of the electricity retailer to ensure this. When a telemarketer calls a consumer, the consumer must accept the agreement in writing for it to be valid pursuant to a consumer protection regulation (regulation of distant contract sale).
Switching electricity retailer is free of charge for consumers and small businesses. The electricity retailer must ensure that a user can switch within three weeks from the request for the switch in a non-discriminatory manner regarding costs, effort, and time. This means that the electricity retailer is not allowed to impose a burdensome administrative process on an electricity user when they request to switch.
If the customer has a previous agreement with a commitment period and/or notice period, they need to ensure that this agreement is not terminated prematurely and risk a termination fee. The electricity retailer can charge termination fees only for agreements that are for a specific period with a fixed-price component. The lock-in period varies between electricity retailers and contract types. For fixed-price contracts, a lock-in period of one to three years is the most common, although it can range between one month and 10 years. Regarding variable-price contracts, having no lock-in period or a lock-in period of one month is common. A variable contract with a lock-in period means that the customer is bound during the contract period, but the electricity price still varies with the development of the electricity exchange.
Often, electricity agreements are automatically extended if the customer does not actively contact the company and terminate the agreement. For the electricity retailer to have the right to extend the electricity agreement, it must be stated in the terms of the agreement. The company must also inform the customer of the contract extension 60–90 days before the extension takes place through a separate notice (applies for fixed-term contracts that are automatically renewed after the contract period has ended), including what the new agreement will be if no active change is made. For electricity agreements entered over the phone or through a website, the customer has a right of withdrawal for 14 days. Extension of the right of withdrawal period by up to one year applies if the customer has not received sufficient information regarding the right of withdrawal. As soon as sufficient information is provided, the right of withdrawal period of 14 days begins.
If an electricity user has lost their electricity agreement, the customer’s electricity grid company will assign the customer to an electricity retailer, and the customer is entered into what is called “assigned price”. Usually, the assigned price is higher than other price alternatives and can change during the year; however, these changes occur more slowly than the non-assigned monthly flexible price alternatives. Electricity grid companies have an obligation to ensure that an electricity retailer has committed to providing electricity to the electricity user on reasonable terms. Within seven days of the assignment, the electricity grid company must inform the electricity user of the assigned electricity retailer. The assigned electricity retailer must, at least once every quarter, inform the customer of their offered contract types and prices, as well as where information can be found on contracts and prices offered by other electricity retailers.
On 1st June 2023, new regulations were introduced into the Electricity Act, stating provisions on how assigned contracts are not allowed to be hourly price contracts or dynamic prices. Dynamic prices refer to prices that reflect the price on the spot market at every hour, with an interval that at least corresponds to the frequency for settlement on the market. Moreover, an assigned contract is not allowed to have a notice period longer than 14 days. Historically, assigned prices have been fixed-price contracts (with a maximum 14-day notice period), but recently it has become more common that the assigned price contract is a variable-price contract.
The price comparison website “elpriskollen.se”, offered by Ei,
According to the regulation 2016:742 with instructions for Ei, 7§ p 4, Ei shall provide a comparison tool that meets the requirements of Article 14.1 of Directive 2019/944.
All electricity supply companies are obligated to report information on prices and terms applied by the company for delivery of electricity to Ei for publication on elpriskollen.se. This obligation applies for certain contract types that can be entered into by customers and for electricity users with an expected annual electricity consumption below 100,000 kWh.
Regarding information about contracts, electricity retailers have no specific requirements about having to list all their contracts on their website. However, they are required to provide certain information about their products and services, such as the price and terms of the contract, which can be provided on their website or in other easily accessible channels. This information must be updated regularly.
An electricity supply company that intends to change the terms of an ongoing indefinite agreement must inform the electricity user about the changes and their right to terminate the agreement in a separate notice. If the change concerns the electricity price, the reasons and conditions for the change must also be included in the notice. The notice should be designed in a way that the full implications of the term changes are made evident solely by reading the notice. The company must notify and inform the user at least two weeks before the changes take effect; if the user is a consumer, they must be notified at least two months before.
Marketing
There are no particular requirements or regulations that apply only to marketing within the electricity market in Sweden, and the marketing of electricity products is governed by the general Marketing Act. The act applies to all marketing of information by businesses to consumers and is applicable to all marketing activities. In the act, marketing not only refers to advertising but also includes the mere offering of a product. According to paragraph 5 § of the Marketing Act, marketing must comply with good marketing practices. Marketing that violates good marketing practices is considered unfair under paragraph 6 § of the Marketing Act if it significantly affects or is likely to affect the recipient’s ability to make a well-informed business decision.
Win-back tactics are allowed in Sweden, but they must follow certain rules. According to the Marketing Act, it is not allowed to use misleading or aggressive marketing or to harass consumers by calling or sending unwanted messages. In addition, there are requirements that consumers should have the opportunity to terminate subscriptions or agreements without hindrance. If the company follows these rules, win-back sales can be used in electricity trading in Sweden.
SMEs’ customer rights
Rights for SMEs are limited in comparison to consumer rights. According to Ei, many complaints received by Ei and the Swedish Consumer Energy Markets Bureau show that the smallest companies, defined as micro-enterprises, are affected by unfair business practices. The European Commission defines micro-enterprises as companies with less than 10 employees and a maximum annual turnover of 2 million EUR. In 2020, around 96% of companies in Sweden fell into this category, with 79% of these being sole proprietorships.
Government assignment on unfair business methods: https://ei.se/download/18.234a701c1863c067849502b/1676625808935/Oschyssta-aff%C3%A4rsmetoder-Ei-R2023-01.pdf. Date: 28.11.23
Examples of unfair business practices affecting micro-enterprises include telephone sales deceiving the company into switching electricity retailer, false promises of better contract terms or partnerships between an electricity grid company and an electricity retailer, and received confirmation of a concluded agreement when the company has only agreed to receive more information about a contract. Two business operators who enter into a contract are legally considered equal parties, although the micro-enterprise often has a weaker position compared to the contracting party. The consumer protection rules do not apply to micro-enterprises, even when they are in a weaker position compared to their contracting party.
In a report published by Ei in 2023 on “unfair business methods”
Government assignment on unfair business methods: https://ei.se/download/18.234a701c1863c067849502b/1676625808935/Oschyssta-aff%C3%A4rsmetoder-Ei-R2023-01.pdf. Date: 28.11.23
Sanctioning
Since electricity supply companies do not need a licence to operate, no licence can be withdrawn.
The “fair electricity trading” certification can be withdrawn if the company does not adhere to its customer promises. The trade association Energiföretagen developed and manages the certification, together with the independent and accredited certification company DNV GL, which oversees the certifications themselves. The certification acts as a form of self-sanctioning, as it is not connected to any authority but something for which many electricity retailers strive.
The up-to-date list of companies with unusually high numbers of complaints, managed by the Swedish Consumer Energy Markets Bureau, also provides self-sanctioning within the market (see Retailer requirements under Appendix A). The price comparison tool Elpriskollen includes information of companies included in this list, as well as which companies have the “fair electricity trading” certification, making it easy for customers to see which companies receive many complaints and which are striving for fairer customer treatment. As the list also provides information on which complaints the companies on the list usually receives, it offers a way to create transparency for customers regarding unfair business practices, making electricity retailers endeavour to not end up on the list.
Provisions on fines in the Electricity Act are stated for electricity grid companies who fail to meet certain obligations. However, there is no stated limit on the size of the fine. Additionally, the Electricity Act allows for fines for other actors as well. The regulatory authorities (in the Swedish case, this applies to Ei) that are responsible for ensuring that laws and regulations are followed have the right to issue injunctions to individuals or organizations to ensure compliance with applicable regulations and conditions. Injunctions that are not followed can be reinforced with fines.
9.1.3 Government response to the energy crisis
To help reduce electricity consumers’ financial strain from high electricity prices, the Swedish government gave Svk three assignments to implement electricity support funded by bottleneck revenues. One was directed to businesses and legal enterprises, and two were directed to households. The first electricity support was given to households in bidding areas SE3 and SE4 with an electricity grid agreement on 17th November 2022 for the period of October 2021 to September 2022. The second round of electricity support was given to households in all bidding areas with an electricity grid agreement on 31st December 2022, covering the period between November and December 2022. The third round of electricity support was given to business owners and legal entities in bidding areas SE3 and SE4 with a grid agreement on 17th November 2022, covering the period from October 2021 to September 2022.
Additionally, the government has given two assignments to the Swedish Energy Agency (Energimyndigheten) to provide electricity and natural gas support to businesses and households. The electricity support was given to electricity-intensive businesses, defined as businesses with an electricity consumption of at least 0.015 kWh/ SEK of turnover. Besides being defined as an electricity-intensive business, the businesses needed to have experienced electricity prices that were at least 1.5 times higher during the covered period compared to their average price in 2021. The support covered the period of October to December 2022 and was funded by bottleneck revenues. Furthermore, support for high natural gas prices was given to private gas consumers in southwest Sweden connected to the western Swedish gas network. The support sought to mitigate the effects of future high gas prices, although it was based on consumption between October 2021 and September 2022 when gas prices were high. A budget of 150 million SEK was assigned from the government to Energimyndigheten to allocate to the gas companies, which in turn allocated the support to their customers.
The compensation level for household customers was calculated as the difference between the average electricity price during the covered period and the national reference price (75 öre/kWh). The actual compensation was then calculated as the electricity consumption during the covered period multiplied by the compensation level. Moreover, for the second electricity support, a maximum limit of 80% of the electricity consumption was set to be covered by the electricity support. A summary of the compensations for the three first rounds of electricity support can be seen in Table 9‑2.
Table 9‑2: Electricity and natural gas support in Sweden
Support round | Support receiver | Compensation level | Average price during covered period | Covered period |
Electricity support – Round 1 | Household customers SE3 | 50 öre/kWh | 125 öre/kWh | Oct 21 – Sep 22 |
Household customers SE4 | 79 öre/kWh | 154 öre/kWh | ||
Electricity support – Round 2 | Household customers SE1 | 0,8 x 90 öre/kWh | 165 öre/kWh | Nov 22 – Dec 22 |
Household customers SE2 | 0,8 x 90 öre/kWh | 165 öre/kWh | ||
Household customers SE3 | 0,8 x 126 öre/kWh | 201 öre/kWh | ||
Household customers SE4 | 0,8 x 129 öre/kWh | 204 öre/kWh | ||
Electricity support – Round 3 | Business owners and legal entities SE3 | 50 öre/kWh (max. 20 MSEK) | 125 öre/kWh | Oct 21 – Sep 22 |
Business owners and legal entities SE4 | 79 öre/kWh (max. 20 MSEK) | 154 öre/kWh | ||
Electricity support – Round 4 | Electricity-intensive businesses SE1–SE4 | See Equation 1 | – | Oct 22 – Dec 22 |
Natural gas support – Round 5 | Household consumers connected to the West Swedish gas network | 79 öre/kWh | – | Nov 22 – Dec 22 |
* 1 öre = 0.01 SEK
Equation 1: Calculation of electricity support round 4 (electricity-intensive businesses)
Besides the introduction of support schemes, Energimyndigheten also ran a campaign to inform customers of various ways to save electricity called “Every kilowatt hour (kWh) counts”. The campaign was launched in October 2022 and presented different measures that households could take to save electricity, such as changing light bulbs to LED lights and lowering the thermostat. The campaign also included information on the load curve and peak load hours to encourage more consumers to use electricity during low load hours to flatten the load curve. The campaign also explained the importance of electricity savings linked to the high electricity prices caused by the war in Ukraine.
Lastly, the government also introduced state credit guarantees for loans to electricity producers in September 2022. A total of 250 billion SEK was dedicated to the guarantee scheme, and a single guarantee covered up to 80% of the loan, with the bank covering the remaining share. The last day for applying was in September 2023, and the credit guarantee scheme was never utilized.
9.2 Competitiveness and the functioning of the market
9.2.1 Competitive landscape
With no licence required to be an electricity retailer in Sweden, there are no specific entry barriers due to the ambition of a free market, creating a highly competitive market. There are currently around 150 electricity supply companies in the Swedish market,
As shown in Figure 9‑1, the survey shows that there are a few large electricity supply companies with larger market shares, and 19 retailers with a market share above 1%. The three largest supply companies have a combined market share of 36%. Using the results from our Swedish household survey, we estimate the Herfindahl-Hirschman index of the retail market to be 0.07, indicating low market concentration and a high degree of competition.
Figure 9‑1: Market shares of the ten largest retailers (Sweden)
Note: The market shares are estimated from a survey conducted amongst Swedish households in October and November of 2023. The shares are weighted. N=772.
According to several of the interviewers, the end-customer market has well-functioning competition, as there is a variety of available contract types and electricity retailers. Moreover, high prices have affected demand and supply, and thus the price mechanism has worked as planned, as its purpose is to create an equilibrium between supply and demand and to steer scarce resources to the highest economical value. Increasing prices are also supposed to stimulate the development of new supply and production, which has been less efficient. Possible measures to address the deficient link between new electricity production and high prices are overseeing the permit process to shorten permit processing times or monitoring the market mechanisms to achieve more new production in the short term.
9.2.2 Contracts and prices
According to our survey, 74% of respondents indicated that they could find at least one contract aligned with their needs and preferences, while 24% did not know if the available contract types met their needs. For those who did find at least one relevant contract, 19% found just one, 28% found two or three, and 27% found more than three.
The most prevalent electricity contract among Swedish households is a variable-price contract at 53% of respondents (Figure 9‑2). Fixed-price contracts also showed to be relatively common, being the second most common contract with a share of 23%. A possible explanation of the high prevalence of variable-price contracts is that the meter reading collection period for households is monthly in Sweden. For electricity retailers, the risk reduces if the settlement period is the same as the measurement time resolution and matched prices, meaning that customers often have a variable price based on an average spot price. Additionally, fixed-price contracts have existed on the market for a long time, and customers tend to stay with contract types that are familiar. During the last year, and with the new generation of smart meters, more customers have also signed spot-price contracts with hourly measurements and spot prices.
Moreover, a major challenge for electricity retailers in general regarding offering different contracts is the many regulations that control how and when they must inform customers related to products and offerings, often related to the invoice. This includes having to inform customers of price information at least 60–90 days before expiration of a contract that automatically renews as a fixed-term contract, which makes it difficult for the electricity retailer to give an accurate price for the delivery period. Furthermore, this also hinders the development of new products that are more complex than the ones offered today, as the increased complexity of a new product would be difficult to correctly present on an invoice according to the regulations on the information that must be included.
Figure 9‑2: Contracts (Sweden)
Note: The contract shares are those reported by respondents in a survey conducted amongst Swedish households in October and November of 2023. The shares are weighted. N=772.
In the survey, we assessed households’ awareness of the pricing details in their contracts (Figure 9‑3). For spot-price contracts as well as variable-price contracts, customers typically have an additional surcharge per kWh, whereas in fixed- or variable-price contracts, this surcharge is typically integrated into the overall pricing structure. In addition to the surcharge, some households may pay a fixed monthly fee. In the survey, most respondents with a spot-price contract reported paying a surcharge per kWh of between 1 and 5 öre. At the same time, the survey reveals that a large proportion of respondents (54%) were not aware of the surcharge they are charged.
Figure 9‑3: Per kWh surcharge in spot price contracts (Sweden)
Note: Surcharge per kWh for respondents with a spot price contract. In Swedish öre with 1 öre = 0.01 Swedish kroner. Survey conducted in October and November of 2023 amongst Swedish households. N=105.
For fixed-price contracts, the spread of results tends to be more evident compared to spot prices (Figure 9‑4). In the survey, 34% of respondents reported a price range of 50–100 öre per kWh, and 18% reported a range of 100–150 öre. Additionally, 3% reported prices as high as 200–300 or more than 300 öre. The survey also shows that, similarly to the awareness of surcharge in spot-price contracts, many are unaware of their price information: Almost 30% of respondents expressed uncertainty regarding their pricing. Household customers did, however, express a higher awareness of the price in their fixed-price contracts compared to variable- and spot-price contracts.
Figure 9‑4: Per kWh price for fixed price contracts (Sweden)
Note: Price per kWh for respondents with a fixed price contract. In Swedish öre with 1 öre = 0.01 Swedish kroner. Survey conducted in October and November of 2023 amongst Swedish households. N=181.
For variable-price contracts, the spread of results has some similarities to the results for fixed-price contracts. A high share of respondents (31%) reported a price range of between 50 and 100 öre per kWh, although fewer respondents (7%) reported a higher price range of 100–150 öre. Additionally, only around 1% reported higher price ranges of 200–300 öre or more than 300 öre. Pricing awareness is also lower compared to fixed-price contracts, as 45% of respondents reported not knowing their price. This can possibly be explained by the price changing each month depending on the average spot price of the month; as a result, many customers may be unaware of the price changes that occur or what their average price is.
Figure 9‑5: Per kWh price for variable price contracts (Sweden)
Note: Price per kWh for respondents with a variable price contract. In Swedish öre with 1 öre = 0.01 Swedish kroner. Survey conducted in October and November of 2023 amongst Swedish households. N=416.
9.2.3 Impacts of the energy crisis
Many electricity retailers have had to rapidly change business strategies to follow the volatile market and oversee hedging strategies to keep being able to provide secure products that are still economically feasible agreements for the business. It has been challenging to understand both the price fluctuations and the changing behaviour pattern of customers, creating difficulties around risk and hedging management. Many electricity suppliers have also experienced significant difficulties and challenges regarding the fundamentals in the market, as described more in detail below.
Moreover, electricity suppliers have experienced a significant increase in the number of calls and complaints received by customer service. Many complaints concerned irritation at high prices, the cessation of fixed-price contracts by some electricity retailers, and wanting advice regarding how to handle the situation. When prices started to fall, many customers also wanted to revert to flexible monthly contracts and leave their high-priced fixed-price contracts. During the interview study, it was also found that some electricity retailers have experienced a small movement of customers switching from smaller retailers to larger retailers that are more well-known and established, due to these electricity retailers being perceived as more trustworthy. However, this shift only applied to a small share of customers, and many did not change. Additionally, electricity retailers experienced a major trend of increasing demand for hourly electricity contracts.
Availability of fixed-price contracts, or contracts with fixed-priced elements
Throughout the energy crisis, fixed-price contracts have always been available to customers in the Swedish electricity market. However, prices have increased significantly due to the volatile market, and many electricity retailers have experienced difficulties with offering these contracts at an attractive price level, leading to a reduced supply of fixed-price contracts.
The volume risks and financial risks have also differed for electricity retailers of varying sizes. Electricity retailers with both production and supply of electricity have found it somewhat easier to manage their risks and hedging requirements. However, all electricity retailers have had to rapidly change their hedging strategies and oversee their overall business strategies to adapt to the volatile market while still being able to offer safe and high-quality products to their customers.
There have also been challenges regarding other types of contracts, such as hybrid products made up of partly fixed prices and partly flexible prices. Many electricity retailers have expressed challenges regarding the right to charge early termination fees if customers break their contract before its expiration date for these kinds of products. Not being able to charge such fees significantly increases the risk for electricity retailers that offer these contracts, thus reducing their ability and willingness to offer them.
For fundamental reasons, electricity production that is becoming more weather-dependent makes the market price more volatile, which in turn affects the cost of hedging and increases the risks around volume, profile, bidding, and pricing. This situation has led to increased challenges regarding hedging strategies and risk management, as volume and price hedging must be managed simultaneously. In turn, this has led to many electricity retailers being unable to continue offering fixed-price contracts, while others have had to rapidly change their strategies and significantly increase prices to keep being able to do so. For those fixed-price contracts that have been available on the market, their prices have in many cases been too expensive and exceeded the customer’s willingness to pay, causing demand for them to plummet.
Other challenges with offering fixed-price contracts include fundamental challenges of transmitting electricity to the south of Sweden, which has led to even higher volatility in the south and a low supply of fixed-price contracts, especially in SE4. Many electricity retailers have been reluctant to offer fixed-price contracts in this area due to the increased risk involved.
Fundamental challenges with market liquidity were also highlighted during the interviews in relation to both the Nasdaq and the EPADS. There were also worries about even lower liquidity in the market in the future when the exchange is sold from the Nasdaq to the European Energy Exchange and the earlier “system price” will be replaced with new prices per price area. Electricity retailers were also worried that it would become even harder to offer fixed prices to customers in SE4.
9.3 Customer awareness and satisfaction
District heating is the most important source of heating for 34% of households in Sweden. Heat pumps are the second most important source of heating. Electricity is the third most important source, at 23% of households (Figure 9‑6), although 26% of households do not know their electricity consumption per year (Figure 9‑7). Of those who do know their consumption, the electricity consumption per year is generally low.
Figure 9‑6: Most important source of heating (Sweden)
Note: Price per kWh for respondents with a variable price contract. In Swedish öre with 1 öre = 0.01 Swedish kroner. Survey conducted in October and November of 2023 amongst Swedish households. N=416.
Figure 9‑7: Household electricity consumption per year (Sweden)
Note: The graph the reported yearly electricity consumption. Survey conducted in October and November 2023 amongst Swedish households. N=772.
9.3.1 Awareness during search and switching
Among the respondents, 48% had engaged in either switching or comparing electricity contracts in the preceding 12 months (Figure 9‑8). Statistics provided by SCB (Statistics Sweden) show that generally around 10% of customers had an assigned price contract in 2021; in 2022, this share decreased to around 9% and continued to decline even further, reaching an all-time low of just under 7% in 2023.
Figure 9‑8: Share of consumers active in the electricity market last 12 months (Sweden)
Note: The graph shows the share of respondents who have either switched or compared electricity contracts during the previous 12 months. Survey conducted in October and November of 2023 amongst Swedish households. N=772.
In the survey, the most prevalent challenge in switching or comparing contracts – experienced by 22% of respondents – refers to difficulties in comparing contracts and terms. This was followed by difficulties in differentiating between contracts at 18% (Figure 9‑9). Additionally, difficulties in understanding contract terms and conditions were experienced by 14% of respondents. Few respondents answered that they had challenges regarding finding information, relevant contracts or sellers, or challenges when switching contract. This reinforces the extent to which this is a well-functioning market where most electricity retailers adhere to regulations and work to inform customers and make information easily attainable. Moreover, it shows how the electricity market in general is a difficult market to understand. As noted during the interviews, many customers find it difficult to understand different contracts – even after becoming more informed during the energy crisis – due to the complexity of the market.
Figure 9‑9: Challenges in switching or comparing contracts (Sweden)
Note: The graph shows the percentage of respondents who have recently switched or compared contracts that experienced challenges when doing so. Multiple choices were allowed. Survey conducted in October and November 2023 amongst Swedish households. N=246.
Among the respondents, 45% reported feeling well-informed, while 17% felt somewhat informed when it came to switching or comparing contracts (Figure 9‑10). Conversely, less than 5% expressed feeling poorly informed in these situations. This may suggest that the respondents were able to grasp the necessary information to make an informed decision, but that the process may be unnecessarily difficult and time-consuming. It also emphasizes the large share of fair electricity supply companies who keep their customers well-informed of new agreements.
Figure 9‑10: How informed respondents felt when switching or comparing contracts (Sweden)
Note: The graph shows how well-informed respondents who have recently switched or compared contracts felt. Survey conducted in October and November of 2023 amongst Swedish households. N=365.
Among the respondents, a majority of 69% stated that there was little to save from switching as a reason for not switching (Figure 9‑11). This shows how the market features well-functioning competition among electricity retailers, with a wide range of competitive contract alternatives available on the market. In comparison, few respondents stated that they did not switch contract due to information being hard to find or because the process seemed complicated. Again, this supports the results of few respondents feeling poorly informed when comparing or switching contracts, or few experiencing challenges regarding finding relevant information on contracts or supply companies. Altogether, the results highlight efficient competition and high transparency on the electricity market regarding information provided by electricity retailers to customers about contracts.
Figure 9‑11: Reason for not switching after comparing contracts (Sweden)
Note: The graph shows why those who have compared but not switched contract, ultimately chose not to switch. Survey conducted in October and November of 2023 amongst Swedish households. N=119.
The survey results show that the majority of respondents (68%) choose not to switch or compare contracts more often because they are satisfied with their current agreement (Figure 9‑12). The second most prevalent reason for not switching more often was the perspective that switching offers low potential for savings. This further supports the sense of efficient market competition regarding available contracts and price alternatives. Furthermore, it shows how electricity retailers have generally offered contracts that were competitive at a reasonable price level during the energy crisis despite high price increases, as most customers were still satisfied with their contracts and did not see potential for savings if they were to switch.
Figure 9‑12: Reason for not switching or comparing contracts more often or at all (Sweden. Multiple choices allowed)
Note: The graph shows why those who have not compared or switched contracts within the last 13 months, have not done so more often. Survey conducted in October and November of 2023 amongst Swedish households. N=355.
According to statistics from SCB (Statistics Sweden), almost 65,000 households switched electricity retailer in September 2022, compared to around 40,000 households in September 2023,
SCB, 2023, Byten av elleverantör (elhandelsföretag)
Win-back sales are not as commonly employed by electricity retailers in Sweden, with only 24% of consumers reporting in the survey that they were contacted by their previous supplier after switching to a new one (N = 131). Among these, 19% accepted their former supplier’s offer. This may be an indicator of a highly competitive market in which electricity retailers have little room to lower their prices with the aim of winning customers, as well as a low possibility of savings since many retailers have similar price offerings.
Figure 9‑13: Context for switching contract (Sweden)
Note: The graph shows the context for having switched contract. Survey conducted in October and November of 2023 amongst Swedish households. N=246.
Regarding the motivation for switching contracts, a majority of over 60% of respondents stated having switched for reasons other than better prices, negative experiences, or access to new services. This aligns with the results of a large share of respondents also having another context for switching contract than moving house, seeking a new contract, or being contacted by a seller. During the interview study, many actors expressed having experienced a customer shift from small retail companies towards larger, more well-known companies, and this may be an explanation for certain contract switches that fall into this category of “other”. From another perspective, it may also be connected to many respondents having switched contracts because of moving houses, which would make the main reason for switching something other than better prices, negative experiences, or access to new services. This would also align with the results of there being many electricity suppliers with a small market share (Figure 9‑1), indicating a large share of local retailers; when a customer moves, they may therefore have to switch contract, as their previous retailer is not active in the area to which they are moving.
The Nordic Customer Survey 2022 conducted by NordREG explored rationales for signing new electricity contracts.
After “other” motivations for switching contracts came better price (29%). Very few switched due to having a negative experience or to gain access to new services. This emphasizes how most electricity retailers offer fair contracts and good customer service, while the market remains competitive regarding price levels. That said, the share respondents switching because of better price is still relatively low, and this is consistent with the previous findings of few respondents experiencing high possibilities of savings from switching contracts. Other reasons included in the customer survey were, for example, wanting access to green contracts and wanting a local supplier, which are not included in this survey either and could be reasons among the respondents who answered “other”.
Figure 9‑14: Main motivation for switching (Sweden)
Note: The graph shows the respondents main motivation for having switched contract. Asked to those who reported having switched contracts within last 12 months. Survey conducted in October and November of 2023 amongst Swedish households. N=246.
The survey also examined how different information sources matter when switching or comparing contracts. It was found that the two most important sources when comparing contracts were online comparison tools and internet searches (Figure 9‑15), whereas for switching contracts, the two most important sources were online comparison tools and other sources, followed by internet searches as the third most popular reason. Again, this concurs with the results of a high share of active customers, with many actively using internet searches and available comparison tools to research contracts. It also highlights the important role of available online comparison tools. Appreciation for the online tools was also expressed during the interview study by most actors. Actors also stated that many customers express appreciation regarding elpriskollen.se being a state-owned comparison tool and one that increases trust for customers regarding high transparency. Furthermore, recommendations were seen as more important when switching contracts than when comparing them. This points to recommendations being another possible “other” reason for switching contracts.
Figure 9‑15: Most important source of information when switching or comparing contracts (Sweden)
Note: The graph shows the most important source of information the last time the respondent switched or compared contracts. Survey conducted in October and November of 2023 amongst Swedish households. Switched contracts: N=162. Compared contracts: N=119.
9.3.2 Customer awareness and demand for different contracts
There is a broad consensus that the general customer awareness and demand for different contracts have increased in the wake of the energy crisis, which can also be seen from the household survey results. Customers have been more inclined to understand their own contractual situations and the possibilities to act on sudden increases in electricity price to reduce the potential impact on their (for many, already strained) household economy. Previously, when the electricity price was low, customer inactivity had no real effect on the household’s economy; almost overnight, pricing increases forced customers to quickly educate themselves. Customer services recognized this shift by the average customer calling being more concerned but also more well-informed. However, some customers still have difficulties in understanding the difference between a DSO and a retailer, highlighting the need to further inform and build knowledge and understanding. The energy crisis placed the electricity retailers and the energy industry in a position to focus on understanding their customers and further educate them around what a retailer does and how the market works. This even applies to media outlets, which sometimes have a low level of understanding themselves, which creates unnecessary intimidation and concern among customers. Ultimately, however, the energy crisis has raised the general customer level of knowledge and understanding, and thus customer awareness of the electricity industry as a whole.
Although the energy crisis has caused customer movement on the electricity market, the customer base is fundamentally slow-moving. Previously, the average customer did not change retailer even if they would benefit from doing so. As a result, electricity retailers have not seen the level of customer losses that they feared even when the crisis was at its worst.
Nonetheless, the energy crisis has generated some market movement. In general, this movement can be divided into two categories. The first category was those customers who left a smaller retailer company for a larger well-known one. The primary reason for this shift was a feeling of security and trust, of moving to a safe haven during the crisis. The second category was those customers actively looking for ways to reduce their electricity cost and take control over their electricity consumption. Most customers within this category signed up to hourly based contracts. Although these contracts became very popular, electricity retailers recognized that the average customer did not fully understand what was required of them to be able to optimize their own electricity consumption and thus benefit from this type of contract.
Furthermore, many variable electricity products and contracts are becoming so advanced that it is also difficult for the electricity retailers to explain how they work to the customer. This makes it even more difficult for customers to navigate the products and contracts being offered by electricity retailers. On the other hand, some retailers argue that the average customer should not need to understand how a contract works behind the scenes and that those customers should rely on fixed-price contracts.
According to many actors, industry transparency is of great importance and revolves around creating trust and security for the customer. The existing strict regulations and measures seek to increase transparency through requirements of what information needs to be included in customer invoices. However, customers often do not understand or read this information, which creates challenges for suppliers wanting to develop more complex products, while also hindering the suppliers from helping customers understand their contracts and prices. Actors expressed that preventative work – with a focus on communicating questions such as the customer’s electricity consumption, what can affect their consumption, what can affect their prices, and actions they can take to influence their price – is key to increasing transparency and boosting customers’ understanding. This also falls in line with the household survey results, where electricity consumption and cost breakdown were the most read items on invoices, indicating how customers are becoming more interested in how their own behaviour affects their prices.
9.3.3 Invoicing and billing
A high share of respondents of the household survey receive their electricity bills electronically, while some receive them by post (Figure 9‑16). The information most read on the invoice among the respondents is their estimated annual and/or historical consumption (44%), followed by cost breakdown (35%; Figure 9‑17). Reviewing information regarding changes that may affect their electricity price is also relatively common (20%). Only 10% of respondents read no information at all, indicating that most customers are interested in their invoices and electricity costs, which also supports the sense of a high level of active customers and increasing customer awareness.
Additionally, the results highlight how few respondents read the information regarding their contract expiry date. In the interview study, it was found that during the crisis, automatically extended fixed-price contracts were a prevalent challenge among customers. This points to how even though customer awareness is increasing, this awareness is generally increasing around cost and price information as well as electricity consumption, but not around terms and conditions and contract expiry dates. A reason for this may be that customers generally became interested regarding solutions for how they could lower their electricity consumption to lower costs during the crisis, hence their following the cost breakdown and electricity consumption data more thoroughly.
Figure 9‑16: How electricity bill is received (Sweden)
Note: The graph shows how respondents receive the bill from their electricity supplier. Survey conducted in October and November of 2023 amongst Swedish households. N=772.
Figure 9‑17: What information respondents read on their invoice (Sweden. Multiple choices allowed)
Note: The graph shows the fraction of respondents that report looking for each type of information on their bill. Multiple choices allowed. Survey conducted in October and November of 2023 amongst Swedish households. N=772.
Regarding how customers wish to receive information about changes to their electricity contracts, 64% of respondents answered that they prefer to receive it via email (Figure 9‑18). The second most preferred method of receiving information was through a separate letter (34%), followed by as an attachment to the invoice (25%).
Figure 9‑18: Preferred method of being notified of changes to the electricity contract or other aspects that may affect the customer (Sweden. Multiple choices allowed)
Note: The graph shows the methods by which respondents prefer to be notified of changes by the electricity seller that may affect the customer, for example changes to the electricity contract. Survey conducted in October and November of 2023 amongst Swedish households. N=772.
9.3.4. Customer satisfaction
The general view on customer satisfaction is that customers are satisfied with their electricity retailers. There has been a long period of low electricity prices to which customers have become satisfied. However, electricity retailers say that average customer satisfaction levels declined just after the turn of the year 2022 and pointed to major differences in customer satisfaction between those customers who had signed a fixed contract before the crisis, those who had not, and those who were inactive and received automatic renewals of previous fixed contracts; in essence, customer satisfaction greatly correlates with price. Customer satisfaction also differs between larger and smaller electricity retailers. In general, larger electricity retailers enjoy greater trust by their customers. Electricity retailers are also referred to as either a serious or an unserious actor. The common ground for those so-called unserious actors (see Retailer requirements under Appedix A for information about list of unserious actors) is their customer acquisition process and the use of telemarketing, which is seen as aggressive, and customers are feeling pressured to sign up for something that they do not really want. Once they wish to cancel, it is difficult to get hold of these companies. Altogether, this creates a bad experience; when the energy crisis hit, this feeling of dissatisfaction was further amplified. As a result, many larger companies were regarded as a safer choice during the crisis, as stated during the interviews.
This shift in customer satisfaction was also noted in the calls to customer services across the entire energy industry. Customer service departments have been under great pressure during the energy crisis, primarily due to the sheer increase in number of calls, but also due to that fact that the average customer who called in had more informed questions and concerns, making the individual call longer. The calls were evenly distributed across Sweden, with no real difference between electricity areas. Much of the customers’ frustration was also related to not being able to reach customer service.
Another challenge for customers was the automatic extension of fixed-price contracts, which also became more evident during the energy crisis. Before the crisis, inactivity among customers with fixed-price contracts rarely led to a drastic change in their electricity price. However, with the highly volatile prices during the crisis, customers suddenly experienced a large increase in their electricity price when their contracts were automatically renewed, without being able to break the contract.
Moreover, a perception exists among some customers that electricity prices are not controlled by the electricity retailers and that high prices are beyond their control. Customers’ frustration is thus directed towards the electricity market as a whole or towards politicians instead, as the perception is that the high prices are their responsibility and not controlled by the electricity suppliers. This shows how the complexity of the electricity market makes it difficult to understand for the customer, and why frustration may not always be directed towards the actors responsible.
Approximately 40% of respondents reported having negative experiences with their retail supplier, and 30% reported negative experiences not related to price. In the household survey, respondents who had a negative experience with their electricity retailer were asked to state the context of their negative experience. By a clear majority, the most common negative experience was higher-than-expected prices, followed by the invoice being difficult to understand (Figure 9‑19). Other negative experiences were far less prevalent among the respondents. Combining this with the finding of most customers feeling well-informed when switching or comparing contracts as well as being satisfied with their current contract and finding low potential for savings when switching contract, a conclusion can be drawn that customer satisfaction remained high even in the face of high prices and the electricity retailers all experiencing the same price increase. Although customers were dissatisfied with the high prices, they still experienced being fairly treated and receiving fair contracts.
Figure 9‑19: Negative experiences with electricity seller (Sweden. Multiple choices allowed)
Note: The graph shows the fraction of respondents that reports a negative experience with their electricity provider during the last two years. Multiple choices allowed. Survey conducted in October and November of 2023 amongst Swedish households. N=772.
In response to a negative experience, 40% of respondents answered that they took no action; 25% complained to the seller, and 18% switched supplier (Figure 9‑20). As previous results have shown, many customers compared contracts but not as many have switched, mainly due to being satisfied with their existing contract and finding low saving potential. These results align with many respondents taking no action after a negative experience. Respondents may have researched contracts and made comparisons, but they ultimately concluded that their current contract was still adequate and competitive, hence their decision not to act even if they pursued research or comparison.
Additionally, 33% of respondents complained to either their electricity supplier or to an authority, which falls in line with the increase in complaints expressed by the actors during the interview study.
Figure 9‑20: Consumers’ response to a negative experience (Sweden. Multiple choices allowed)
Note: The graph shows action taken by consumer in response to a negative experience. Survey conducted in October and November of 2023 amongst Swedish households. N=248.
Impacts of energy crisis
Many households have expressed concern with the electricity price development and its impact on their household economy. The primary consumer response has been to seek answers on how to cope with the situation and energy-saving tips. The level of concern further increased when many electricity retailers withdrew the availability of fixed-price contracts, leaving many customers feeling exposed to circumstances beyond their control. On the contrary, those who managed to sign up to a fixed-price contract at the height of the crisis wanted to cancel when prices started to fall. In general, however, the high electricity prices led to those who could limit their electricity consumption doing so, and many were prepared to make lifestyle changes accordingly. This transition is also obvious in the number of hourly rate contracts that were signed as a possibility to gain greater control over costs.
From a retailer perspective, the main challenge has been to understand the fluctuations in electricity price and customer behaviour. Before the retailer and consumer market felt the consequences of the energy crisis, the electricity traders/purchasers experienced turmoil even earlier, which resulted in changes in valuation of risk factors and price hedging to be able to continue to deliver the same products. As a result, and especially from a competition perspective, the various actors’ movements, and responses to changes in the market is rather what one would expect to happen in a competitive marketplace; from a purely competitive perspective, the energy crisis is not referred to as a crisis, but as a marker of a well-functioning energy market.
Another widely discussed topic during the energy crisis was customers expressing unfairness regarding price differences and varying treatment between electricity price areas. At the beginning of the crisis, many customers in the south of Sweden expressed dissatisfaction regarding extremely high prices, as highlighted in the media. During the first round of electricity support, there was then much dissatisfaction and frustration from customers in other areas for the support only being directed towards the south. There were also complaints among business customers as the support was initially only directed towards household customers.
Before the energy crisis, much of the focus by customer bureaus and authorities was directed towards handling challenges regarding unfair electricity suppliers, even though they represented a small share of the market. The large focus on a small market share of unfair electricity suppliers is an indicator that the rest of the market was functioning well, with satisfied customers and companies acting according to regulations and striving to create attractive products for their customers. During the crisis, the dissatisfaction from customers shifted more towards the high electricity prices, and unfair electricity traders received less focus.