Wedoany.com Report-Nov. 11, German utility Uniper (UN0k.DE) announced on Monday that it will mothball its 335-megawatt Karlshamnverket 2 oil-fired power plant in southern Sweden after the expiration of a winter back-up power supply agreement. The decision will take effect on November 16 and follows the cancellation of Sweden’s strategic power reserve procurement by transmission grid operator Svenska kraftnaet (Svk) in October.
Uniper logo is seen in this illustration taken, May 1, 2022.
Uniper stated that the cancellation left the Karlshamnverket 2 unit without any long-term contracts and that current market conditions do not support continued commercial operation. The company emphasized that without contractual or economic incentives, maintaining operations was no longer viable.
Henrik Svensson, the manager of the Karlshamn power plant, said: “This is of course not the direction we want to see for Karlshamnsverket.” He added that Uniper believes the closure will negatively impact the adequacy of Sweden’s power system. The southern part of the country often experiences higher electricity demand than available supply, making it more vulnerable to power shortages during peak periods.
Mothballing the Karlshamnverket 2 unit means the plant will be preserved and adapted for long-term inactivity. Uniper noted that it will maintain close communication with the Swedish government and relevant authorities to explore potential solutions for the plant’s future. The company stated that its focus remains on ensuring system stability and maintaining readiness for possible reactivation should future needs arise.
The Karlshamn power station consists of three blocks. Block 1 was permanently closed in 2015, while Block 3, also with a capacity of 335 megawatts, continues to operate normally for now. However, Uniper highlighted that a sustainable long-term operational framework must also be established for Block 3 to ensure reliability and efficiency going forward.
The Karlshamn facility has historically served as a key reserve power source during periods of high electricity demand or system strain, particularly in winter months when renewable generation fluctuates. Its temporary withdrawal underscores the challenges Sweden faces in maintaining sufficient backup capacity amid the transition toward more variable energy sources.
Uniper’s decision aligns with broader market adjustments across Europe, where shifting power demand, evolving grid requirements, and the changing economics of energy generation are prompting companies to reassess the viability of certain assets. The company’s ongoing dialogue with Swedish authorities aims to identify practical options that balance grid stability with environmental and economic objectives.
The development marks another step in the ongoing restructuring of the Nordic energy landscape as operators adapt to changing market frameworks, energy mix priorities, and regulatory conditions.
