The global situation remains unstable. Multiple conflicts are concurrently underway, and in an increasingly interconnected global economy this is also affecting us. In Europe, the consequence of Russia’s invasion of Ukraine is obvious. The security situation in Europe is now deemed to be the worst since the Cold War. The challenges also extend beyond the geopolitical situation; according to Mario Draghi’s competitiveness report, Europe is losing its competitiveness. The EU is facing the enormous challenge of successfully implementing its “green deal” while strengthening its competitiveness, particularly against the USA and China, where carbon emissions are less costly. Further, the increased risks of imposed trade tariffs create additional uncertainty in global trade. Trade conflicts between major economies risk disrupting supply chains, increasing business costs, and reducing growth in the global economy. 

This is our new reality. As a Swedish energy company, we need to raise our sights, closely monitor developments in the surrounding world and act accordingly in order to ensure our competitiveness and meet the needs of our customers and society. 

Despite the challenges we are facing, we have made great progress. One of the year’s key events was receiving an environmental permit in March to build one of Europe’s first large-scale bio-CCS plants, at Värtan in central Stockholm. Another milestone was achieved early this year: On 27 January 2025, Stockholm Exergi was the only company to be awarded government support for bio-CSS through a reverse auction. Financing for projects as large as our project at Värtan needs to be based on revenues from voluntary market actors as well as public funding. With this support, along with the agreements we have signed with global actors such as Microsoft and Frontier, we have secured long-term revenues for permanent negative emissions.

We are now moving forward with our project and aim to make a final investment decision during the first half of 2025. This is a historic milestone not only for Stockholm Exergi, but also for Swedish and European climate policy. This initiative is based on sustainable biofuel extraction and the simultaneous production of district heating and permanent storage of biogenic carbon dioxide. We are, of course, also investing in emission reductions. Both are needed, and both are crucial for achieving the Paris Agreement targets. 

Despite the energy markets’ volatility, we have maintained stable and reliable energy deliveries to our customers. With careful planning, investments in our infrastructure and continuous maintenance of our production plants and district heating network, we have ensured that district heating and electricity are available when needed. Electricity production in the cogeneration plants plays a crucial role in balancing Stockholm’s electricity grid, providing energy where and when it is most needed. Our ability to address these challenges demonstrates the strength of the district heating and cogeneration business concept and our capability to adapt to a changing world. 

There was a positive trend for economic development during the year. After a challenging 2023 our financial situation has improved, driven by the stabilization of fuel prices (although still at high levels) and our own efficiency measures. The measures we have taken have produced results, and we are continuing to develop long-term solutions such as bio-CCS to strengthen our competitiveness, future-proof district heating and create the greatest possible climate benefit. During the year we issued our first bond on the Norwegian capital market. The issue broadens our financial base and enables additional strategic investments. 

We have also continued our efforts to improve our customer relationships. Investments in innovative solutions, such as digital platform integration in collaboration with partners, are part of our efforts to optimize energy production while also offering better service to our customers. Even so, the 2024 CSI survey shows that we are facing challenges in terms of customer satisfaction, especially in light of previous price increases. We take this very seriously and are working hard to increase our customers’ confidence in us. 

And I would like to make clear: The district heating industry is under pressure, and many companies across the country are struggling with declining profitability. While cost increases for fuel and power plant materials certainly represent a significant part of the challenges facing the industry, various regulations are a contributing factor. For example, Swedish district heating companies are covered by the emissions trading scheme for waste incineration (Sweden is one of only three EU countries where waste incineration is included in the EU ETS), and also pay the highest energy tax of all Nordic district heating companies. At the same time, Swedish district heating companies contribute electricity output and flexibility to the energy market. We believe that the regulatory regime and market conditions for the district heating industry need to be reviewed. This is also made clear in the Swedish Energy Agency’s report Förslag till en fjärrvärme och kraftvärmestrategi (transl: Proposal for a district heating and cogeneration strategy). The Swedish electrification strategy and the industrial transition currently underway require a strong, well-developed district heating sector that contributes to electricity output and ensures flexibility to manage a volatile energy market.

But nothing comes before health and safety. While the trend over time is clearly positive, with fewer accidents, we failed to achieve our health and safety targets in 2024. The number of accidents increased but were in most cases less serious. In 2025, we will strengthen our efforts to ensure a safe and healthy work environment for everyone.

Looking ahead, I see great opportunities for Stockholm Exergi to maintain its position as a leading actor in renewable energy. We do this by combining district heating, cogeneration, bio-CCS, batteries and gas turbines to meet the needs of our customers and society and create economic growth. Stockholm and Stockholmers need a competitive, reliable, secure, climate-efficient energy supply. Stockholm Exergi is well positioned and will deliver on this. We will be a stable, long-term partner for our customers, and we remain committed to being a leading actor in the green transition.

Anders Egelrud
CEO, Stockholm Exergi