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Reuters

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Sweden's biggest utility Vattenfall and a group of large industrial firms will jointly explore investments in new fossil-free power production to meet growing electricity demand amid decarbonisation efforts, the companies said on Tuesday.

"We have known for quite a while that there is a steep increase in demand in order to electrify directly or indirectly the industries as part of the green transition," Vattenfall CEO Anna Borg told Reuters.

Together with Industrikraft - a group consisting of Alfa Laval, Boliden, SKF, Stora Enso and the Volvo Group - Vattenfall is looking into how, when and what they could invest together, and the magnitude this would take, she added.

Annual Swedish power demand is expected to double from currently 140-150 terawatt hours (TWh) by around 2045, as Sweden heads into the next phase of industrial development, requiring hundreds of billions of Swedish crowns in investment, Borg said.

"I think it's very important that the timing of the investments in the industry and in the energy production is somewhat aligned because that is what's going to be needed in order for everybody to be competitive and profitable," she said.

Fossil-free generation includes nuclear, wind and solar power, each of which face their own challenges in terms of costs or grid connection, the Vattenfall CEO added.

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