(Bloomberg) -- A red brick building with a grey cooling tower in Malmo’s northern harbor has become a symbol of Sweden’s preparations for an uncertain future.

The mothballed power plant near the Oresund straits was set to be dismantled and shipped to new owners overseas. Then the war in Ukraine upended the country’s defense policy, and is now forcing a rethink of energy security plans. 

With its capital closer to St. Petersburg than Berlin, the Nordic nation of 10 million people has been on edge since Russia’s annexation of Crimea a decade ago. But faced with an increasingly emboldened Vladimir Putin, NATO’s newest member says it has to be ready if the conflict spreads through the Baltics.

Sweden’s grid operator wants the facility in Malmo operational again so that it can keep the lights on in the country’s third-largest city in the event of blackouts following an attack on national energy infrastructure. 

“Hopefully, we won’t end up in a situation where we use these capabilities,” said Mikael Nilsson, the plant’s manager. “But to have the assurance that we’re there and ready when needed is really comforting.”

Read more: How Russia pushed Sweden to join NATO

In addition to strengthening its military, which was downsized after the Cold War as Sweden bet on a peaceful future, the country needs to upgrade ports, roads, rail networks, hospitals and shelters.

Its energy supply — a mix of nuclear, hydro and wind — is particularly vulnerable, because of geography. 

Some 16,000 kilometers (9,942 miles) of power lines that help connect production in the north with the main cities in the south cut through dense forests covering about two thirds of the landscape.

That leaves the grid more open to sabotage than those in many other European nations and Sweden must be prepared for disruptions, according to Vera van Zoest, associate senior lecturer at the Swedish Defence University.

“Critical infrastructure, like for example the electricity grid, is often a main target in times of war,” van Zoest said.

She cited Ukraine where Russia has damaged more than half its neighbor’s energy facilities since the full-scale invasion in Feb. 2022, according to the World Bank, plunging cities into darkness and depriving people of water and heating during harsh winters. 

An expansion of the battlefield across Europe isn’t the only concern, though. The mysterious attacks two years ago on the Nord Stream gas pipelines that sent prices soaring highlight the dangers of hybrid warfare, including so-called false flag attacks or others with plausible deniability.

Read more: what is hybrid warfare, and is Russia employing it?

“No one knows how much time we have,” said Civil Defense Minister Carl-Oskar Bohlin, adding that making improvements is all the more urgent because southern Sweden has one of the largest gaps between consumption and production capacity in Europe.

By the end of 2028, some 1,000 skilled Swedes should be on call to help protect energy supply as part of compulsory civic duty — a form of national service suspended after the Cold War and reintroduced this year. Stronger fences will be built and monitoring enhanced. 

And Malmo won’t be the only city able to operate independently of the grid. Grid operator Svenska Kraftnat says it has plans in place for the capital, Stockholm as well as Goteborg and key regions.

“It’s about building up the ability to carry on as usual in times of crisis,” said the operator’s Chief Security Officer, Erik Nordman.

Overall, the government allocated about 5.5 billion kronor ($510 million) in the 2024 budget to civil defense, almost three times as much as in 2021, the year before Moscow sent tanks to Ukraine. It topped up the funding in mid-April with an extra 385 million kronor.

But that still falls short of the 10 billion kronor that the Swedish Civil Contingencies Agency estimates the country needs annually just to start to get off the back foot.

“It doesn’t matter how strong the military becomes — if we don’t get the support we need from civil defense we won’t be able to do what is required,” said military commander-in-chief Micael Byden. “This is an extensive job.”

The challenges aren’t unique to Sweden and President of the European Commission, Ursula von der Leyen, says other countries should be more like Finland — which shares a border with Russia and over the decades has built up and maintained robust civil defense infrastructure, while also teaching civilians how to act in a national emergency. 

Swedish Prime Minister Ulf Kristersson has already taken note.

“We are learning a lot from what is happening in Ukraine, for reasons that are very sad,” he said during an April 23 press conference with Finnish President Alexander Stubb. “For more positive reasons we are also learning from Finland, not least when it comes to preparedness and civil defense.”

Malmo’s 450-megawatt plant is fired by gas but can also burn diesel, and is owned by German energy giant Uniper SE. It shut down the facility in December 2016 after power prices plunged too much to turn a profit then sold it in 2021 to Dutch company PACO Holding.

Last year, as Russia was ramping up naval activity in the Baltic and gaining the upper hand in Ukraine, Svenska Kraftnat ordered Uniper to back out of the sale and put the plant on standby until the end of the decade.

By way of compensation, the grid operator offered as much as 1.1 billion kronor — in one of the state’s first, and largest, investments in energy security since Russia’s war in Ukraine started.

During a recent visit to the power plant, which was built in 2009, manual dials, wheels, cables and pipes crisscrossing the building, appeared in pristine condition, but parts were still covered in scaffolding. 

Work on firing up the site — called Oresundsverket after the nearby straits that act as a gateway to trade routes in the Atlantic — will intensify after the summer when new turbine blades costing tens of millions of kronor will be installed. It will be fully operational in 2025.

Nilsson said he expects the plant will continue to offer its service to the power market  beyond the end of the decade, when the grid manager’s order expires. “I don’t see any of the requirements on security of supply diminishing,” he said, adding, “on the contrary.”

©2024 Bloomberg L.P.