Energy policies of IEA countries : Sweden : 2000 review.

145 Pages·1.894 MB·English

by  OECD

SuèdeA prepaFT 4/09/00 13:12 Page 1
INTERNATIONAL ENERGY AGENCY
Energy
Policies
of IEA
Countries
Sweden
2000 Review
INTERNATIONAL ENERGY AGENCY
Energy
Policies
of IEA
Countries
Sweden
2000 Review
INTERNATIONAL ENERGY AGENCY ORGANISATION FOR
9, rue de la Fédération, ECONOMIC CO-OPERATION
75739 Paris, cedex 15, France AND DEVELOPMENT
The International Energy Agency (IEA) is an Pursuant to Article 1 of the Convention signed in
autonomous body which was established in Paris on 14th December 1960, and which came into
November 1974 within the framework of the force on 30th September 1961, the Organisation for
Organisation for Economic Co-operation and Economic Co-operation and Development (OECD)
Development (OECD) to implement an international shall promote policies designed:
energy programme. • To achieve the highest sustainable economic
growth and employment and a rising standard of
It carries out a comprehensive programme of living in Member countries, while maintaining
energy co-operation among twenty-four* of the financial stability, and thus to contribute to the
OECD’s twenty-nine Member countries. The basic development of the world economy;
aims of the IEA are: • To contribute to sound economic expansion in
• To maintain and improve systems for coping Member as well as non-member countries in the
with oil supply disruptions; process of economic development; and
• To promote rational energy policies in a global • To contribute to the expansion of world trade on
context through co-operative relations with non- a multilateral, non-discriminatory basis in
member countries, industry and international accordance with international obligations.
organisations;
• To operate a permanent information system on The original Member countries of the OECD are
the international oil market; Austria, Belgium, Canada, Denmark, France,
• To improve the world’s energy supply and Germany, Greece, Iceland, Ireland, Italy,
demand structure by developing alternative Luxembourg, the Netherlands, Norway, Portugal,
energy sources and increasing the efficiency of Spain, Sweden, Switzerland, Turkey, the United
energy use; Kingdom and the United States. The following
• To assist in the integration of environmental countries became Members subsequently through
and energy policies. accession at the dates indicated hereafter: Japan
(28th April 1964), Finland (28th January 1969),
* IEA Member countries: Australia, Austria, Australia (7th June 1971), New Zealand (29th May
Belgium, Canada, Denmark, Finland, France, 1973), Mexico (18th May 1994), the Czech
Germany, Greece, Hungary, Ireland, Italy, Japan, Republic (21st December 1995), Hungary (7th May
Luxembourg, the Netherlands, New Zealand, 1996), Poland (22nd November 1996) and the
Norway, Portugal, Spain, Sweden, Switzerland, Republic of Korea (12th December 1996). The
Turkey, the United Kingdom, the United States. The Commission of the European Communities takes
European Commission also takes part in the work of part in the work of the OECD (Article 13 of the
the IEA. OECD Convention).
© OECD/IEA, 2000
Applications for permission to reproduce or translate all or part of this publication
should be made to:
Head of Publications Service, OECD
2, rue André-Pascal, 75775 Paris cedex 16, France.
TABLE OF CONTENTS
1 SUMMARY AND RECOMMENDATIONS ......................... 7
2 CONDUCT OF THE REVIEW .................................... 15
3 GENERAL ENERGY POLICY ..................................... 17
4 ENERGY AND THE ENVIRONMENT ............................. 31
5 ENERGY EFFICIENCY .......................................... 41
6 ELECTRICITY ................................................... 61
7 NUCLEAR AND RENEWABLES .................................. 87
8 OIL, GAS AND COAL .......................................... 97
9 ENERGY RESEARCH AND DEVELOPMENT ....................... 117
A ANNEX: ENERGY BALANCES AND KEY STATISTICAL DATA ......... 135
B ANNEX: INTERNATIONAL ENERGY AGENCY “SHARED GOALS” ... 139
C ANNEX: GLOSSARY AND LIST OF ABBREVIATIONS ............... 141
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Tables and Figures
TABLES
1. Energy and Carbon Dioxide Taxes ................................. 33
2. Energy Taxes on Fuels Consumed by Manufacturing Industry ......... 34
3. Emissions Reductions Attributed to the Swedish Programme for
an Environmentally Adapted Energy System in Eastern Europe ........ 34
4. Variations in Primary and Final Energy Intensities in Sweden ......... 41
5. Variations in Adjusted Final Energy Intensities ....................... 42
6. Unit Consumption and Specific Consumption of Cars in Sweden ...... 47
7. Energy Efficiency Indicators for Road Transport of Goods ............ 47
8. Environmental Targets for the Transport Sector ....................... 53
9. Consumption of Electricity, 1998 ................................... 61
10. Electricity Consumption and Generation, 1998 ...................... 63
11. Installed Capacity on 31 December 1998 .......................... 65
12. Imports and Exports, 1998 ........................................ 65
13. Main Generation Companies in the Nordic Region, including Denmark .. 69
14. Main Distribution and Retail Supply Companies in Sweden,
Norway and Finland ............................................. 71
15. Size of Distribution Companies .................................... 71
16. Operating Nuclear Power Reactors in Sweden ...................... 87
17. Hard Coal Imports, 1978-1998 ................................... 109
18. Target Areas for the Energy Research, Development
and Demonstration Programme .................................... 118
FIGURES
1. Map of Sweden .................................................. 6
2. Ministry of Industry, Employment and Communications ............... 22
3. Energy Production, 1973-2010 .................................... 24
4. Primary Energy Supply, 1973-2010 ................................ 25
5. Total Final Consumption by Fuel, 1973-2010 ....................... 25
6. Final Consumption by Sector, 1973-2010 .......................... 26
7. Carbon Dioxide Emissions by Fuel and by Sector, 1975-1998 ........ 36
8. Emissions of Sulphur Dioxide in Sweden, 1980-1997 ................ 37
9. Emissions of Oxides of Nitrogen in Sweden, 1987-1997 ............. 37
10. Energy Intensity in Sweden and in Other Selected IEA Countries,
1973-2010 ..................................................... 42
11. Energy Intensity by Sector in Sweden and in Other Selected
IEA Countries, 1973-2010 ........................................ 43
12. Total Final Consumption vs GDP in the Transport Sector in Purchasing
Power Parities, 1960-1998 ........................................ 56
13. Electricity Consumption vs GDP in Purchasing Power Parities, 1960-1998 .. 58
14. Electricity Consumption by Consumer Group, 1970-1998 ............ 62
15. Generation and Consumption of Electricity .......................... 63
16. Electricity Generation by Type of Power, 1973-1999 ................. 64
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17. Exchanges of Electricity ........................................... 66
18. Swedish National Electricity Grid .................................. 68
19. Spot Prices in the Nord Pool, 1998: Sweden and System Price ....... 70
20. Breakdown of Ownership of Electricity Generating Capacity .......... 70
21. Industrial Electricity Prices in IEA Countries, 1998 ................... 73
22. Domestic Electricity Prices in IEA Countries, 1998 ................... 73
23. Spot Prices in the Nord Pool, 1996-2000: Sweden and System Price .. 74
24. Average Transmission Fees for the Nordic Grid ..................... 74
25. Organisation of the Swedish Electricity Market ...................... 75
26. Nuclear Facilities in Sweden ....................................... 88
27. OECD Gasoline Prices and Taxes, 1st Quarter 2000 ................. 99
28. OECD Automotive Diesel Prices and Taxes, 1st Quarter 2000 ........ 100
29. Final Consumption of Oil by Sector, 1973-2010 .................... 101
30. Natural Gas Consumption, 1973-2010 ............................ 103
31. Natural Gas Network ............................................. 104
32. Coal Consumption by Sector, 1973-2010 ........................... 109
33. Annual Energy Research and Development Expenditures ............. 126
34. Energy Research and Development Expenditures by Category ........ 126
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Figure 1
Map of Sweden
Russia
Kiruna
Norwegian
Luleå
Sea
Finland
Storsjön
a
ni
h
ot
SWEDEN B
Norway of
ulf
G
Siljan
Helsinki
Oslo Uppsala Aland
Islands
Tallinn
Örebro Stockholm Estonia
Vänern
Baltic
Vättern
Skagerrak
Göteborg Gotland
Latvia
North Riga
Kattegat
Öland
Denmark Sea
Km
Sea Malmö Lithuania
Copenhagen 0 100 200
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SUMMARY AND RECOMMENDATIONS
SUMMARY
Sweden has in place strong, market-based policies in some areas of the
energy sector. Market-oriented policies include:
(cid:2) The successful development of an international market in electricity.
(cid:2) Co-operation in the Baltic Sea region on energy,climate policy and wider trade
issues.
(cid:2) Close consultation of government with industry, and a high level of industry
awareness and voluntary activity.
(cid:2) Tax measures to encourage, but not micro-manage, the development of the
energy sector in an economically efficient and environmentally sustainable way.
Even so,the structure of the system could be improved.
But there is a high level of government intervention in other areas. Energy
policy in Sweden is influenced by several key decisions:
(cid:2) The decision to phase out nuclear power.
(cid:2) The commitment to reduce greenhouse gas emissions in line with the Kyoto
Protocol.
(cid:2) Limits to the further development of hydro resources.
(cid:2) The aim to use renewables and energy efficiency as the principal means of
replacing lost nuclear capacity.
(cid:2) Requirement for a certain,but unquantified,degree of self-sufficiency in power
generation.
Difficulties in achieving all these elements of energy policy have, together with
conflicting views on the role of natural gas, given rise to uncertainty about the
future direction of Swedish energy policy,and a degree of political intervention in
the energy market. Mistakes could be costly to rectify. This could happen if large-
scale applications of biofuels and renewables do not become economically
competitive,or if the phasing-out of nuclear power generation is pushed too fast
and replacement sources of electricity are insecure or too expensive.
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Marked differences of view exist between the government and important
areas of the industry. Low electricity prices following deregulation of the
electricity market have reduced interest in investment in new generating capacity.
There is also a marked difference of view between the government and industry on
the future of the energy sector that may give rise to uncertainty affecting investment
in the sector. Industry leaders believe that it will not be possible to make renewable
forms of energy competitive for some time and are planning on the basis of the
existing fuel mix. Moreover, they consider that market pressures on nuclear will
eventually lead to the closure of reactors, starting with the least competitive.
Industry leaders also believe that other energy sources, including imported
electricity,will continue to be cheap and will maintain Sweden’s energy security and
overall competitiveness. Industry considers government ambitions for renewables
may be unachievable except in the long term,and that government measures may
result in distortion of the electricity market.
Energy policy formulation is complex. Certain inconsistencies reflect the
different origins of policy initiatives, and need to be rationalised. Government
consideration of the report of the Climate Commission may offer an opportunity to
review government energy goals and priorities and,in consultation with industry and
other stakeholders,to develop a set of achievable and cost-effective policy priorities.
As a result of successful policies, electricity prices are low and electricity
is of fundamental importance to the economy. Swedish electricity prices are
low,and the price of electricity is one source of competitive advantage for Sweden.
On the other hand,the intensity of electricity use in Sweden is among the highest
in the world (double the IEA Europe average and slightly higher than in the United
States). This means that the price of electricity is disproportionately important for
the Swedish economy. For these reasons,it is an explicit and essential priority of
Swedish energy policy that electricity prices must remain at competitive levels,
even if the fuel mix changes.
Energy taxation is a central policy instrument in Sweden: the tax regime
needs to be simplified, the balance between revenue, environmental and
energy policy goals needs to be clarified, and the tax regime kept stable over
time. An energy tax,a carbon tax and a sulphur tax apply to the energy sector,as well
as a number of other minor taxes. The tax system is complex and has undergone
many revisions over time. Achieving a balance between revenue,environmental and
specific energy policy goals should be one of the guiding principles in the review
currently being conducted of the energy tax system. The present nuclear tax is not
directly related to nuclear policy goals and impedes competition in the international
electricity market. It should preferably be abolished,but it could be redesigned as
part of a market-based package of measures to reduce the cost of phasing-out nuclear.
Taxes and environmental objectives need to be harmonised and the
unintended effects of taxes addressed. Energy taxes require review in relation
to their effects on fuel choice, and their impact on trade in electricity.
Harmonisation of taxation is needed in the electricity market, including a clear
choice between production or consumption taxes.
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Harmonisation of environmental objectives,ideally in the wider European Union
(EU) context,would be desirable as a starting point to rationalising the taxation
system. Pending this development,consideration needs to be given to particular
aspects of the Nordic electricity market. The approach to coal-based electricity
production (principally from Denmark,but also from other countries) needs to be
rationalised to avoid the clear inconsistency of developing carbon-free fuels
domestically while importing low-cost coal-fired electricity.
Natural gas could emerge as a cost-effective option, but the investment
climate could be improved. Energy policy should be based more broadly on
market principles. The long-term objective of moving the energy sector to a
renewables base is not questioned,provided electricity prices remain competitive.
Natural gas could be a competitive alternative to nuclear,without the perceived
safety and environmental problems of nuclear,but avoiding the high cost of a swift
transition to renewables at their current state of development. In the case of
Sweden,a move to gas would,however,mean accepting a higher level of carbon
dioxide emissions.
Achieving a balance between environmental and economic goals is complicated by
the policy of phasing-out nuclear. The Government of Sweden could take a more
positive position on the development of gas. Measures underway,or which might
be considered,include:
(cid:2) Implementing, as planned, the EU Gas Directive with a view to opening the
market as soon as possible.
(cid:2) Addressing the influence of major suppliers in the gas and electricity markets on
the development of the gas market.
(cid:2) Establishing a stable tax regime.
(cid:2) Facilitating access to the system network and the development of gas
infrastructure by interested parties.
Rapidly phasing out nuclear will make it harder to achieve Sweden’s
greenhouse gas emissions target. The policies and measures adopted after
consideration of the Climate Commission report should be cost-effective and realistic.
If nuclear continues to be phased out,it is unlikely that renewables will be sufficiently
developed in time to play a significant role in achieving Sweden’s greenhouse gas
emissions target. More extensive use of natural gas would raise the level of emissions.
Current policy requires that the pace and manner of phasing out nuclear and
introducing renewables should not damage Sweden’s international competitiveness.
But unreasonable expectations about the use of renewables to achieve the Kyoto
target could lead to premature introduction of alternatives to nuclear,and jeopardise
Sweden’s competitiveness. It is essential that policies and measures are cost-
effective,balancing economic and environmental goals in a realistic manner.
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