SEI - Africa Institute of Resource Assessment University of Dar es Salaam P. O. Box 35097, Dar es Salaam Tanzania Tel: +255-(0)766079061

SEI - Asia 15th Floor, Witthyakit Building 254 Chulalongkorn University Chulalongkorn Soi 64 Phyathai Road, Pathumwan Bangkok 10330 Thailand Tel+(66) 22514415 Stockholm Environment Institute, Project Report 2015-06

SEI - Oxford Suite 193 266 Banbury Road, Oxford, OX2 7DL UK Tel+44 1865 426316

SEI - Stockholm Kräftriket 2B SE -106 91 Stockholm Tel+46 8 674 7070

SEI - Tallinn Lai 34, Box 160 EE-10502, Tallinn Tel+372 6 276 100

SEI - U.S. 11 Curtis Avenue Somerville, MA 02144 USA Tel+1 617 627-3786

SEI - York University of York Heslington York YO10 5DD UK Tel+44 1904 43 2897

The Stockholm Environment Institute Developing Sweden’s transmission grid: SEI is an independent, international research institute.It has been engaged in environment and development issuesat local, national, what are the drivers and barriers? regional and global policy levels for more than a quarterofacentury. SEI supports decision making for sustainable development by bridging science and policy. Josefin Wangel

sei-international.org

Developing Sweden’s transmission grid: what are the drivers and barriers?

Josefin Wangel

Deliverable D4.4 within the NORSTRAT project Stockholm Environment Institute Linnégatan 87D, Box 24218 104 51 Stockholm Sweden Tel: +46 8 30 80 44 Web: www.sei-international.org

Director of Communications: Robert Watt Layout/graphics: Richard Clay Editors: Andy Mash and Tom Gill

Cover Photo: © Hakan Dahlstrom / flickr

This publication may be reproduced in whole or in part and in any form for educational or non-profit purposes, without special permission from the copyright holder(s) provided acknowledgement of the source is made. No use of this publication may be made for resale or other commercial purpose, without the written permission of the copyright holder(s).

The research presented in this report is funded by the Nordic Energy Research programme Sustainable Energy Systems 2050. This support is gratefully appreciated.

Copyright © June 2015 by Stockholm Environment Institute SUMMARY

U climate and energy policy aims to reduce CO2 The bidding areas (i.e. the pricing zones in Eemissions by 80% before 2050. To achieve this, the Sweden) can be seen as a driver of grid development electricity sector will have to be 95–100% decarbonised. because, by translating the spatial mismatch between The NORSTRAT project aims to build knowledge power production and consumption and the resulting about options for a carbon neutral and integrated Nordic congestion in supply into electricity prices, they power system in the period to 2050. To allow further expose a need for further grid investment to even out integration of sources (RES), the the price differences. However, it should be noted that transmission grid must be strengthened and expanded the price differences between the bidding areas are on in Sweden, across the , and between average quite small. the Nordic region and Europe. Analysis of Svenska Kraftnät’s internal operations This study focuses on developing the transmission shows that both its core values and long-term grid in Sweden, and identifies drivers that can make planning practices support grid development. Svenska the Swedish transmission grid fit to support a carbon- Kraftnät sees that it has an opportunity to contribute neutral Nordic power system, as well as barriers to to decarbonizing Europe, and thus has a responsibility doing so. The study combined a multi-level perspective to do so, even for grid investments that are not with institutional analysis. profitable for Sweden.

While the study shows that Svenska Kraftnät, the Planning practice is also a driver because, through Swedish transmission grid operator, is the main incorporating scenarios of increased volumes of source of drivers for developing the transmission renewable energy (especially from ), it grid in Sweden toward integration of RES, it seems is possible to proactively plan grid investment, thus that the most important drivers are indirect. For lowering the risk of future bottlenecks with regard to example, concern over climate change is a strong RES. We also identified key barriers in investment driver for integrating RES, which in turn demands planning, and in the formal institutions and cognitive transmission grid development, while the impetus rules related to the concession process. The latter toward an integrated European market also drives grid include concerns over energy security at the national development as a means to overcome bottlenecks that level, about the performance of national industry, and affect the . about impacts on the local environment and health. In contrast to the indirect drivers mentioned above, these Administrative instruments and legislation that are barriers more directly influence grid development. influencing grid development are linked to these Conflicts between concerns about health and the external drivers. In particular, Directive 2009/28/EC local environment versus issues of national or global and the electricity certificate system clearly stimulate sustainability are common. Other conflicts revolve grid development because they help to establish new around land-use issues. power production from renewable energy sources, which, because Svenska Kraftnät is obliged to connect Our analysis of the formal institutions and cognitive every producer of electricity, forces it to further develop frames related to the concession process revealed the national grid. (The connection obligation is not a uncertainty and ambiguity in several parts of the driver in itself, but is rather a formalized absence of concession process. This increases the risks of conflicts barriers for new power production to get connected.) and appeals, which can delay development projects.

iii developing sweden’s transmission grid: what are the drivers and barriers?

CONTENTS

Summary iii

1 Introduction 1 1.1 Aim and research questions 1 1.2 Structure of the report 1

2 Theoretical framework 2 2.1 Multi-level perspective 2 2.2 Understanding the socio-technical regime of transmission grid development 3 2.3 What are the drivers and barriers? 4

3 Methods 6 3.1 Analysing policy and planning documents 6 3.2 Interviews 6 3.3 Looking for conflict 6

4 A historical overview of transmission grid development 7 4.1 What is a transmission grid? 7 4.2 The Swedish power grid today 7 4.3 From local to national grids 8 4.4 Deregulation: from a national to a Nordic electricity market 10 4.5 New regulations: from a Nordic to a European electricity market 10 4.6 Summing up: what can history tell us about transmission grid development? 11

5 Transmission grid development projects and the NORSTRAT target 12 5.1 Background data from the NORSTRAT project 12 5.2 Transmission grid projects in the pipeline 13 5.3 Planned transmission grid projects in relation to the NORSTRAT scenarios 16

6 Drivers of and barriers to developing the transmission grid 18 6.1 Formal institutions 18 6.3 Actors and networks 32 6.4 Technology 32 6.5 Landscape signals 34 6.6 Niche drivers 35

7 Concluding discussion 36 7.1 Research questions revisited 36

References 40

Appendix A: Drivers of and barriers to transmission grid development 43

Appendix B: Transmission grid projects in Sweden 45

iv stockholm environment institute

1 INTRODUCTION

he EU 20-20-20 target states that at least 20 % To structure the work a number of subsidiary research Tof the energy used in the European Union should questions were formulated: come from renewable energy sources (RES) by 2020 (Directive 2009/28/EG), which translates into • What have been the drivers of and barriers a RES share of 30–35 % of all electricity production to transmission grid development in Sweden (EURELECTRIC 2011). The 20 % target, however, is historically, and what can be learned from these an average across the EU, and there are specific targets when exploring transmission grid development that apply to each member state. The 20 % target is today and in the future? also broken down into separate targets for electricity, heating and transport. In the long term, the EU climate • What is driving current transmission grid and energy policy aims to reduce CO2 emissions by development projects in Sweden, and are these 80 % before 2050 (European Commission 2011). To in line with the development needed to meet the achieve this, the electricity sector will have to be 95– NORSTRAT target? 100 % decarbonised (ECF 2010). • What are the drivers of and barriers to current The NORSTRAT project aims to build knowledge about transmission grid development projects in Sweden? options for a carbon neutral future and an integrated Nordic power system in the period to 2050. To allow This study does not make policy recommendations. further integration of renewable energy sources, the This will be done at a later stage. Nor does it make any transmission grid must be strengthened and expanded comparisons between the Nordic countries.2 in Sweden, across the Nordic countries and between the Nordic region and Europe. 1.2 Structure of the report

1.1 Aim and research questions Section 2 presents the theoretical framework of the study and introduces a set of hypothetical drivers of The aim of this study is to explore the drivers of and and barriers to transmission grid development. Section barriers to developing a transmission grid that supports 3 describes the methods used. Section 4 provides a the increased integration of RES in Sweden, in order to historical overview of transmission grid development. achieve the long-term target of fossil-fuel-free power Section 5 investigates planned transmission grid production in the Nordic countries by 2050.1 Based on development projects and compares these to the this aim, the following overarching research question NORSTRAT scenarios. Section 6 presents the was formulated: identified drivers of and barriers tor transmission grid development in Sweden. The concluding discussion in • What are the drivers of and barriers to transmission section 7 brings together insights from the entire report. grid development in Sweden, and how do these relate to meeting the NORSTRAT target?

1 -free refers to emissions during the produc-

tion phase of power generation and does not include CO2 emissions embodied in the technologies used, or any 2 An exploration and comparison of grid development

other upstream or downstream CO2 emissions related to across Sweden, and the UK can be found in power production. Brekke and Sataøen (2012).

1 developing sweden’s transmission grid: what are the drivers and barriers?

2 THEORETICAL FRAMEWORK

t has been said that there are only two ways to break ways in which these are entangled. Note that this way Ithe path dependency of a large socio-technical of defining the regime also includes a socio-technical system, both of which render the system obsolete. The representation of informal institutions, something first is when the system proves incapable of dealing that some MLP scholars, such as Geels, define as with a severe problem; the second when a rival system belonging to the system and not the regime per se: becomes more attractive (Kaijser, Mogren and Steen 1991). To understand how these changes might come System then refers to tangible and measurable elements about, and whether and how they could be initiated and (such as artefacts, market shares, infrastructure, managed, the multi-level perspective (MLP) provides regulations, consumption patterns, public opinion), a useful starting point. whereas regimes refer to intangible and underlying deep structures (such as engineering beliefs, heuristics, rules of thumb, routines, standardized ways of doing 2.1 Multi-level perspective things, policy paradigms, visions, promises, social expectations and norms). So ‘regime’ is an interpretive The multi-level perspective recognizes and analytical concept that invites the analyst to investigate distinguishes between three societal levels that are of what lies underneath the activities of actors who relevance to systemic change – the niche, the regime reproduce system elements. (Geels 2011: 31) and the landscape levels. Of these, the regime is of central interest because “transitions are defined as At the same time, Geels presents the regime as socio- shifts from one regime to another” (Geels 2011). The technical: “The socio-technical regime forms the niche and landscape levels are defined in relation to ‘deep structure’ that accounts for the stability of an the regime, specifically as “practices or technologies existing socio-technical system” (Geels 2011: 27). It that deviate substantially from the existing regime, and is clear that separate socio-technical systems are just as external an environment that influences interactions representations of the regime. It is also clear, from between niche(s) and regime” (Geels 2011: 26–27). a socio-technical path-dependency point of view (Pierson 2000: 251–67), that these socio-technical MLP has its roots in innovation studies, constructive representations structure and stabilise the regime. The technology assessment and theories of socio- regime must thus be understood as an emergent system, technological regimes and evolution (Kemp, Schot which cannot be reduced to its integral parts. and Hoogma 1998: 175–96). It was developed as a conceptual framework to explain why some Nonetheless, for analytical purposes it can be useful innovations fail to gain momentum, and what can be to divide the regime into more specific dimensions, done to prevent this (Schot and Geels 2008: 537–54). such as “science, technology, politics, markets, user preferences and cultural meanings”, each of which Regime includes a number of socio-technical systems. Geels The regime represents “normality” in all its socio- (2011) describes the interaction between regimes and material aspects of rules, regulations, norms, sub-regimes as “regime alignment” (see Figure 1). technologies and spatial configurations, as well as the This means that mutually enforcing path-dependency

Figure 1: Regime alignment Adapted from Geels (2011)

2 stockholm environment institute

(structuration) occurs not only in socio-technical Landscape systems but also between sub-regimes, in a way that The socio-technical landscape is the external efficiently narrows the future choice set down to a matter environment of both regimes and niches (Kemp, Schot of business-as-usual. This means of self-stabilization and Hoogma 1998: 175–96). As such it is defined as renders the regime inert and resistant to any major beyond the scope of influence of niche and regime changes that challenge the predominant “path”. actors. The landscape is influenced by the regime and by niches, however, but not in a direct way. The However, if a system is inert, that does not mean landscape is an emergent property, evolving out of that it cannot change – only that the scope and humanity’s collective memories and aspirations. direction of change are limited, or that the system is characterized by path dependency. Drawing on If the landscape is seen as a concept derived from the Kay (2005: 553–71), path dependency is not a theory regime (Geels 2011), its definition comes close to what but an empirical category, distinguished by the Churchman’s agency-based approach would describe occurrence of self-reinforcing or positive feedback as a system’s environment (Churchman 1968). processes that grow strong enough to prevent or Churchman proposes two questions when delimiting a obstruct any divergence from the status quo, or system from its surroundings: the path (Pierson 2000: 251–67). Path dependency is the result of a socio-technical process in which 1. Does it matter to my objectives? economic, technical and socio-cultural factors combine to create a “logic of practice” that curtails 2. Can I do anything about it? the “future choice set...and link[s] decision-making through time” (Kay 2005: 553). If the answer to both these questions is no, then “it” belongs to the landscape. This way of defining the It is argued above that there are only two ways in landscape, however, only makes sense when looking which the path dependency of a large socio-technical at a specific socio-technical system at a specific geo- system can be broken. Framing these drivers administrative level. Otherwise, the question of agency of systemic change within an MLP framework, is of no use. While this might seem a feasible way landscape drivers (see 2.1.3) result in a system that forward, it is problematic because it risks other parts of either proves or seems to be incapable of dealing with the regime being labelled part of the landscape – or the a severe problem. As a result, a rival system (a niche) regime becoming the landscape for the system. can potentially break through to the regime. However, this is an oversimplification of the process. Geels Another way of defining the landscape is that it does and Schot (2007: 399–417) identify four types of not include any actors at all. This does not mean that transition pathway: transformation, reconfiguration, the landscape is free from agency. The landscape is technological substitution, and de-alignment and agency, nudging the regime (and niches) to develop realignment. These types mainly differ in terms of according to whatever priorities and rules of the game how well developed the niche-innovations are at the are in play. time landscape developments are exerting pressure on the regime. The better developed the niche innovation is, the more impact it has on the regime. 2.2 Understanding the socio-technical regime of transmission grid development Niche The niche represents the micro-level of innovation Because the transmission grid is not a niche but and deviation. In classic strategic niche management, part of the regime, this study is different from many the niche is depicted as a protected incubator of other studies that use an MLP framework. To date, innovation, learning and social networking, with a the predominant focus has been on niches and niche focus on technology and market integration. In more penetration (Quitzau et al. 2013: 140–47). This is recent work, the understanding of the niche has been perhaps no surprise, given that, as noted above, the developed further to encompass social innovation approach originated to explain why some innovations and grassroots- and community-driven initiatives fail to gain momentum and what can be done to prevent (Seyfang and Haxeltine 2011), the development of this (Schot and Geels 2008: 537–54). Quitzau et al. which is often driven by concerns and aspirations (2013), however, note that this focus has led to a “black other than market integration. Niches are seen as boxing” of the regime, and neglects the fact that regime crucial for transition because they are the seeds of actors can also strive for transition. The regime need transformative change (Geels 2011). not be as stable as it seems – or as it is often depicted

3 developing sweden’s transmission grid: what are the drivers and barriers?

– but should rather be understood as an arena for policy interventions. Rather, specific policy proposals discursive struggles. This means that an investigation ‘imagine’ ‘problems’ in particular ways that have real of drivers and barriers must also look closely at what is and meaningful effects” (Bacchi and Evaline 2010: going on inside the regime. 111). Once established, however, formal institutions influence which informal institutions are given room A multi-level perspective on studying transmission and promoted. Cognitive and normative rules, and grid development provides a framework for identifying informal and formal institutions, are therefore mutually and analysing drivers and barriers. But to make sense structuring, and thus often seem to converge. There of these drivers and barriers from a governance point are, however, always a greater variety of informal of view – that is, who can do anything about it and how institutions than formal ones. At least in a centralized – it is helpful to frame them in a second dimension – governance system, only a few sets of cognitive and the geo-administrative levels of governance. normative rules can be in play at the same time.

Based on the historical developments presented in The “technical” part of the socio-technical system is section 4.3, it can be concluded that the transmission made up of physical structures, technologies and other grid and its development represent a mature socio- material resources. From a socio-technical point of technical system – it is part of the regime. It is also view, these can be seen as physical manifestations of clear that this regime contains more than one level social systems, including both formal and informal of governance. While transmission grid development institutions. In other words, technology is policy. is carried out by the national Transmission System Conversely, social systems are a reflection of Operator (TSO), it is also structured by Nordic and technology – technology is a structuring social agent. European grid development and the related policies. On the other hand, it is structured by local and Formal institutions and technology need not be regional regimes enacted by municipalities, the land manifestations of current informal institutions: they and environment courts and the county administrative can also be remnants of the past, and it does not boards (Albrecht 2012). follow that they are therefore obsolete. A technology or formal institution that does not fulfil any function Drawing on new institutionalism, the “social” part of at all does not stay in place for long. As long as the the socio-technical can be understood as including technology or formal institution can fulfil a required institutions and actors. Institutions can be further function, and is not challenged by an alternative, better divided into the formal and the informal. Informal way of delivering the same function, the original institutions can be subdivided into cognitive and solution can remain quite safe. One reason for this normative rules (Nilsson et al. 2011: 1117–28). Such is that many technologies and physical structures are rules are not deterministic, but prescriptive. They work resistant to change. When examining the physical by constructing and limiting what we see as rational presence of and economic investment in technologies and/or good. Cognitive rules concern understanding such as the built environment and its infrasystems,3 this and perception, the problems and solutions that inertia is quite evident. catch our attention and that we see as feasible; while normative rules concern values and culture, what we see as being the right thing to do or the right way to 2.3 What are the drivers and barriers? act. Cognitive and normative rules interact. This means that which problem formulations are seen as relevant Based on the MLP framework, and with an understanding and feasible is not just a matter of cognitive capacities of the regime informed by new institutionalism, it is and experiences, but also a result of norms such as possible to derive a number of hypothetical types of gender power relations (Bacchi and Evaline 2010). drivers and barriers associated with transmission grid development (see 1–6 below). Indeed, this way of Formal institutions are rules, organizational structures separating drivers and barriers into different types is and procedures that are formally acknowledged in a conceptual construct. As is noted above, formal and and regulated by policy documents. Drawing on the informal institutions, actors, technology and landscape idea of policymaking as a constructive rather than a signals are mutually structuring. This study uses the reactive process (Kingon 1994), formal institutions different types of drivers and barriers to provide entry can be seen as an operationalization and manifestation of a specific set of informal institutions: “policy 3 Infrasystem is a term from the Large Technical Systems ‘problems’ do not exist ‘out there’ in society, waiting body of research, coined to highlight the socio-technical to be ‘solved’ through timely and perspicacious character of infrastructures.

4 stockholm environment institute

points for exploration. Basing the study on what a making, as well as how problems are defined and specific theory tells us about drivers and barriers means feasible solutions are identified. Cognitive rules that the focus will be on a number of predefined themes, therefore influence how regime actors such as or archetype drivers and barriers. These hypothetical Svenska Kraftnät make their investment decisions types of driver and barrier are introduced below. and technology choices, which may or may not support RES integration to the extent needed to 1. Landscape signals: Landscape signals can meet the NORSTRAT targets. support the regime to continue with business-as- usual, nudge it to develop in certain directions, or Normative and cognitive rules together make up destabilize it so that niche technologies can break what is called discourse, defined by Dryzek as through, causing a transition. Examples of how “shared ways of apprehending the world” (1997: landscape signals could act as a barrier include 8). A discursive struggle is a struggle over what is large-scale public resistance to transmission grid considered a problem, how this problem should be development projects, that there is little political formulated, what is considered a feasible solution support for climate change mitigation and and what is prioritized. renewable energy, or that national energy security is a stronger discourse than market integration. 4. Actors: How regime actors cooperate (or don’t) Examples of how landscape signals could act as a influences transmission grid development. driver of transmission grid development include Actor set-up is strongly influenced by, and must strong public and political support for mitigating therefore be understood in relation to, formative climate change, and ideological visions for an institutions, and cognitive and normative rules. integrated European electricity market. For instance, the Environmental Code contains instructions on which actors to involve in 2. Regime formal institutions: Formal institutions consultation processes (formal institution), while are part of the regime and include laws, normative and cognitive rules across TSOs can be regulations and policies. Formal institutions can seen as the reason for the establishment of some be understood as institutionalised cognitive and of the Nordic and European cooperative organs. normative rules that help to stabilize regime dynamics. They may still cause disruption, 5. Technology: Technology can be a barrier to however, where they are not aligned or have certain transmission grid development projects, become obsolete in relation to what the landscape such as connecting offshore wind power plants. signals are nudging the regime to do. It can also be a barrier to RES integration, for instance due to the need to balance power 3. Regime normative and cognitive rules: The generation and frequency stabilisation. normative rules of regime actors concern what these actors believe is the right thing to do. 6. Niche: The way in which the relationship between Normative rules thus include norms, values and niche and regime is conceptualised in MLP means priorities. Normative rules are also part of how that the niche cannot be anything other than a regime actors understand their role in society. driver of transition. It is however not easy to see Should, for instance, Sweden be a forerunner in how niche innovations could work as a driver terms of mitigating climate change? Is it right to of transmission grid development supporting support the establishment of RES in a way that increased integration of the RES. influences market dynamics? When looking more closely at how these types Normative rules are often implicit, until they influence transmission grid development, it is are activated by conflicting interests, such as useful to distinguish between drivers of and barriers when an investment that is beneficial to global to transmission grid development in general, and sustainability has negative side-effects for local those more specifically related to transmission grid sustainability. Cognitive rules govern how formal development for RES integration. Section 6 uses these institutions are translated in practice and the six conceptual types of drivers and barriers to structure knowledge base on which actors draw for decision analysis and discussion.

5 developing sweden’s transmission grid: what are the drivers and barriers?

3 METHODS

e decided to use qualitative research methods Swedish Energy Agency, the Ministry of Enterprise, Wrather than quantitative methods because while Energy and Communication; and the Swedish Wind the latter can provide answers to questions such as association, among others. Interviews lasted 1–2 hours how much or how often, qualitative methods provide and took place at the workplace of the respondents. All insights on why and what can be done about it. The the interviews were recorded and transcribed. key methods used were semi-structured interviews and document analysis. In addition, the media The interviews were semi-structured, allowing coverage of conflicts related to the “SydVästlänken” respondents to elaborate on issues where they thought project was analysed. it relevant in relation to the theme of the interview (Kvale 1997). The interview guide included questions on the drivers of and barriers to transmission grid 3.1 Analysing policy and planning development, the relation between transmission grid documents development and RES integration, and key actors. The interview material was used to shed further light We identified policy and planning documents relating on aspects of transmission grid development and RES to transmission grid development on the websites integration beyond what could be found in the written of key actors. Documents were also identified by material. The interviews also provided insights into “snowballing”, using the reference lists of previously work in progress, information that is not yet available identified documents. The documents were analysed to in written reports. When analysing the interview gain a deeper understanding of the formal institutions material, we used the framework presented in section and actors involved in transmission grid development, 2.3 to structure it into meaningful categories. identify normative and cognitive rules, and explore current plans for transmission grid development projects in Sweden – and the recognised drivers of and 3.3 Looking for conflict barriers to such plans. An analysis of the large-scale transmission grid project, SydVästlänken, was carried out to gain an 3.2 Interviews understanding of the conflicts such projects can lead to. News articles and other material published We developed a preliminary list of key persons by on the Internet were identified by searching for the function/role based on the analysis of actors and term “SydVästlänken” in the search engine Google networks in transmission grid development presented (www.google.se). This resulted in about 22,600 hits. by Albrecht (2012). This list was then used as a basis We then identified 207 linked entries (as of April for identifying the people carrying out these functions. 2014), of which 43 were seen as relevant to the Snowballing was used, by asking each respondent to study. These were analysed to identify a number of name any other people that s/he thought should be conflict themes. A new search was performed in early interviewed. Seven people were interviewed in total, September 2014, which provided a few additional representing the Swedish TSO, Svenska Kraftnät; the entries but no new themes.

6 stockholm environment institute

4 A HISTORICAL OVERVIEW OF TRANSMISSION GRID DEVELOPMENT

4.1 What is a transmission grid? This section describes the development of the Swedish power grid, with a focus on the transmission grid. It transmission grid is a network of lines and stations also includes a brief account of the development of Aused to transmit electricity from power plants to the electricity market, as this has been, and remains, substations. From the substation it is the distribution highly structuring when it comes to the physical and grid that distributes the electricity to the end-users. institutional design of the grid. In contrast to a distribution grid, the transmission grid never reaches the end-users. The combined transmission and distribution grid is known as the 4.2 The Swedish power grid today power grid or the electricity grid. The Swedish power grid has three levels: the national The transmission grid can be studied in its own right, transmission grid, the regional distribution grid as part of the power system or, with an even larger and the local distribution grid (see Figure 2). The focus, as part of the energy system. The transmission national grid consists of 220 kV and 400 kV cables grid is recognised as an essential element of achieving and is owned, administered and operated by Svenska a carbon-neutral Nordic power system by 2050. This Kraftnät, the state-controlled public utility company. means that the scope of analysis cannot be delimited Svenska Kraftnät is thus the Swedish TSO. The to the transmission grid per se, but must include all regional grid connects to the national grid via converter the factors that directly or indirectly influence its stations and has a lower voltage, usually 40–130 kV. development and use. Three large companies own and manage most of the regional grid: E.ON Power Grids, Distribution Given the aim of this study, the transmission grid and Power Distribution. The local grid must also be recognised and addressed as a socio- connects to the regional grid, again via converter technical system in which social factors, such as stations. From the local grid, with voltage levels of formal and informal institutions, and technical factors, 20 kV or lower, the electricity is transformed in the such as lines and power plants, are seen as mutually distribution areas to the low voltage 400/230 V that structuring (Högselius and Kaijser 2007). As is is used in domestic households. Approximately 170 shown below, a socio-technical approach is essential companies run local grids. to understanding not only why the transmission grid looks like it does today, but also the drivers of and barriers to its development.

Figure 2: The power system includes both the grid infrastructure and the electricity market. Source: www.svk.se

7 developing sweden’s transmission grid: what are the drivers and barriers?

4.3 From local to national grids avoided since having more than one line or grid to choose between would have no clear economic Alternating current (AC) technology, developed in the benefits for either individuals or society. This practice 1890s, made it possible to transmit electricity over of natural monopolies formed the common ground long distances. Electricity generation had previously for the conventions, codes of conduct, and formal been spatially constrained to in and around cities and informal regulations that grew out of the mix of and industry, where sufficient demand was to be municipal, private sector and state interests (Stymne found (Palm 2004; Högselius and Kaijser 2007). AC 2002). Treating power grids as natural monopolies technology made it possible to overcome the spatial had a strong and clear impact on the way in which the mismatch between the location of beneficial conditions transmission grids developed. for electricity generation, in particular for hydroelectric production in the case of Sweden, and the location World War I spurred the development of power of electricity consumers. This spatial mismatch can production capacity and of transmission grids, since be seen as the first driver of the development of the it made access to fuel unreliable. At the same time, transmission grid. the first problems related to load balancing emerged, originating from fluctuations in water flows. At first, Constructing plants and the network of these were resolved by constructing steam-powered high voltage lines needed to transmit the electricity plants that could be regulated more precisely to was so expensive, however, that coalitions of balance the production from hydropower plants. interested entities were needed to share the investment Later, it was realised that it was possible to connect costs (Brekke and Sataøen 2012; Stymne 2002). These different hydropower plants, and let them balance coalitions were typically institutionalized in the form each other. This led to the construction by Vattenfall of limited companies, founded by municipalities and of four interconnectors: one westbound bound, energy-intensive industries. In 1907 the Swedish between Trollhättan and Västerås; one northbound, Parliament established the Kungliga Vattenfallstyrelsen, between Indalsälven and Västerås (north-south); one later known as Vattenfall. Together with the power southbound, between Trollhättan and Skåne; and one companies, Vattenfall started to develop regional high eastbound, between Örebro and Norrköping. The voltage grids. It was therefore institutional as well as westbound interconnector was given top priority, technical innovations that made it possible to develop followed by the northbound (Stymne 2002, see the transmission grid. also Figure 3 2). This high capacity transmission grid eventually became the Swedish National Grid. Gradually, coalitions and mergers led many Electricity from the north of Sweden was transmitted municipalities to cease power generation, since it was to the middle of Sweden for the first time in 1936, economically more beneficial to buy power from the and the entire Swedish power grid was run as a single large power companies. The distribution of power, system for the first time in 1938.4 Load balancing can however, remained in the hands of the municipalities, thus be seen as the second driver of transmission grid a functional division of the power sector that remained development. In contrast to spatial mismatch, however, until the 1990s. According to Stymne (2002), there were it led to a more interconnected grid. three categories of power company in the early 20th century: industries that invested in energy production In an undated presentation, probably from around for their own needs and sold any surplus; municipal 2006, Svenska Kraftnät highlights four major phases power companies that produced, transmitted and sold of transmission grid development (Svenska Kraftnät, electricity locally; and the pure power companies, n.d.). The first took place during the 1950s and 1960s, including the state-owned Vattenfall. The three types to reduce the need to transfer electricity from the large partly competed and partly cooperated. Transmission hydropower plants in the north of Sweden to users in the grid development thus influenced not only where power south (see Figure 4). The establishment of hydropower was produced, but also which actors produced it. plants had gathered pace in the 1940s. The first 400 kV line was inaugurated in 1952, resulting in increased Early in the electrification process in Sweden, there transmission capacity which drove further investment. was a race to sign up companies and people to The second phase resulted from the establishment of distribution agreements. Each agreement led to the plants in the 1970s and 1980s, which development of a new line or grid. In practice, the required increased transmission capacity. In the third power company that developed the line was given phase, between 1990 and 2010, capacity was again a monopoly on delivering electricity to the areas served by that line. Parallel, competing lines were 4 http://www.svenskenergi.se/Svensk-Energi/Historik-/

8 stockholm environment institute

Figure 3: Left: General map – power stations and main transmission lines in 1933. Right: The transmission grid as it was planned to look in 1955 (proposal made in 1937 by Krångsede-). Pictures and texts deposited at skolwebben.org by Vattenfall.

Figure 4: The development of power production in Sweden, 1960–2012. The diagram to the left shows installed capacity in MW, the diagram to the right shows power production in TWh.

9 developing sweden’s transmission grid: what are the drivers and barriers?

increased to allow for an international power trade. In The grids, which continued to be seen as natural the fourth phase, since 2005, development has focused monopolies, would remain non-commercial. on reinvestment to increase security of supply. What is missing from this picture is the development driven For the energy market to function as intended it had by the need to integrate power from renewable energy to be easy to buy and sell electricity. In 1995, Svenska sources, something that was still in its infancy in 2006. Kraftnät launched a new tariff, the spot tariff. The Thus, power production has historically been a strong Norwegian TSO had already done the same driver of grid development. and had also developed a specific exchange market for electricity – the . The similarities between the It was eventually realised that the development of the Swedish and the led to increased high capacity transmission grid (the interconnectors) cooperation. Svenska Kraftnät bought half the shares required a single coordinating organization. In 1949, in Nord Pool and the tariffs on energy trade between the Swedish Parliament decided that Vattenfall should the countries were abolished. The energy markets in own all new lines of 220 V or above. Vattenfall should the two countries were unified – at least institutionally. also sign agreements with any other partner that wanted joined the cooperative venture in 1999 and all to transmit power through the national grid (Stymne of was included in 2000. In less than five 2002). Seeing power grids as natural monopolies years the Nordic countries had formed a single, unified allowed one organisation to be granted power over electricity market (Stymne 2002). large parts of the system, which in turn influenced the need and opportunities for coordination. This change in formal institutions had been preceded by the development of a number of infrastructure Today, the national grid is experiencing another wave connections between the Nordic countries. The first of capacity development, to a large extent driven by connection (between Sweden and Denmark) had been wind power. However, in contrast to the nuclear power established in 1915, but it was not until the 1950s industry, the wind power sector is more fragmented. and 1960s that connections with greater transmission The number of actors is greater, as is the number of capacity began to be built. Cooperation between the plants. In addition, both actors and plants are smaller, Nordic power companies was formalized in 1962 the geography of wind power establishments is less in the form of Nord El. At that time, international controllable, and only a small proportion of the planned transmission capacity was still rather small. In 1963 wind power projects are realised. All in all, the number the Nordic connections had a transmission capacity of actors and the large uncertainties associated with equivalent to only 1.8 % of total Nordic production. the establishment of wind power present fundamental By the end of the 1980s, however, a number of high challenges with regard to coordinating and planning capacity lines had connected Sweden, Norway, Finland transmission grid development. and Denmark, which made the national grids integrated enough to function as a unified Nordic grid (Stymne 2002). Infrastructure investment and technology paved 4.4 Deregulation: from a national to a the way for a joint energy market and for Nord El, the Nordic electricity market formalised cooperation between Nordic TSOs which was developed in the following decade. In the early 1990s the Swedish Government proposed that Vattenfall should be transformed from an electricity board into a state-owned limited company, 4.5 New regulations: from a Nordic to a and that the national grid should be managed in a European electricity market way that was independent of Vattenfall. As a result, the state-owned public utility Svenska Kraftnät was In 1985 the Single European Act established the goal of established in 1992 and given responsibility for the a joint and integrated European Electricity market. At national grid. Svenska Kraftnät is also responsible for that time, Denmark, which joined the EU in 1973, was maintaining a balance between electricity production the only Nordic EU member state. Sweden and Finland and consumption in Sweden. joined the EU in 1995. Norway is not a member, but is part of the EU internal market under the 1996 European The government wanted to separate the commercial Economic Area (EEA) agreement. parts of the electricity sector from the non-commercial. The production, transmission, distribution and sale In 1996 the EU launched its First Legislative Package on of electricity as a commodity were to be done on a the Internal Energy Market (Directive 96/92), aimed at commercial basis according to the rules of the market. integrating national electricity markets by establishing

10 stockholm environment institute

common rules for the generation, transmission and In sum, while the EU has rolled out an impressive distribution of electricity. To support this integration an list of policies and established several institutions umbrella association for national TSOs – the European designed to implement these, of which ENSTO-E is Transmission System Operators (ETSO) – was just one example, grid integration at the EU level faces established in 1999. This was followed by a Second considerably more inertia than it does at the Nordic Legislative Package in 2003, intended to eliminate level. It should also be noted that the policy processes of obstacles that had been identified by facilitating cross- market integration at the Nordic and EU levels have to a border trading of electricity, regulate the terms under large degree run in parallel, rather than in cooperation. which access to cross-border networks takes place, achieve greater transparency in the wholesale market, and establish compensation mechanisms between 4.6 Summing up: what can history tell us different national operators (Albrecht 2012). In about transmission grid development? 2009, as part of the Third Legislative Package for the Internal Energy Market, the ETSO was replaced by the Based on this historical overview, it is possible to European Network of Transmission System Operators conclude that transmission grid development has been for Electricity (ENTSO-E).5 The main objectives of driven historically by spatial mismatches between ENTSO-E are to promote closer cooperation across production and consumption, and the need to balance Europe’s TSOs in order to support the implementation these. Another clear driver was the need to connect of EU energy policy and the completion of the internal new power production, imposed by the connection energy market. More specifically, ENTSO-E was obligation in the Electricity Act (see below) and, more given responsibility for developing non-binding 10- recently, by market integration (Swedish Electricity year network development plans (TYNDP), drafting Act,1997: 857). Box 1 summarises these drivers. It is network standardization codes and drawing up more important to note that some of these drivers have been detailed development plans for specific regions. around for longer than others.

However, attempts to “Europeanise” the national grids across the EU have been met with concern and Box 1: Historical drivers of transmission grid resistance by member states, mainly from the point development: of view of security of supply and system reliability (Van der Vleuten and Lagendijk 2010: 2042–52). On • Spatial mismatches between production the other hand, Supponen (2011) argues that issues and consumption related to security of supply have promoted investment • Balancing geo-temporal fluctuations in pro- in international interconnectors 2. In the same study, duction and consumption Supponen stresses that “national and company • Integrating new production interests have contributed to serious underinvestment • Market integration in the European transmission network from the overall social welfare point of view” (Supponen 2011:139). EURELECTRIC, the sector association for electricity This historical outlook has shown that in order to industries in Europe, has identified an increasing understand transmission grid development, it must be divergence in national energy policies, resulting in a seen as a socio-technical process, where technology, situation in which developments in many countries are actor networks and policy are mutually structuring. not aligned with the objective of an integrated energy market across the EU (EURELECTRIC 2013).

5 See www.entsoe.eu

11 developing sweden’s transmission grid: what are the drivers and barriers?

5 TRANSMISSION GRID DEVELOPMENT PROJECTS AND THE NORSTRAT TARGET

his section examines current transmission grid recommendations by exploring how the target for a Tdevelopment projects to get an idea of how these carbon-neutral Nordic power system by 2050 could relate to the NORSTRAT scenarios and target.6 be met under a number of different circumstances. It focuses on the location, capacity and speed of When developing explorative scenarios, the choice transmission grid development projects. Location is of which uncertainties to focus on is key. To make the essential as it determines whether the project will help scenarios relevant it is also important that it must be to resolve bottlenecks of strategic importance to RES possible to address the uncertainties chosen – if not integration. Capacity is essential as it determines the directly, then indirectly – through adaptive planning. extent to which the project will resolve congestion. In addition, when developing scenarios by combining Speed is essential as it determines whether transmission two dimensions in a so-called scenario cross, the grid development will help meet the NORSTRAT uncertainties chosen should be independent of each target by 2050. other.

Two sets of data were used and compared. The first set In the NORSTRAT scenarios, uncertainties were combines the NORSTRAT scenarios (see section 5.1) defined as “factors/ developments that will influence and a study by Graabak and Warland (2014), which the future but cannot be directly controlled by the uses an electricity market model (EMPS) to explore decision makers [i.e. the TSOs]”, (Graabak, Warland, whether transmission grid investment projects would Nilsson and Wu 2014) making the uncertainties be profitable given different levels of demand and external to the TSOs. A number of uncertainties were geographies of production capacity. The NORSTRAT identified in internal evaluations and discussions with scenarios are introduced in section 5.1.1 and the power sector actors in the four Nordic countries (see outcome of the modelling is presented in section 5.1.2. Figure 5). A number of options for action, or strategies, The second data set is from the Svenska Kraftnät were then also identified. development plan (see section 5.2). A comparison of the outcome of modelling (the desired) with ongoing To develop the explorative scenarios, two key variables and planned transmission grid development projects were selected in order to set out four possible futures. (the planned) provides an understanding of the gap The two variables were: (i) the volume and location of between the two. production from RES; and (ii) the level of integration with continental Europe (see Figure 6). It is important to keep in mind that the two data sets operate at different scales, in both time and space. The The four possible futures were: NORSTRAT scenarios and related models focus on the Nordic power system in 2050, while the development • Carbon Neutral Nordic: the same transmission plans of the TSOs are national, albeit with some connection to the rest of Europe as today; some international interconnectors, and have 2025 as their existing plans for new capacity are implemented; temporal horizon (Svenska Kraftnät 2013a). fossil-fuel-based production phased out and substituted with 100–150 TWh/y of new RES- based production. 5.1 Background data from the NORSTRAT project • Purely RES: 200–250 TWh/y in new RES-based production and almost the same transmission The NORSTRAT scenarios capacities to the Nordic countries as today. Both The NORSTRAT scenarios were developed in a nuclear power and fossil-fuel-based production are combination of normative and explorative studies, phased out in the Nordic region. which researched the different ways in which the specific target might be met (Börjeson et al. 2006: 723– • European Hub: based on 200–250 TWh/y in new 39; Schoemaker 1993: 193–213). The scenarios aim RES-based production in the Nordic region and to provide more specific, robust or adaptable policy up to 20GW in new capacity in the Norwegian hydropower system. The transmission capacities 6 The target is formulated as fossil-fuel-free power pro- between the Nordic region and the rest of Europe duction in the Nordic countries by 2050. are increased based on profitability assessments.

12 stockholm environment institute

Uncertainties Options Power system: Power system: Volume and location of production from Building new transmission lines RES Voltage upgrading of existing lines Nuclear production Utilisation of demand flexibility Demand volume and location Reserve Option Market Integration with Continental Europe Technology development: Technology development: Transmission technology Technology performance and cost (DSM, (HVAC/HVDC/FACTS) generation, transmission) CCS Research and development Research funding Social: Laboratories facilities Public attitude

Futures Strategies Scenario

Figure 5: Identified uncertainties and options Source: Graabak et al. (2014)

Purely RES European Hub 200-250 TWh/y of new RES 200-250 TWh/y of new 200-250 based production. RES. Up to 20GW increased TWh/y Nuclear phased out capacity in Norwegian hydro Connection to Europe power. mainly as today Increased integration with Europe

RES = Renewable Energy Sources Carbon Neutral Nordic European Battery 100-150 TWh/y of new RES 100-150 TWh/y of new 100-150 based production. RES. Up to 20GW increased Nuclear phased out capacity in Norwegian hydro TWh/y Connection to Europe power. mainly as today Increased integration with Europe

Current capacity Increased capacity Integration between the Nordic region and rest of Europe

Figure 6: NORSTRAT main scenarios Source: Graabak et al. (2014)

• European Battery: 100–150 TWh/y of 5.2 Transmission grid projects in the pipeline new RES-based production in addition to up to 20 GW in new capacity in the The Swedish national grid will see massive investment Norwegian hydropower system. Transmission in the next few years. The investment plan for 2014–16 capacities between the Nordic region and its contains investments of sek 14 200 million (eur 1.55 neighbouring countries are increased based billion) (Svenska Kraftnät 2013b). From a longer- on profitability assessments. term perspective, Svenska Kraftnät has identified investment needs of sek 55–60 billion (eur 6–6.5 In addition, sensitivity analyses were carried out to billion) to 2025 (Svenska Kraftnät 2013a). Of this, the assess the impact of different levels of RES production, lion’s share is for investment in new lines and stations power demand and nuclear power production. The (sek 48 billion), to which can be added an estimated sensitivity analyses were conducted sek 9 billion of reinvestment in existing infrastructure.

13 developing sweden’s transmission grid: what are the drivers and barriers?

Table1: Profitable increase in transmission capacity (MW) within the Nordic region in the different NORSTRAT

PR non Carbon Purely European European CN low nuclear Mean Stdev Neutral RES Battery Hub demand Sweden FINNMARK TROMS 0 150 0 50 0 50 42 58 FINNMARK FIN-NORD 350 350 250 250 100 200 250 95 TROMS SVARTISEN 0 0 0 0 0 0 0 0 TROMS SVER-SNO1 0 650 50 850 50 700 383 389 SVARTISEN HELGELAND 0 0 0 0 0 0 0 0 HELGELAND TRONDELAG 150 0 0 0 0 0 25 61 HELGELAND SVER-SNO2 200 1200 550 1300 50 1200 750 555 TRONDELAG MORE 250 0 0 0 0 0 42 102 TRONDELAG SVER-SNO2 0 0 0 0 0 0 0 0 MORE NORDVEST 150 500 250 500 0 450 308 208 MORE NORGEOST 250 1200 350 1650 0 1200 775 661 NORDVEST INDRESOGN 0 0 0 150 0 0 25 61 NORDVEST BKK 0 0 0 50 0 0 8 20 NORDVEST HALLINGDAL 0 0 0 0 0 0 0 0 BKK SKL 0 0 100 100 0 0 33 52 SKL VESTSYD 0 0 300 400 0 0 117 183 VESTSYD NORDGESYD 0 0 0 0 0 0 0 0 VESTSYD TELEMARK 0 0 300 100 0 0 67 121 VESTSYD JYLL-NORD 50 150 0 0 100 150 75 69 HALLING- NORGEOST 0 0 0 0 0 0 0 0 DAL- TELEMARK NORGESYD 0 0 50 0 0 0 8 20 TELEMARK NORGEOST 0 1400 500 100 0 900 483 571 NORGEOST SVER-SNO3 2000 50 850 150 300 0 558 770 SVER-SNO1 SVER-SNO2 0 650 0 1600 0 600 475 631 SVER-SNO1 FIN-NORD 400 150 0 0 0 0 92 163 SVER-SNO2 SVER-SNO3 1450 4250 3150 6000 0 4150 3167 2151 SVER-SNO3 SVER-SNO4 1250 800 4500 8500 1300 250 2767 3179 SVER-SNO4 DANM-OST 950 400 250 1000 950 600 692 322 FIN-NORD FIN-SYD 0 50 0 0 0 0 8 20 JYLL-NORD JYLL-SYD 0 0 0 0 0 0 0 0 JYLL-SYD FYN 0 0 0 0 0 0 0 0 NORGESYD JYLL-NORD 0 0 0 0 100 0 17 41 HALLING- SVER-SNO3 950 1350 1150 1200 250 1400 1050 423 DAL- SVER-SNO3 FIN-SYD 150 550 0 0 0 1300 333 519 SVER-SNO3 JYLL-NORD 0 150 0 0 50 0 33 61 DANM-OST FYN 0 0 0 0 0 0 0 0 TOTAL 8550 14000 12600 23950 3250 13150

Red: 4000 MW and above; Orange: 1000–3999 MW; Yellow: 500–999 MW; Green: 100–499 MW; Blue: 0–99 MW. Input data from Graabak & Warland (2014)

14 stockholm environment institute

Table2: Profitable increase in transmission capacity (MW) between the Nordic region and continental Europe in the different NORSTRAT scenarios

PR non Carbon Purely European European CN low nuclear Mean Stdev Neutral RES Battery Hub demand Sweden DANM-OST TYSK-OST 0 0 0 100 0 0 17 41

SVER-SNO4 0 0 1250 1750 0 0 500 791

FIN-SYD ESTONIA 0 0 2450 4300 0 0 1125 1838

JYLL-SYD TYSK-NORD 0 0 800 1850 0 0 442 761

NORGESYD TYSK-NORD 0 0 1500 1900 0 0 567 887

NORGESYD NEDERLAND 0 0 250 750 0 0 167 303

VESTSYD GB-MID 0 0 3700 3350 0 0 1175 1824

NORGESYD AEGIR-OWP 0 0 0 0 0 0 0 0

NORGESYD SORLAN-OWP 0 0 0 0 0 0 0 0

SVER-SNO4 TYSK-NORD 0 0 400 1700 0 0 350 680

SVER-SNO4 POLEN 0 0 3750 6550 0 0 1717 2803

TOTAL 0 0 14100 22250 0 0

Red: 4000 MW and above. Orange: 1000–3999 MW; Yellow: 500–999 MW; Green: 100–499 MW; Blue: 0–99 MW. Input data from Graabak and Warland (2014)

Figure 7: Profitable increases in transmission capacities in the Nordic region in European Hub (left picture in each scenario) and net annual power flow (right picture in each scenario) Source: Adapted from Graabak and Warland (2014)

15 developing sweden’s transmission grid: what are the drivers and barriers?

Svenska Kraftnät presents a number of ongoing projects on its website.7 Appendix B (Table A1) lists Box 2: Contemporary drivers of the larger ongoing transmission grid development transmission grid development: projects, including the construction of transmission lines. Table A2 shows all the finalised larger • Integrating new power production transmission grid projects. A closer look at the stated • Reinvestment drivers of these projects identifies four main reasons • Market integration for grid development: 1) integration of wind power; • Spatial mismatches between consumption 2) increased output from nuclear power plants; 3) and production reinvestment; and 4) market integration.

Comparing these contemporary drivers to the historical drivers presented above, the similarities are obvious. At first glance this seems positive, as key actors should 5.3 Planned transmission grid projects in have experience of working with these drivers, meaning relation to the NORSTRAT scenarios that there should be less need for organisational learning in order to cope with them. However, integrating new The major focuses of the development projects are power production from large-scale hydropower or to strengthen transmission capacity from the north nuclear power projects is a different challenge from of Sweden to the south, and to connect Sweden integrating more distributed and uncertain wind power with neighbouring countries such as Lithuania and projects. In addition, working for market integration at Germany. This means that the locations of the ongoing the Nordic scale is less complex than doing the same and planned development projects (Figures A1 and A3, on a European scale. Appendix B) coincide well with the modelled needs (Figure 7). Svenska Kraftnät published its development plan for the Swedish transmission grid, Perspektivplan 2025, in Quantitative data about each project’s contribution to 2013 (Svenska Kraftnät 2013a). The plan identifies a capacity would be needed to make a thorough analysis number of necessary development projects.8 The report of the planned projects against the modelled need for divides Sweden into four bidding areas, SE1–SE4, and increased capacity. This information is not always the projects are presented according to which of the available from the accessible open sources used in four they are located in. The plan lists “key challenges” this study. However, some more specific data can be for each bidding area, but a common challenge in found. Svenska Kraftnät states in its development plan each is to connect wind power. Although expressed that the ongoing and planned projects will increase somewhat differently, all the bidding areas also face transmission capacity between SE3 and SE4 by more the challenge of increasing transmission capacity than 2000 MW (Svenska Kraftnät 2013a: 85) and from north to south, which in the case of SE4 means that it currently sees no need for further increases in increasing transmission capacity to Europe. In each transmission capacity between these two areas. A case, this is to overcome the persistent spatial mismatch comparison with modelled need shows the current between the production and consumption of electricity. level is more than is needed in the Carbon Neutral Other challenges include adapting to increased power (1250 MW) and Pure RES (800 MW) scenarios, but production in Norway and Finland (SE1), increased will fall short in the European Battery (4500 MW) and output from the nuclear power plants (SE3) and grid the European Hub (8500 MW) scenarios. weaknesses (SE2 and SE4). All the projects included in the development plan are listed in Appendix B (Table The NordBalt project to connect Sweden and Lithuania A3). The contemporary drivers of transmission grid will have a capacity of 700 MW (Government Office development are summarised in Box 2. of Sweden 2010). For this connection, the NORSTRAT modelling shows no need to increase the capacity of Carbon Neutral and Pure RES, but a need to increase the capacity of European Battery (1250 MW) and European Hub (1750 MW). Both the latter projects fall between what is required given the current transmission 7 www.svk.se/Projekt/Utbyggnadsprojekt Last accessed capacity from the Nordic countries to Europe, and what 2014-09-29 would be needed if this capacity were to be increased. 8 For an introduction to the process of identifying and selecting these projects see section 6.2.2.

16 stockholm environment institute

The larger transmission grid development projects are planned to take 8–10 years. About one year is added for planning appeals.9 If transmission grid projects take 10 years, at least three iterations of projects should be possible between now and 2050, leaving time to identify, prioritise and propose the projects needed. This means that even if the projects planned today are of insufficient capacity to meet the modelled needs, there will be time for additional projects to be developed to abate this problem. These projects will not be planned, however, until the scenarios and models used by Svenska Kraftnät show that there is a need for them. The planning practice of Svenska Kraftnät is discussed further in section 6.2.2. One potential problem related to the pace of development is that the time needed to develop new transmission capacity might create market problems for wind power, at least in the north of Sweden. This situation might lead to more wind power being located in the south of Sweden.

9 Personal communication, Svenska Kraftnät, 3 October 2014.

17 developing sweden’s transmission grid: what are the drivers and barriers?

6 DRIVERS OF AND BARRIERS TO DEVELOPING THE TRANSMISSION GRID

his chapter identifies and analyses the drivers of and that at least 20 % of the energy used in the European Tbarriers to transmission grid development, based Union should come from renewable energy sources by on the hypothetical drivers and barriers presented in 2020.11 The target is mandatory and binding, but the 20 section 2.3: % target is an average for the entire EU with specific targets for each member state. • Formal institutions • Normative and cognitive rules For Sweden, a country that already generated a large • Actors share of its energy from renewable sources in 2009 • Technology (47.3% according to Government Offices of Sweden • Landscape signals 2012), the EU 20-20-20 targets resulted in a binding • Niche drivers agreement that at least 49 % of its energy use should be supplied by renewable energy by 2020. Based on this, the Swedish government decided to set up a national 6.1 Formal institutions binding target that 50 % of the energy used in Sweden in 2020 should come from RES. This section introduces a selection of the formal institutions, such as directives, regulations, and so The RES Directive also states that all EU member states on, related to transmission grid development. It is are required to adopt a National Renewable Energy by no means an exhaustive exploration, but has been Action Plan (NREAP).12 These plans, which must be delimited to those formal institutions most relevant prepared in accordance with a template published by to transmission grid development. A more in-depth the European Commission, should provide detailed analysis would include the Kyoto Protocol, the roadmaps for how each member state is working to Swedish national environmental quality objectives and reach its legally binding 2020 target for the share of the Swedish Environmental Act, among others. renewable energy in their final energy consumption. Each member state was also requested to submit a EU Internal Energy Market progress report every other year, starting in December Between 1996 and 2009 there were three legislative 2011,13 describing its promotion and use of renewable packages aimed at supporting the integration of energy. In addition to the EU-28, the EEA countries of national energy markets into a single EU Internal Norway and Iceland have also committed to draft and Energy Market (IEM).10 As section 4.5 describes, submit an NREAP as well as progress reports. packages focused on establishing common rules for the generation, transmission and distribution of electricity Article 13(1) of Directive 2009/28/EC demands that by facilitating cross-border trading of electricity, the NREAP must address administrative procedures regulating the terms under which access to cross-border and spatial planning, including: “current national and networks takes place, achieving greater transparency (if applicable) regional legislative rules for approval, in the wholesale market, and establishing mechanisms certification, licensing procedures and spatial planning for assessing compensation between different national applied to plants and associated transmission and operators. The basis for the IEM can be found in the distribution network infrastructure”. Single European Act, established in 1986, which grew out of a wish for a unified European market in which Moreover, article 16 of Directive 2009/28/EC states harmonised laws and policies would facilitate free that: Member States shall take the appropriate trade among all the EU member states. steps to develop transmission and distribution grid infrastructure, intelligent networks, storage facilities RES Directive 2009/28/EC, incl. NREAP Directive 2009/28/EC, also known as the Renewables 11 Directive 2009/28/EC, http://eur-lex.europa.eu/legal- Directive or the RES Directive, published in the Official content/EN/ALL/?uri=CELEX:32009L0028 Journal of the European Union in April 2009, states 12 Article 4 of Directive 2009/28/EC requires member states to submit national renewable energy Action Plans. 10 Fact sheet on the European Union: Internal Energy Mar- ket, http://www.europarl.europa.eu/aboutparliament/en/ 13 Article 22 of Directive 2009/28/EC requires Member displayFtu.html?ftuId=FTU_5.7.2.html States to submit a progress report every year.

18 stockholm environment institute

and the electricity system, in order to allow the secure capacity of the national grid in order to make the operation of the electricity system as it accommodates electricity market function (i.e. to avoid power being the further development of electricity production from locked in). Integrating new wind power production renewable energy sources, including interconnection was said to be a key driver of grid development in between Member States and between Member interviews with representatives of Svenska kraftnät: States and third countries. Member States shall also “An increased connection of renewable energy leads to take appropriate steps to accelerate authorisation a greater surplus [of power], and in order to reach the procedures for grid infrastructure and to coordinate goal of a well integrated electricity market you have to approval of grid infrastructure with administrative and have somewhere to dispose of the surplus”.17 planning procedures. The connection obligation is designed to be neutral From the NREAP, it can be concluded that the European in terms of technology and energy sources. There Commission clearly recognises the importance of are no formal regulations for prioritising renewable transmission to successful RES integration. energy sources in Sweden. In Denmark, however, RES electricity has had priority access to the electricity grid Nordel and Nord Pool for since 1999 (Klima- og energiministeriet 2010: 26, The Nordic countries have a long tradition of 61). cooperating on electricity-related issues, but it was not until 1963 that the cooperation was formalized by the The electricity certificate system establishment of Nordel. The key objective of Nordel The Swedish system of electricity certificates came was to provide advice and make recommendations on into force in 2003. It is described as a market-based developing an efficient power system in the Nordic support system aimed at increasing the production of region, and to create the conditions for a harmonised renewable energy in a cost-efficient way.18 The goal Nordic electricity market. This was done by developing of the system was to contribute 25 TWh of renewable master plans and grid codes for the Nordic grid, energy in 2002–2020. agreements for systems operations and principles for balance management. Nordel also provided a forum The state assigns energy certificates to the producers of where the Nordic TSOs and other market actors renewable energy for each MWh of renewable energy could meet. Nordel was wound up in 2009, when produced. The certificates are then sold on an open ENTSO-E was established.14 Another relevant formal market where the price is determined between buyer institution at the Nordic level is the Nord Pool spot and seller. Buyers of the certificates are actors with a market. Nord Pool is owned by the Nordic and Baltic quota obligation, mainly energy distributing companies. transmission system operators.15 The green electricity The electricity certificate system thus provides an extra certificate market, discussed in section 6.1.5, also source of income for producers of renewable energy. belongs in this category. The assigned electricity certificates are time-limited, meaning that each production facility gets certificates The connection obligation only for the specific period of time specified in the Act The connection obligation established by the Swedish on Electricity Certificates (2011: 1200). Electricity Act obliges Svenska Kraftnät as well as District System Operators (DSOs) to connect all new That the quota obligation is set for the amount of power production (Swedish Electricity Act 1997: 857). energy produced means that it is weather-sensitive. A lot of the new RES production, however, will not be Mild winters decrease the demand for energy and directly connected to the national grid but, depending on thus lead to a price drop for the electricity certificates. its production capacity, connected to local and regional The same happens as the supply of energy certificates grids.16 There is a need to increase the transmission till stamnätet (Guidance for connecting to the national 14 https://www.entsoe.eu/news-events/former-associations/ grid). nordel/Pages/default.aspx 17 Interview, Svenska Kraftnät Planning Unit, 22 April 15 Statnett, Svenska Kraftnät, Oyj, , Eler- 2014. ing, and Augstsprieguma tikls. http://www.nord- 18 Swedish Energy Agency ”Om elcertifikatsystemet” poolspot.com/About-us/ (“About the Electricity Certificate System”), http:// 16 Only production plants with an output of more than 100 www.energimyndigheten.se/Foretag/Elcertifikat/Om- MW can be connected to the 220 kV grid. An output of elcertifikatsystemet; Swedish Government “Elcertifikat- more than 300 MW is needed to connect to the 440 KV systemet” (“The Electricity Certificate System”) http:// grid. Svenska Kraftnät (2012) Vägledning för anslutning www.regeringen.se/sb/d/18457.

19 developing sweden’s transmission grid: what are the drivers and barriers?

increases, through an increase in the production of were also seen as part of the development of a unified renewable energy. This means that the energy certificate European electricity market. system is to some extent self-regulating with negative feedback loops because the more renewable energy The Swedish Energy Markets Inspectorate produced, the less income there is for each MWh of (Energimarknadsinspektionen-EI) presents a wind energy produced. The latter has been dealt with complementary, and perhaps more pressing reason within the system, through a gradual increase in the behind the change. 21 In 2006, Dansk Energi, the Danish quota obligation from 7.4 % in 2003 to a maximum of TSO, reported Svenska Kraftnät to the European 19.5 % in 2020. Thereafter the quota obligation starts Commission, alleging that on several occasions it had to decrease to 0.8 % by 2035. That the system peaks restricted the transmission of electricity from Sweden in 2020 means that the economic situation for wind to Denmark, something that Dansk Energi claimed was power will be quite different in just a few years. Given against the Directive on a unified energy market. The that the process of implementing a wind power plant is reason for the restrictions was that the Swedish national quite lengthy, often 4–5 years, this has already resulted grid had insufficient capacity to transport electricity in uncertainty regarding the viability of planned wind from the north of Sweden to the south, leading to a risk power projects. of power shortages in the south of Sweden.

Sweden and Norway have had a joint market in In June 2009, the European Commission stated in a electricity certificates since 1 January 2012. A Preliminary Assessment that Svenska Kraftnät’s way of bigger market is thought to function better, through deal with the congestion might breach the competition increased liquidity and turnover and better competition regulations. Svenska Kraftnät did not agree with contributing to more cost-efficient development of the preliminary assessment but, in order to meet the renewable energy production. The target for this joint concerns expressed by the Commission, it decided market is to contribute 26.4 TWh of extra renewable to make voluntary commitments in September 2009. energy production by 2020 compared to 2012 levels.19 After an investigation carried out in 2007, in which The joint electricity certificate market is also an different options for dealing with the transmission important step towards a unified Nordic electricity system congestion were explored and evaluated,22 market. Svenska Kraftnät responded to the Commission’s The electricity certificate system influences the need Directorate General on Competition with a proposal for transmission grid development indirectly by for dealing with the congestion in a way that did not supporting the development of renewable energy limit the export of electricity: production. The connection obligation means that the Swedish TSO, Svenska Kraftnät, is obliged to connect Svenska Kraftnät commits to subdivide the Swedish all energy production facilities of a certain output electricity market into two or more Bidding Zones, capacity to the national grid. Svenska Kraftnät is not and operate the Transmission System on this basis by obliged to pay the cost for this connection, however, as 1 November 2011 at the latest. … From the date the this falls on the producer requiring the new connection. Bidding Zones are operative, Svenska Kraftnät shall As is further described in section 6.2.5.5, this cost has manage Congestion in the Swedish Transmission been recognised as one of the key bottlenecks in the System, with the exception of Congestion in the West- development of new renewable energy production. Coast Corridor, without limiting Trading Capacity on Interconnectors (Svenska Kraftnät 2007: 4). Bidding areas In November 2011, Svenska Kraftnät divided up the The European Commission accepted these then unified Swedish energy market into four bidding commitments and made them binding in April 2010. areas. According to Svenska Kraftnät, this was to make the bottlenecks in transmission capacity more visible,20 Formal procedure for getting a concession and get a better indication of where power production The permission to develop and use a transmission line needed to increase in order to reduce the need for is called a concession. In Sweden, the Electricity Act long-distance power transmission. The bidding areas (Ellagen) and the Electricity Ordinance (Elförordningen)

21 http://www.energimarknadsinspektionen.se/sv/el/ 19 Government Proposition 2009/10:133, “Höjt mål och elmarknader-och-elhandel/elomraden/ vidareutveckling av elcertifikatsystemet”. 22 Energimarknadsinspektionen, Svenska Kraftnät, Svensk 20 http://www.svk.se/Start/English/Operations-and-market/ Energi och Svenskt Näringsliv (2007) Prisområden på Bidding-areas/ elmarknaden (POMPE). Joint report. EMIR 2007:2.

20 stockholm environment institute

regulate the process of granting concessions. The 6. Permits process also involves other formal institutions such A specific type of permit is needed to construct as the Environmental Act (Milljöbalken) and the a line: a concession. NUTEK25 administered Planning and Building Act (Plan- och bygglagen). The concessions until 1997, when the Swedish Energy established procedure involves a number of steps,23 Agency took over (Swedish National Audit Office which are described briefly below: 2013a). The Swedish Energy Market Inspectorate (Energimarknadsinspektionen, EI) has administered 1. Pre-study/feasibility study this since 2008. Svenska Kraftnät prepares and Exploring different options for the line and how submits the concession application. The EIA and these options affect the landscape, the built the consultation reports are part of this application. environment, the natural and cultural environments, The EI sends a request for comments to affected outdoor activities and natural resources. property owners, government authorities and other stakeholders to obtain feedback on the planned 2. Pre-study consultation route. If no one objects to the planned project the The pre-study is presented and all comments are EI can issue a concession. Otherwise, the EI hands documented in a consultation report. the case over to the government. A decision on the concession is then made by the government after 3. Choosing an option another consultation with all the parties concerned. Svenska Kraftnät chooses one of the alternatives, In case of an international connection, the EI having taken all comments into consideration, and administers the application and passes it, together based on the inventories done in the pre-study phase. with a recommendation, to the government for a decision. Other permits might also be needed, such 4. Inventory as exemptions from shore protection or habitat A more thorough inventory of the selected option protection obligations. is carried out. This demands that property owners grant Svenska Kraftnät permission to access and 7. Land lease agreement inventory their properties. The inventory includes Svenska Kraftnät draws up a land lease agreement ground properties and species, and marking the governing its rights and obligations and those route of the line with sticks. of the property owner. By signing the land lease agreement the property owner agrees that the power 5. EIA line can be built on a fixed route across the property. An Environmental Impact Assessment (EIA), or Signed land lease agreements are converted into miljökonsekvensbeskrivning (MKB), is carried out, easements. An easement allows an owner of utility which analyses in more detail how the proposal lines to construct, keep and maintain power lines could affect the built environment, landscape and on someone else’s land. An easement is tested and cultural values. This also includes suggestions approved by the Swedish mapping, cadastral and for mitigation or compensatory measures that land registration authority (Lantmäteriet). This right could decrease the negative impact on the area. applies in perpetuity. If Svenska Kraftnät is not able The EIA serves as the basis for a second round to agree a land lease agreement with the property of consultations, which are documented in a owner, the issue is addressed according to the consultation report. It is the county administrative easement ordinance framework.26 board that decides whether the project is expected to result in substantial environmental impacts. If that is 8. One-off compensation the case, an extended consultation must take place.24 Svenska Kraftnät makes a one-off payment to affected property owners for easement. Compensation is paid under the Expropriation Act.

9. Construction starts 23 This description is based on how Svenska Kraftnät describes the process on its website, www.svk.se/Pro- jekt/Samradsprocessen. See the study by Albrecht (2012) and the audit report by the Swedish National Audit 25 NUTEK was the National Industrial and Technical Organisation (Swedish National Audit Office 2013a). Development Administration, established in 1991 and abolished in 2009. 24 Chapter 6, 4 § Swedish Environmental Act (1998: 808) (Miljöbalken) 26 Utility Easements Act

21 developing sweden’s transmission grid: what are the drivers and barriers?

Today a concession is valid for 40 years, after which future research in this area, however, they are beyond a new concession must be applied for using the same the scope of this study. procedures as for a new line. The government has proposed, however, that concessions should remain Cognitive rules include the knowledge base on which valid until further notice.27 The government is also actors draw for decision making, as well as how suggesting that the EI should decide on cases where problems are defined and feasible solutions identified. stakeholders oppose the project. It also includes how formal institutions, such as laws and regulations, are understood and put into practice. It is also relevant to note that electricity grids must not The cognitive rules influence how key actors such be established contrary to the development plan, or area as Svenska Kraftnät make investment decisions and provision in areas that are included in such documents. technology choices that may or may not support 28 If a development plan needs to be amended, this can RES integration to the extent needed to meet the take 12 to 18 months (Government Office of Sweden NORSTRAT targets. 2010: 58). Normative rules of Svenska Kraftnät Summing up formal institutions Swedish power production is already close to being Across the formal institutions investigated, Directive fossil-fuel-free.29 Svenska Kraftnät sees this an 2009/28/EC and the electricity certificate system opportunity, and thus also a responsibility, to help to are clear drivers of transmission grid development. reduce other countries’ power production- related They contribute to the establishment of new power GHG emissions by exporting “clean energy”: production from renewable energy sources, which, due to the connection obligation, forces Svenska Kraftnät If you look at the Nordic system, and especially the to develop the national grid. The connection obligation Swedish system, there is only a very small amount of is not a driver in itself, but rather a formalized absence CO2 emissions coming from electricity generation, of barriers to the connection of new power production. because we have nuclear power, hydropower and now wind power... so there is really nothing to replace in The bidding areas can be seen as a driver of Sweden. So the political goal of having such large transmission grid development since, by translating the amounts of renewables is to get it down to the EU, so it spatial mismatch and congestion into electricity prices, can replace any other production, given that the power they demonstrate that there is a need for further grid production from hydro and nuclear remains the same investment to remove the price differences. However, as today.30 it should be noted that the price differences between the bidding areas are on average quite small. Through increased trading capacity between Sweden and the outside world, Swedish power production The formal procedure for getting a concession from wind, water and nuclear can replace fossil fuel- cannot be regarded as a driver. The many steps and based power production in other countries. This means iterations required to get a concession could make lowering CO2 emissions and thereby benefits for the the procedure a barrier, but in order to establish this a global environment. (Svenska Kraftnät 2013a) fuller understanding of how the procedure plays out in practice would be required. Svenska Kraftnät’s planning practices In 2010 it was decided to develop a longer-term plan 6.2 Normative and cognitive rules for the development of the Swedish national grid. The first long-term investment plan for Svenska Kraftnät This section examines the normative and cognitive was presented in 2013. Until then, investment planning rules that apply to transmission grid development. The had been set out in three-year plans (Swedish National analysis of normative rules focuses solely on Svenska Audit Office 2013a; Swedish National Audit Office Kraftnät as the key actor. The normative rules of the 2013b: 3). The reason for such short-term planning was municipalities and county administrative boards would that investment levels had been quite low. In the period be relevant at the regional and local levels, as would those of the trade bodies for agriculture and forestry. 29 Currently, 97 % of Swedish power production comes While these provide an interesting entry point for from energy sources with very low GHG emissions, mainly from hydro, nuclear and wind power plants. See 27 Government Proposition 2012/13:70 “Prövning av nät- www.svenskenergi.se koncession”. 30 Interview, Svenska Kraftnät, Planning Unit, 22 April 28 Chapter 2, section 8, Swedish Electricity Act. 2014.

22 stockholm environment institute

Figure 8: Svenska Kraftnät’s investment plans and outcome figures, 2001–2012. Source: Based on data from the Swedish National Audit Office (2013: 3, p. 39)

1992–2008, Svenska Kraftnät interpreted its role as market. The models are used to prioritise between managing the existing grid in a cost-efficient way. This projects, and to get an understanding of who should is one possible explanation why, as is shown in Figure 8, bear the costs of new international connections. Power the gap between planned and actual investment was market benefit is calculated as: quite large. While many projects were delayed, that does not explain all the discrepancies. These numbers producer benefit + consumer benefit + changes in can be compared with the current investment plan for bottleneck revenues 2014–2016 (Svenska Kraftnät 2013b), which includes investment of sek 14 200 million – a ten-fold increase The necessary power market benefit is defined as the over ten years compared to the investment plan for benefit needed to pay back investment costs within 30 2004–2006. years at an interest rate of 5 % (Swedish National Audit Office 2013a). The need for increased investment had many causes. In the development plan (Svenska Kraftnät 2013a) To further increase the quality of the investment Svenska Kraftnät highlights three key drivers of planning process, Svenska Kraftnät also makes use of upcoming investment: connecting new power scenario planning (Svenska Kraftnät 2013).33 Scenarios production, maintaining security of supply through are developed to make the plans as resilient, robust reinvestment and strengthening market integration. To and/or adaptable as possible. An understanding of how manage the increased investment, Svenska Kraftnät these tools are constructed and used can provide useful identified a need to develop a systematic way of insights into the investment planning process. prioritising investments, and to incorporate functions into the organisation that could provide the decision In its development plan, Svenska Kraftnät describes a support needed (Swedish National Audit Office 2013a; number of scenarios for the North European electricity Swedish National Audit Office 2013b: 3). Svenska system in 2025, which were used to develop short- Kraftnät’s remit states that the national grid should and long-term plans for grid development (Svenska be developed based on socio-economic profitability Kraftnät 2013a). The main scenario, Perspective 2025 analyses.31 In practice, Svenska Kraftnät interprets (PP2025), is based on the national targets and action this to mean undertaking analyses of the cost of plans (NREAP) for renewable energy. investment alternatives and of how these would benefit the electricity market (Swedish National Audit Office In PP2025, Swedish hydropower production is 2013a; Swedish National Audit Office 2013b: 3).32 The assumed to be 66 TWh in a normal year, in line with analysis of market benefits is carried out by modelling current levels. Total Swedish wind power production how different projects would influence the energy is assumed to be c. 17 TWh, an increase of 150 % on 2012 levels. Nuclear power is assumed to contribute 31 3 §, förordningen (2007:1119) med instruktion för 73 TWh, which is in line with the long-term prognosis Affärsverket svenska kraftnät. made by the Swedish Energy Agency in 2010 (Swedish 32 Interview, Svenska Kraftnät, Planning Unit, 22 April 2014; Interview, Svenska Kraftnät, Market Unit, 22 33 Interview, Svenska Kraftnät, Market Unit, 22 April April 2014. 2014.

23 developing sweden’s transmission grid: what are the drivers and barriers?

National Audit Office 2013a; Swedish National Audit impact on the need for transmission capacity internally Office 2013b: 3). Thermal power, together with in Sweden, especially in a north-south direction. industrial counter-load, is assumed to be 20–22 TWh, the majority of which is assumed to be bio-based. • VIND1 is based on the applications that are handed in to Svenska Kraftnät. This assumes that most of All the scenarios used in the Perspective Plan assume the new wind power will be located in SE3 and an increase in energy use, also based on the long-term SE2. Almost all the new wind power is land-based. prognosis made by the Swedish Energy Agency in 2010 (Swedish National Audit Office 2013a; Swedish • In VIND2 more of the new wind power is located National Audit Office 2013b). This is based on an in the north of Sweden, but again the majority is assumption of continuing economic growth without land-based. substantial increases in energy efficiency. In the scenario with the strongest economic growth, Swedish • In VIND3 it is assumed that offshore wind power electricity use is assumed to be 158 TWh in 2025. In a will grow substantially, and be located fairly scenario with lower economic growth, electricity use is equally across SE4, SE3 and SE2, with a smaller assumed to stay at 150 TWh. Svenska Kraftnät sees it as share in SE1. important that the Swedish national grid can withstand the load caused by strong economic growth, and for this All power balance prognoses point to a surplus of reason it uses such growth in the key scenario in their power in Sweden, albeit with a fairly wide range of analysis. The geographical distribution of energy use possible outcomes. Steady growth in RES has been is assumed to remain the same as today, which means assumed in all projections of the power balance. The that the biggest increase in power use in absolute terms main scenario (PP2025) is expected to result in a will be in SE3 and SE4. surplus of 19 TWh per year. The smallest surplus (15 TWh/year) emerges from a future with a low level of Several sub-scenarios for wind power highlight the nuclear power production (70 TWh) and high energy perceived large uncertainties associated with this type use due to strong economic growth (158 TWh). The of energy source. Three scenarios are presented in biggest surplus (30 TWh) results from a future with a the development plan. They differ mainly in terms of high level of nuclear power production and low energy the assumptions made about the localization of wind use. These estimates are based on a normal year. power and the installed production capacity (Table 3). Including annual fluctuations, the surplus is projected Where the new wind power is located will have a great to be somewhere between 0 and 45 TWh annually. If

Table 3: Installed production (TWh) of wind power in three wind power scenarios.

Total VIND1 SE1 SE2 SE3 SE4 (TWh) Land based 2.7 4.6 7.0 2.4 16.7

Offshore 0 0 0 0.5 0.5

Total 2.7 4.6 7.0 2.9 17.2

VIND2 Land based 6.6 6.1 3.5 2.4 18.6

Offshore 0 0 0 0.5 0.5

Total 6.6 6.1 3.5 2.9 19.1

VIND3 Land based 0.9 5.2 3.9 1.5 11.5

Offshore 0 0.8 2.0 5.0 7.8

Total 0.9 6.0 5.9 6.4 19.3

Adapted from Svenska Kraftnät (2013, p. 46)

24 stockholm environment institute

the national balancing capacity is insufficient, perhaps New nuclear reactors in Lithuania and northern because of the need to save water in hydropower dams are also assumed. It is assumed that nuclear power will or due to the flexibility of demand, the energy balance have been phased out in Germany. highlights the need for international transmission capacity. To assess this, Svenska Kraftnät has modelled Power exports from the Nordic countries to the how a number of possible outcomes would influence European continent have a clear impact on the need the annual net flows of power from, to and within for transmission capacity within the Swedish national Sweden. This modelling is used to assess the need for grid. Without the planned cables from Norway to new international cables (Svenska Kraftnät 2013a). Germany and the U.K., transmission from the south of Norway to Sweden will increase considerably In the Perspective Plan, Svenska Kraftnät states that (Svenska Kraftnät 2013a). changes to the national grid are to be made with a national, Nordic and European perspective in mind. These different scenarios, or state variables, are used The reasons for this can be found in the common as inputs to a market model study, which aims to get a Nordic electricity market, the Swedish-Norwegian better understanding of the implications for increasing electricity certificate system and the ambitions for a transmission capacity (Svenska Kraftnät 2012a). In unified European power market. This means that when addition to power production and power demand, the planning for the future of the Swedish national grid, model includes variables such as fuel prices, CO2 Svenska Kraftnät needs to take the plans of other TSOs prices and transmission capacities between different into consideration. For instance, in order to increase bidding areas (Svenska Kraftnät 2012b. Variations market integration and avoid lock-ins of renewable in production are modelled over the year. Variations , it will not be sufficient to strengthen in demand are modelled in two ways: without price transmission capacity through and out of Sweden. sensitivity but with seasonal fluctuations throughout the This is because there is already a surplus of power in year; and as price-sensitive, where demand decreases if northern Germany. Thus, for the benefits of an increased the spot price exceeds certain levels. transmission capacity between Sweden and Germany to be realized, Germany’s internal transmission Not all of the projects originate from these models. As capacity needs to be increased too. A similar example one respondent at Svenska Kraftnät describes it: “Some can be found in a new connection between the north of the development projects are based on political or of Sweden and Finland. For the benefits of this to reasoned decisions about need, and some are based on be realized, the internal transmission capacity of energy balance studies and grid studies. So there is a both Sweden and Finland must be strengthened first combination of motives at play”.34 (Svenska Kraftnät 2013a). Transmission grid development is driven by identified Since the power systems of the Nordic countries are so needs to expand or strengthen the grid. As is mentioned well integrated, changes in the other Nordic countries above, Svenska Kraftnät sees three main drivers of this have a clear impact on the Swedish system. Increased need: new power production, reinvestment and market integration with the and Europe means integration. However, these drivers work in quite that Svenska Kraftnät needs to consider not only how different ways, influencing how far the related need power production will develop in Sweden, but what for investment can be foreseen and planned for. While is happening in neighbouring countries. Scenarios are there is quite a good understanding of where and when used here too. These include assumptions about power there is a need for reinvestment in the grid, connecting production in the other North European countries. For new production, mainly wind power, carries larger example, it is assumed that hydropower production uncertainties with regard to the location, timing, type in Norway will increase to 136 TWh in a normal and volume of new power production. An exception to year, through investments in small-scale hydropower this is the planned increase in output from the nuclear projects in northern Norway and on Vestlandet. In power plants. Market integration, and its need for Finland it is assumed that hydropower production will international connections, falls somewhere between be around 14 TWh in a normal year. It is assumed that the two. On market integration, Svenska Kraftnät nuclear power production will increase in Finland by together with the TSOs of the other nations have more the provision of one (Olkiluto 3) or two (Olkiluto 3 direct power over the planned investment. At the same + a new one at Pyhäjoki) new nuclear reactors. New time, however, this calls for substantial cooperation reactors in Finland will contribute to a decreased flow through Sweden, but only if transmission capacity 34 Interview, Svenska Kraftnät, Market Unit, 22 April through the Finnish internal bottleneck P1 is improved. 2014.

25 developing sweden’s transmission grid: what are the drivers and barriers?

and agreement regarding location, timing and the • A complex consultation process involving many distribution of costs. In addition, as can be seen in the iterations, where e.g. property owners are asked case of SydVästlänken, the factors that influence the their opinion an average of four times, transmission grid landscape are in constant flux, giving even signed agreements a somewhat limited shelf life. • Late responses to the consultation processes,

Concession application process in practice • Inconsistencies in the way the county The lengthy concession processes is one of the key administrative boards handle the EIA and respond reasons why transmission grid projects are so delayed to consultations, (Swedish National Audit Office 2013a; Swedish National Audit Office 2013b: 3; Government Office • Ambiguity over which actors should be seen of Sweden 2010). This in turn influences the pace as particularly concerned, where the Electricity at which large amounts of renewable energy can be Act and the Environmental Act have different introduced to the power system: “It is often the lead interpretations, times in the grid connection that are limit-setting in the establishment of large wind farms; and within the grid • Poor quality or unclear communication from connection it is the lead times for matters relating to Svenska Kraftnät regarding choice of location and licences that set the limits. It is difficult to say whether technology (ground or overhead line), this is due to unnecessary obstacles or disproportionate requirements in relation to the approval procedure at • Inconsistent or obscure interpretations of the the present time. The government believes that it is way in which “socio-economic profitability” is of vital importance to review the processes for grid interpreted and assessed, connection/enhancement/expansion” (Government Office of Sweden 2010: 26). • Different opinions on magnetic fields across authorities, and In its audit of the government’s governance of electricity transmission grid development, the • The failure of the Swedish Energy Agency to Riksrevisionen (Swedish National Audit Organisation, designate areas of national interest for power NAO) looked at why the permission process for transmission. transmission grid projects takes so long, and whether anything can be done to speed it up (Swedish National Together, these issues result in a situation in which the Audit Office 2013a; Swedish National Audit Office time needed to get a concession is difficult to estimate: 2013b: 3). This part of the audit is based on documents “It is very hard to foresee how long the permission from concession processes from 1996 to 2011, as well processes will take. They take a long time, because as on interviews with the relevant authorities and of all steps and appeals. But above all it is hard to other stakeholders. The NAO concluded that the lead- foresee. We have had projects that have gone through time for concessions, including new applications and relatively swiftly, and we have had projects that take a renewals, was on average 801 working days, or about really long time. And of course, if you are dependent on three years. There were however large differences a new line to build your wind power plant, you are in a between projects: some took more than 10 years, others difficult situation”.35 just over a year (Swedish NAO 2013: 58). These issues often imply a lengthy process, where One explanation for this is that there were a great ambiguities and obscurities result in conflicts, appeals number of concession applications in the late 1990s and the need to redo parts of the application. Yet, from because the grid companies wanted to submit their Svenska Kraftnät’s perspective, there is no need to applications before the Environment Act came into speed up the process, at least not when it comes to the force in 1999. This took place at the same time as large involvement of stakeholders: reorganisations at NUTEK and the Swedish Energy Agency led to a loss of competence (Swedish National Even though it would be beneficial for us to speed up Audit Office 2013). Other key issues identified, the permission process, you can’t deny that, you have (Swedish NAO 2013: 59–74), which are more relevant to be careful so that you do not do away with the rule to the present situation, were: of law. Because, you know, it is a democratic process.

• Incomplete applications, especially for those to 35 Interview, Svenska Kraftnät, Planning Unit, 22 April renew concession, 2014.

26 stockholm environment institute

From the perspective of the rule of law they have to be and development of the infrastructure, but we are able to do that. Of course they do. People have to be opposed to technology that involves overhead power able to express their opinions. But then, of course, it lines. We are talking about electromagnetic radiation, does lead to these long processes and repeated appeals but above all the proposal means that large areas of and referrals. But that is something that we can do very forestland must be removed from use where the power little about: something that we shouldn’t do anything line is located. It is unacceptable” (Barometern about. 36 -Tidningen, 3 Sep. 2014).

Conflicts related to transmission grid development are The opposition is sometimes but not always well discussed further below. organised. In early September 2014, a meeting was held between the municipalities in , Discursive struggles: You can’t get away from the LRF and Södra Skogsägarna. The meeting was conflicts arranged by the head of the board of LRF South “Different interests are set against each other… local West and the economic-political (näringspolitisk) environmental concerns are weighed against the global coordinator at Södra Skogsägarna: “Now we feel that environmental benefits (…) and then you can not avoid we have come to an end. … Public bodies and power all such conflicts. (…) It’s the same with railways and companies need to sit down and think about how the highways, however you develop infrastructure there infrastructure will be designed in the future. We cannot will be conflicts, you can’t get away from it”. 37 claim agricultural and forest land all the time. Every single hectare of forestland will be needed in the At the local scale, transmission grid projects often future” (Smålandsposten, 3 Sep. 2014). In other cases, cause conflicts. Based on an analysis of news articles such as the conflict over creosote described below, and reporting on conflicts related to the SydVästlänken opposing actors have joined forces. project, the most common conflicts are linked to land use, the location of lines and whether they are Svenska Kraftnät sees the conflicts caused by overhead underground or overhead, and local environmental lines as understandable, but still argues in favour of concerns (such as creosote, see below). From the news them on grounds of cost and safety of operation: articles, a few actors stand out as more active in their opposition: municipalities, which often work through When you are out at consultation meetings there is their environmental administrations and/or through always discussion about overhead lines versus cable, the Land and Environmental Courts; the Federation and we show time and time again that we weigh the of Swedish Farmers (LRF); Södra Skogsägarna, an intrusion against safety of operation and the cost [of economic association of forest owners in the south building the line]. When we build lines, we identify of Sweden; and Naturskyddsföreningen, the Swedish the corridors that satisfy Svenska Kraftnät’s own Society for Nature Conservation (SSNC). commitments on magnetic field, for example, which sometimes unfortunately means that one or more Location and land use buildings must be redeemed or offered redemption, if The Swedish NAO identifies objections by affected we cannot find any other solution. But, it is still a cost property owners as a key reason why permit processes and safety issue, because we estimate that underground take such a long time, and points out that the government cable systems are worse in terms of operational safety. has an important role in managing the conflict of So we have an incentive, a societal incentive, not to interest between shortening the permit process for have too much cable. [Overhead lines] are the most the national grid, on the one hand, and the influence secure, and the overall best solution, if you also take that specific affected property owners have over the into consideration that the cost of constructing an expansion of the national grid, on the other (Swedish underground cable is perhaps ten times more than an National Audit Office 2013a; Swedish National Audit overhead line. So overhead lines are the best option, Office 2013b: 3). In one of the conflicts related to despite the intrusion that actually occurs. We do not sit SydVästlänken, the head of municipality, here and say that there is no intrusion, because there through which Sydvästlänken will pass, expressed the undoubtedly is.38 conflict as follows: “We are not against the expansion

36 Interview, Svenska Kraftnät, Planning Unit, 22 April 2014. 37 Interview, Svenska Kraftnät, Market Unit, 22 April 38 Interview, Svenska Kraftnät, Planning Unit, 22 April 2014. 2014.

27 developing sweden’s transmission grid: what are the drivers and barriers?

Creosote the court to request Svenska Kraftnät to cease the Another recent conflict revolved around the use construction work until the court had made its ruling of creosote to impregnate the foundations for the (Vetlandaposten 18 Oct. 2013). The court rejected poles. Creosote is a carcinogenic substance used to that request, however, and the construction continued impregnate . Use of the substance is restricted (Vetlandaposten, 18 Nov. 2013). On both appeals, the but not forbidden. Alternative materials to creosote regional Land and Environmental court decided in impregnated wood are concrete and steel, both of which favour of Svenska Kraftnät.41 The municipalities then have been assessed as more problematic from a climate appealed to the Superior Land and Environmental change point of view, but also regarding emissions of Court (Mark- och miljööverdomstolen), which PBT-substances. From a lifecycle perspective, creosote concluded that there was no basis for bringing the case is a better option environmentally than concrete or to trial. This resulted in the verdict of the regional court steel (KemI 2011). In 2011, the European Commission being upheld. decided to allow the continued use of creosote until 2018, when the decision will be reconsidered: Wind power: Driver and uncertainty Wind power as a driver Now lately there has been a lot of concern about Between 2009 and 2012 the total contribution of wind creosote, but the background to that is that we believe power to electricity production in Sweden increased that creosote is the best option. Creosote is legal to from 2.5 to 7.3 TWh, an almost three-fold increase use, as was shown in a ruling just this week, so it is in just three years (Government Office of Sweden a reasonable position [for us to hold]. But it is also 2013; Government Office of Sweden 2012). In 2013 the case that creosote is in our opinion the best an additional 725 MW of wind power was installed, environmental solution when we look at the complete resulting in a total annual production capacity of 9.9 picture. We are aware that creosote can filter out into TWh (Swedish Wind Energy 2014). In 2014, Swedish the soil a few centimetres or decimetres, but if you look Wind Energy estimated that additional investment at the lifecycle cost of creosote versus concrete or steel, would lead to annual production of 11.3 TWh, a the environmental impact of using creosote is smaller. growth of 356 % in five years. Drawing further on the This is the kind of judgment we make. 39 prognoses of Swedish Wind Energy, it is estimated that wind power will contribute 18TWh of electricity by Yet, in the early summer of 2013, four municipalities 2017.42 This is based on ongoing construction projects in Jönköping County and two municipalities in where all permits have been granted, and projects in Östergötland County banned Svenska Kraftnät the process of getting permits, with each category from using creosote in the foundations for the new assigned a specific probability value. Assuming that the SydVästlänken (SouthWest Link) line (Nya Dagbladet, probabilities for realization are the same for land-based 5 Aug. 2013). Svenska Kraftnät decided to continue and offshore wind power plants, the vast majority (77 the construction work as planned, since the ban had not %) of the increased capacity will be on land. yet come into fore (Jönköpingsposten, 3 July 2013). “We will not allow this to delay the construction. We At the end of March 2014, the total capacity of will continue to build the way we think is best and ongoing construction projects where all permits had most environmentally sustainable” (Dagens Nyheter, been granted and projects in the process of getting 5 Aug. 2013). Svenska Kraftnät also responded by permits amounted to 24 TW (Swedish Wind Energy appealing the ban to Jönköping County Administrative 2014). Svenska Kraftnät writes in its Perspective Plan Board, which decided in favour of the municipalities, (Svenska Kraftnät 2013a) that formal applications to and to Östergötland County Administrative Board, connect wind power projects amount to 20 TW – twice which decided in favour of Svenska Kraftnät.40 The as much as the nuclear power plants provide and almost municipalities appealed the verdict by Östergötland 75 % of the total need for power in Sweden (Svenska County Administrative Board to the regional Land Kraftnät 2013b). If the applications submitted to the and Environmental Court in Växsjö, and Svenska regional and local grid companies in Sweden are also Kraftnät appealed the verdict by Jönköping County added, the sum of all the applications amounts to 140 Administrative Board to the same court. Nässjö % of Sweden’s maximum power need. While not municipality also sent a request to the court, asking 41 Personal communication, Svenska Kraftnät, 2 October 39 Interview, Svenska Kraftnät, Planning Unit, 22 April 2014. 2014. 42 This can be compared to scenario PP2025, on which 40 Personal communication, Svenska Kraftnät, 2 October Svenska Kraftnät bases its planning, in which wind 2014. power production is assumed to be 17 TWh in 2025.

28 stockholm environment institute

all of these projects will be realized, this extensive Barriers to wind power: Lead times development of wind power presents a substantive The long lead-in times for transmission grid planning challenge. development are a barrier to the introduction of large amounts of wind power. The lack of sufficient Wind power as a source of uncertainty: How much, transmission grid capacity, however, is to some extent when and where? related to the large uncertainties related to wind power The key uncertainties related to wind power are how establishment. As described in section 6.2.2, Svenska much of the planned capacity will realized, when the Kraftnät uses socio-economic profitability analyses capacity will be installed and where the new capacity and scenarios when deciding where and when to will be located. Each of these is linked to further develop the grid: uncertainties. The lead times are very long, we’re talking about 8 to • How much wind power investment there will be 10 years from the time we start looking at a project depends on how the electricity certificate system is until there is a line in place. And wind power may have designed after 2020, which in turn depends on EU a lead-time of 3 to 4 years. So there is a problem in climate and energy policy post-2020. A lot of the how far in advance can we justify developing the lines, planned projects will never be realised. Swedish when we do not know how much wind power will be Wind Energy assumes that even in the “high” realised, and what will happen with the will to invest. scenario, only 30 % of the projects with all the Because after all we can see today that when electricity required permits and 15 % of the projects in the prices go down, as they have done this winter for process of getting permits will happen (Swedish example, when it has been so mild, the incentives for Wind Energy 2014). new investment in wind power decrease.43

• When wind power capacity will be installed Barriers to wind power: Unsynchronised decision- depends on how smooth the permission processes making processes are, whether there is sufficient capacity in the grid There is also a risk that large-scale wind power projects or whether the grid needs to be strengthened before will end up in a catch-22 situation due to parallel, installation, as well as the electricity price and how paradoxical and unsynchronised processes for gaining the future of nuclear power will look. approval from the Environmental Courts and signing connection contracts with the TSO. • Where new capacity will be located depends on a number of drivers and barriers. The north of Svenska Kraftnät demands that all permits must be in Sweden is attractive because it is often easier to place before it commences a technical pre-study and get the permits there, but also because there are signs a connection agreement.44 It is also not until favourable physical conditions. However, if the an agreement is signed that an applicant gets a first transmission capacity between the north and the estimation of the cost (Second Opinion 2011). This south of Sweden does not increase substantially means that a wind power entrepreneur must go through there is a risk that new production will be locked the full permit process in order to get a full understanding in to this bidding area, causing electricity prices to of the costs of and the time frame for getting connected. fall and thus decreasing the return for wind power At the same time, the Environmental Court wants to entrepreneurs. This could in turn result in more be certain that the project will get connected before it wind power being established in the south. makes its decision (Second Opinion 2011). Moreover, after signing the contract it can take many years to get One way to handle the uncertainties related to wind connected: “If it is a new line that is needed, that can power establishment is through scenario planning, as take 8 years, if it is a station that needs to be upgraded, described in section 6.2.2. To provide inputs into the that can take three years. And that leaves the wind scenarios and other planning, the Swedish National power entrepreneur in a difficult situation: will their Renewable Action Plan (NREAP) states “the major investors be willing to wait for three or eight years? grid owners in Sweden are collaborating on a joint Will they still be around at that time? So the processes database in which all known connection projects for are not really compatible” (Second Opinion 2011). renewable energy will be complied” (Government Office of Sweden 2010: 55). 43 Interview, Svenska Kraftnät, Planning Unit, 22 April 2014. 44 Interview, Swedish Energy Agency, Wind Power Unit, 20 May 2014.

29 developing sweden’s transmission grid: what are the drivers and barriers?

One suggestion to get around this problem is for wind investment in the national grid and the government’s power entrepreneurs to agree to underwrite all the costs governance of Svenska Kraftnät’s investment of the technical pre-study if the project is not granted planning, the NAO concluded that the government’s permission(Second Opinion 2011). management of Svenska Kraftnät had been too passive, that the transmission capacity for electricity in Sweden Barriers to wind power: Development costs was still not sufficient and that the licensing process for Energy producers must bear the costs of connecting to developing the grid takes too long, which has delayed the grid. If a new line has to be developed to connect the important investment (Swedish National Audit Office new power source, the producer must carry the full cost 2013a; Swedish National Audit Office 2013b: 3). of this, regardless of whether it plans to use the entire capacity. Producers that connect to the same line later Both the government and Svenska Kraftnät had known on can do so without having to pay anything extra, apart since the early 2000s that the pace of investment needed from basic fees. This means that no producer wants to increase, but it was not until 2007 that investment to be the first to connect to a grid. This hampers the decisions started to be made. One explanation why establishment of RES, and means that new wind power investment had been so slow is that Svenska Kraftnät is not always established where the wind conditions are in the late 1990s and the beginning of the 2000s best, but where there is enough capacity in the grid. To interpreted its role as “to manage the existing national mitigate the so-called threshold effect (Tröskeleffekt), grid to avoid driving up costs and thus increasing a proposal on sharing investment costs for connecting network tariffs” (Swedish National Audit Office 2013a; RES to the national or regional grid has been developed Swedish National Audit Office 2013b: 3). The Swedish by Svenska Kraftnät, at the request of the government NAO also found that public control of investment (Svenska Kraftnät 2009). In essence, the proposal is decisions had been lacking, but that this has improved. that Svenska Kraftnät will stand the initial cost of However, this improvement had been initiated by developing the new line, and that producers will pay Svenska Kraftnät and not by the government. for their share of the new capacity one they connect (Svenska Kraftnät 2009). The government proposed TYNDP, cost-benefit analysis and Projects of legislation to this effect in March 2014, suggesting that Common Interest the new regulations should come into effect on 1 August The EU mandates the European Network of 2014. The proposition was approved in May 2014.45 Transmission System Operators for Electricity to develop a biennial, non-binding Ten-year Network Weak national governance Development Plan (TYNDP). The TYNPD is intended Damsgaard et al. (2008: 43) distinguish between three to support transmission grid-related decision makers general ways of regulating a monopoly: at the regional and European levels by providing information and transparency on investment needs in • Through ownership: the Swedish TSO is an pan-European electricity transmission systems.46 authority and a public utility, and is thus well integrated into the state. In Denmark and Norway, In order to allow for a homogenous and transparent the TSO is up to 100 per cent owned by the state. assessment of all TYNDP projects, the ENTSO-E The Finnish TSO, by contrast, is owned by the has developed a cost-benefit assessment (CBA) tool public, producers and consumers – as well as by (ENTSO-E 2013a). The CBA is also intended to be financial investors. used as an input to the selection process for Projects of Common Interest (PCIs). These are identified and • Through laws and regulations: examples here selected by the EU Regional Groups but before the include the annual appropriations letter by which list of PCI gains formal status, it must be approved by the Swedish government regulates the Swedish the European Commission. The CBA methodology is TSO; the Energy Market Inspectorate, which is the also to be used as an input when allocating costs in regulator of the TSO; and the Energy Act. international grid development projects.

• By regulating income and costs. The CBA methodology identifies nine indicators, of which two are cost elements and seven are benefits All these ways are used to regulate Svenska Kraftnät. (see Table 4) (ENTSO-E 2013b). One of these relates However, in its audit of the permit process for directly to the integration of RES.

45 Government Proposition 2013/14:156: “Tröskeleffekter 46 https://www.entsoe.eu/publications/system-develop- och förnybar energi”. ment-reports/tyndp/Pages/default.aspx

30 stockholm environment institute

Table 4: Indicators included in the CBA methodology suggested by ENTSO-E.

CBA Indicators

Costs Total project expenditures Pre-tax Project impact on society This includes two sub-indicators: Environmental impact and Social impact. Benefits Security of supply The ability of a power system to provide an adequate and secure supply of electricity under ordinary conditions. Socio-economic welfare (SEW) The ability of the system to reduce congestion and provide adequate grid transfer capacity so that the electricity market can trade power in an eco- nomically efficient manner. RES integration The ability of the system to allow the connection of new RES plants and unlock existing and future “green” generation, while minimising curtail- ment. Variation in losses (energy efficiency) The evolution of thermal losses in the power system. An indicator of energy efficiency correlated with SEW. Technical resilience/system safety margin The ability of the system to withstand increasingly extreme weather condi- tions. Robustness/flexibility The ability of the proposed reinforcement to be adequate in different possible future development paths and scenarios, including trading of balancing services.

Figure 9: Illustration of overall assessment Source: ENTSO-E (2013b).

Since not all of the indicators can be monetised, the faces barriers, however, some of which are related CBA has been developed as a multi-criteria approach to transmission grid development. At the same time, (see Figure 9). Each indicator has to be quantified. wind power establishment is a source of uncertainty There is no methodology for weighting, but some for transmission grid development, since it is hard general guidelines are provided. for Svenska Kraftnät to know where, when and of what capacity new wind power will be. Looking at Summing up normative and cognitive rules Svenska Kraftnät’s planning practice, one relevant The normative rules of Svenska Kraftnät clearly discrepancy identified concerns assumptions about work in favour of transmission grid development wind power establishment. While Svenska Kraftnät for RES integration. Looking at the cognitive bases its investment planning on an assumption rules, wind power is recognized as a clear driver of of 17 TWh of wind power by 2025, Swedish transmission grid development, supported by the wind estimates that there will already be 18 TWh formally institutionalized connection obligation and of wind power in 2017. While the connection the normative rules of Svenska Kraftnät. Wind power obligation mandates that all new production must be establishment is in turn influenced by other drivers, connected, a lack of available capacity in the grid such as the RES Directive and the electricity market can delay wind power projects or lock new power certificate system. Wind power establishment also into a bidding area where there is already a surplus

31 developing sweden’s transmission grid: what are the drivers and barriers?

of power production, causing new investment to be electricity system in general, as well as transmission less profitable. grid development more specifically, are mature and politically acknowledged to be important systems, Svenska Kraftnät has recently started making longer- which give them good access to political and financial term plans. It is not long since it switched its role from resources. Yet, as is discussed in section 4.5, looking the manager of the grid to the developer of the grid. Its at how European integration is progressing, in spite of pace of investment has increased ten-fold in the past 10 the establishment of coordinating organisations such as years, which has resulted in a much larger organization. ENTSO-E, it is clear that actors are not the key issue. This could mean that the planning practices of Svenska Kraftnät are still under development, and that there will be opportunities to make organizational changes. 6.4 Technology It could also mean that Svenska Kraftnät is too preoccupied with making the new organization work Grid technology for any changes in planning practices to be feasible. Development of technology for the grid is often carried out within the frames of an actual project. It would be The concession application process is complex and too expensive for the engineering company to take characterized by uncertainty and ambiguity regarding on the full cost of technology development without what is required. This increases the risk of conflicts knowing whether there was any project in which to use and appeals, which delays development projects. As – and get paid for – the result. such, the concession process can be said to contain a number of barriers. Conflicts are common between Take for example the wind power farms far into the local environmental and health concerns, and national Baltic or the North Sea where you need to connect with or global sustainability issues. Other conflicts revolve HVDC.48 When the first one was installed, the technology around land-use issues. To avoid such conflicts, more did not exist in any real sense, but it was developed in active involvement by the government on transmission conjunction with the projects. Partly projects have also grid development could be helpful. arisen because it was technologically possible, or at least that they started to see that it would be possible. But a developer of technology cannot take on all the 6.3 Actors and networks development costs if there is no project anywhere to use it. So, technology providers and the TSO usually Albrecht (2012) has explored the institutional join forces in some form of demonstration project.49 conditions for high voltage grid concession regimes, as well as offshore wind farm-related institutional grid Inertia and frequency stability issues, in four Nordic countries and at the EU level.47 For a substantial integration of RES to function from This provides a good overview of the institutions, a power system point of view, there is a need for actors and networks, and technologies related to technological innovation outside the transmission grid transmission grid development. Table 5 lists the actors per se. This is especially the case if nuclear power is of greatest relevance to transmission grid development to be decommissioned, since this would result in a in Sweden, according to which level of governance large loss of inertia (svängmassa).50 Even with nuclear they act on. The list is not intended to be exhaustive, power kept in the system, inertia – or other ways of but to highlight the key actors involved in transmission regulating the frequency in the system – will be grid development. needed. Wind power plants can also contribute inertia, but in contrast to other power production, there is no All these actors are part of the regime, but operate demand on producers of renewable energy to do so.51 at different levels and with different resources (e.g. Developing and implementing technology is thus economic, institutional and social capital) to pursue not enough. Svenska Kraftnät also needs to develop their interests. Several actors have been established to promote grid development that is carried out in a way 48 High Voltage Direct Current that is beneficial from a European perspective, or to 49 Interview, Svenska Kraftnät, Planning Unit, 22 April promote cooperation and integration. During interviews 2014. and document reviews, there has been no mention of missing actors or problems related to the organisation 50 Interview, Svenska Kraftnät, Planning Unit, 22 April of actors per se. One reason for this might be that the 2014. 51 Interview, Swedish Energy Agency, Wind Power Unit, 47 Denmark, Finland, Norway and Sweden. 20 May 2014.

32 stockholm environment institute

Table 5: Actors of direct relevance to transmission grid development

Level Actor Role in relation to grid development

Local Property owners Property owners that might need to be reimbursed for intrusions. Involved in level consultation processes. Municipalities The municipalities have a planning monopoly, meaning that they are the actors that must change the development plan for an area where it does not support new or changed locations for transmission grid infrastructure. Regional The County Administrative A regional authority representing the government with responsibility for level Board (Länsstyrelsen) pursuing national targets at the county level, coordinating different societal interests and monitoring e.g. infrastructure development, environmental protection and the cultural environment. Handles some appeals related to municipal decisions. Involved in EIA and referral processes. Land and Environment Court First instance for appeals related to land and environmental issues. Or sec- ond instance, where an appeal has been made to the County Administra- tive Board. Forestry associations (e.g. Trade body for forestry, looks after the interests of its members. Involved in Södra Skogsägarna, Norra referral processes. Skogsägarna, Mellanskog) National Svenska Kraftnät Transmission System Operator. Responsible for expansion planning, main- level tenance and operational supervision of the national grid. Responsible for maintaining the balance between the production and consumption of elec- tricity in Sweden. Energy Market Inspectorate Regulating agency of Svenska Kraftnät. Administers and grants concessions to national grid projects, and administers international projects for the gov- ernment to decide on. Ensures that fees are legitimate. Ministry of Enterprise, Energy Also involved in preparing concession applications for the government to and Communication decide on. Prepares propositions. The Swedish Government Grants concession for all international interconnectors. Recommends changes in legislation and policy documents. Lantmäteriet, the Swedish Ensures an effective and legally secure division of real property, as well as mapping, cadastral and keeping track of the composition of the properties. land registration authority. Land and Environmental Second instance for appeals related to land and environmental issues Superior Court The Federation of Swedish Trade body for farmers. Involved in referral processes. Farmers (LRF) The Swedish Army Land use-related security concerns. Involved in referral processes. Nordic NordReg As the organization of Nordic energy regulators, NordReg promotes legal level and institutional frameworks and the conditions necessary for developing the Nordic and European electricity markets, including mapping and ana- lysing energy market issues. Nordic Council of Ministers Prepares joint strategies, statements and declarations on Nordic coopera- for Business, Energy and tion on e.g. a joint Nordic energy market and other energy policy issues. Regional Policy This cooperation is led by the Nordic ministers for business, energy and regional policy. Nordel Cooperation between Nordic countries, discontinued after the Nordic TSOs joined ETSO (1999), which was then transformed into ENTSO-E (2009) EU level European Commission: DG Responsible for developing and implementing a European energy policy, Energy including issues related to the energy market, sustainable energy produc- tion and use, and a secure energy supply. ENTSO-E The European Network of Transmission System Operators for Electricity develops non-binding 10-year development plans (TYNDP), network codes and regional plans. Develops decision-making tools such as the CBA methodology. Was preceded by ETSO.

33 developing sweden’s transmission grid: what are the drivers and barriers?

ACER The Agency for Cooperation of Energy Regulators aims to ensure compatible regula- tory regimes among member states. CEER The Council of European Energy Regulators is an independent network that acts as a preparatory body, working closely with ACER and ENTSO-E. NSCOGI The North Sea Countries Offshore Grid Initiative is a governmental coop- eration for developing offshore wind and power grid infrastructure in the North Sea. It was established by the European Forum for Renewable Energy Sources (EUFORES). FOSG Friends of the Supergrid is an NGO founded by a group of companies that have a common interest in promoting and influencing the policy and regulatory framework required to enable a European Supergrid.

Based on Albrecht (2012). its operations and market systems, in order for the has not influenced actual investment plans. To get a inertia from wind power plants to be made useful. thorough understanding of the extent to which smart Such a development could help wind power be seen grid technology is taken into consideration, it would be as a solution, and not only as a problem for voltage relevant to explore how Svenska Kraftnät argues the stability in the grid (nätspänningsstabiliteten). 52 The choice of technology in specific development projects. need for inertia and frequency stability could however be seen as a driver of transmission grid development as Summing up technology a larger system, with less congestion, is better able to Technology is not a driver in itself, but an enabler. The deal with these issues. lack of certain technology, or certain technological challenges, such as frequency stability and inertia, Smart grids could however be a driver of transmission grid Besides managing the inertia and frequency in the development. Smart grid technology could be used to grid, another challenge is balancing power production reduce the need for transmission grid development, and consumption. Here, smart grid technologies and without any negative impact on the possibilities for institutional innovations in demand response-based connecting RES. load shifting are said to have great potential. A recent report on the integration of renewables in the EU found that demand response is estimated to have reduced 6.5 Landscape signals system costs in the EU by up to €100 billion per year (KEMA Consulting 2014). Based on the documents reviewed and the interviews, the key landscape signals influencing transmission grid The Swedish Energy Market Inspectorate sees the development are: development of a “Smart Grid” as a possibility to increase the “hosting capacity” of the grid without • Mitigating climate change having to invest in measures to strengthen the grid • An integrated European market (EI 2011: 3). Svenska Kraftnät also mentions the • Reliability and energy security possibility of using smart grid technologies in its long- • A good living environment (local environmental term development plan, and states that this is the most and health concerns) effective and economic way of developing the grid • A strong industry, and good conditions for in a way that supports sustainable energy provision agriculture and forestry (Svenska Kraftnät 2013a). A few smart grid-related • Electricity demand, including demography technologies are already in use. Svenska Kraftnät also • Municipal independence and planning monopoly sees that smart grid technology, while being developed for more efficient grid management, could also present Of these, the urge to mitigate climate change is a new or increased challenges, because of the way these clear and strong driver of integrating an increased technologies enable a substantial connection of small- amount of RES into the power system. This is also scale (less than 10 MW), distributed energy production. recognised by several key actors at the national and As far as can be seen, however, smart grid technology international levels. At the national level, Svenska Kraftnät, the Swedish Government and the Swedish 52 Interview, Swedish Energy Agency, Wind Power Unit, Energy Market Inspectorate clearly recognise and act 20 May 2014. on this driver, and also see that it calls for transmission

34 stockholm environment institute

grid development. At the regional and local levels, Changing focus from the transmission grid to the however, there are other priorities that sometimes power system, the vision of a more distributed grid, result in conflict. Public opinion is in general in favour with a higher share of local and small-scale production of renewable energy (wind) (SOM Institutet 2011:25; of electricity, consumed locally, becomes interesting AGS 2007), but at the local level specific projects – from the perspective of niche-regime interactions. for both new wind power plants and new transmission This is different from the RES integration explored grids – give rise to local resistance.53 54 in the NORSTRAT project, as it would change the power system (and the transmission system) in a more Reliability and energy security, and an integrated fundamental way – causing a clear deviation from European market are also acknowledged as drivers highly centralised grid development and management. of grid development. Here, however, RES are not seen as a solution but as a challenge that must be met. It is however not evident how such a transition would National concerns about reliability and energy security influence grid development practices, or the regime. are to some extent also perceived as conflicting with It should be safe to assume that power grids will the vision of an integrated European energy market: continue to be seen as natural monopolies, and that “The TSOs through ENTSO-E have been preparing the hierarchal division into three levels of grid will be proposals for new network codes for connection, retained. On the one hand, such a development could balancing, operations and market, all intended to end up in a situation quite similar to when transmission harmonise Europe. At the same time, however, energy grid development began in the 1940s, when there were policy is moving in the other direction, with everyone about 4000 power distributors and about 4000 small focusing on managing national production. So there is power plants across Sweden.56 One the other hand, such a clear discrepancy there”.55 a development could result in a less efficient system, with efficiency being defined on the basis of how much Summing up landscape signals of the installed capacity is being used how often. This Landscape signals include both drivers of and is based on the assumption that local power production barriers to transmission grid development. On the will not be able to balance itself at all times, and that one hand, signals such as mitigating climate change there will therefore be a need to transmit power to and and integrating the European power market are clear from these local areas. It can also be assumed that this drivers. On the other hand, national concerns regarding balancing transmission will not always be needed, security of supply, as well as regional and local meaning that there will be transmission peaks, to as concerns regarding environmental, health and land-use well as from the local area, and, as a consequence, an issues, act as barriers. inefficiently used transmission system. Another way to resolve this is through demand response, where the balancing is done through the user side of the power 6.6 Niche drivers system. For this to function, however, a plethora of technical and institutional ‘smart grid’ innovations Because of the way in which the relationship between would need to be put in place. niche and regime is conceptualised in MLP, a niche cannot be anything other than a driver of transition. The actors engaged in smart grid initiatives are to The transmission grid development depicted in the a large extent regime actors. This means that the NORSTRAT scenarios, however, neither constitutes transmission grid regime – or power system regime – nor calls for any transition of the regime, but is is fairly quick at picking up and assimilating novelties very much a matter of business as usual. Looking at that might otherwise have developed into challenging transmission grid development historically, integrating niches or rival systems. Indeed, it still interprets the new energy sources is a driver that the regime knows smart, distributed grid on the basis of its own normative well, and that is also institutionalised both formally and cognitive rules. The smart grid discourse is about and informally. market integration, power balance and RES integration (Svenska Kraftnät 2013; EI 2011; EI R2007), and says little or nothing about autonomy, de-growth or 53 Interview, Svenska Kraftnät, Planning Unit, 22 April community-building. 2014. 54 Interview, Swedish Energy Agency, Wind Power Unit, 20 May 2014. 55 Interview, Svenska Kraftnät, Market Unit, 22 April 2014. 56 http://www.svenskenergi.se/Svensk-Energi/Historik-/

35 developing sweden’s transmission grid: what are the drivers and barriers?

7 CONCLUDING DISCUSSION

his study aimed to explore the drivers of and barriers • Formal institutions Tto transmission grid development in Sweden to • Normative and cognitive rules support an enhanced integration of renewable energy • Actors sources to the extent needed to meet the long-term • Technology target of fossil-fuel-free power production in the • Landscape signals Nordic countries by 2050. • Niche drivers

It explored transmission grid development historically, compared existing plans for transmission grid 7.1 Research questions revisited development with the needs identified in previous NORSTRAT studies, and identified contemporary • What is driving current transmission grid drivers of and barriers to transmission grid development projects in Sweden, and are these development. The methods used were semi-structured in line with the development needed to meet the interviews with relevant stakeholders, analysis of NORSTRAT target? policy and planning documents on transmission grid development, and an analysis of conflict themes in An examination of current, ongoing and planned the transmission grid project SydVästlänken (Eng. transmission grid development projects revealed that SouthWest Link). the key drivers of these are to strengthen transmission capacity from the north to the south of Sweden and To provide an entry point for the exploration the study to connect Sweden with neighbouring countries, used a theoretical framework based on MLP and new including Lithuania and Germany. This means that institutionalism. This resulted in a list of archetypes of the location of the ongoing and planned development drivers and barriers, which provided a structure for the projects coincides well with the needs modelled by the exploration and analysis. NORSTRAT project.

Figure 10: The planned increase in transmission capacity (marked by the red oval) falls between “Current capacity” and “Increased capacity”, as defined in the NORSTRAT modelling.

36 stockholm environment institute

Quantitative data about each project’s contribution to power is more of a planning challenge than integrating capacity would have been needed to make a thorough more traditional types of power, such as hydro power analysis of the planned projects against the modelled and nuclear power. This challenge is made even more need for increased capacity. This information, however, complex by the more diverse field of actors involved in is not always available in the openly accessible wind power compared to large-scale hydropower and sources used in this study. Based on those projects for nuclear power, as well as the relatively much larger which more specific figures can be obtained, capacity uncertainties for wind power project proposals. In falls between what would be needed if the current other words, RES integration could mean fundamental transmission capacity from the Nordic countries to changes to the institutional landscape. In addition, Europe were retained, and what would be needed if this market integration has become more complex, with capacity were to be increased (Figure 17). One potential the scope of the integration moving from the Nordic reason for this could be that the NORSTRAT scenarios to the EU level. This means that even though there is assume that the congestion in the German transmission experience among the key actors of addressing these grid will be resolved, something that Svenska Kraftnät drivers, some level of organisational learning is still does not base its modelled need on. This congestion needed. currently constitutes a disincentive to increasing the transmission capacity from Sweden to Germany. • What are the drivers of and barriers to current transmission grid development Looking at the pace of transmission grid development projects in Sweden? in relation to the NORSTRAT target, and assuming that a transmission grid project continues to take about10 The study showed that key drivers of transmission years to complete, at least three iterations of projects grid development for RES integration can be found would be possible between now and 2050, allowing in the landscape signals, formal institutions and the room for time to identify, prioritise and propose the normative and cognitive rules of Svenska Kraftnät. projects required. This means that even if the projects Key barriers were identified in landscape signals and planned today are of lower capacity than the modelled the cognitive rules related to investment planning of needs, there will be time for additional projects to be transmission grid development and the concession completed to deal with this. These projects, however, process. The key drivers and barriers, summarised in will not be planned until the scenarios and models Table 6 and Table 7, respectively, were derived from used by Svenska Kraftnät show that there is a need the results presented in section 6. Appendix A presents for them. One potential problem related to speed of the drivers and barriers side by side. development is that the time needed to develop new transmission capacity might create market problems Across the formal institutions investigated, Directive for wind power, at least in the north of Sweden. Such a 2009/28/EC and the electricity certificate system are situation could lead to more wind power being located clear drivers of transmission grid development, since in the south of the country. they contribute to the establishment of new power production from renewable energy sources, which, due • What have been the drivers of and barriers to the connection obligation, forces Svenska Kraftnät to transmission grid development in Sweden to develop the national grid. The connection obligation historically, and what can we learn from this when is not a driver in itself, but is rather a formalized exploring transmission grid development today absence of barriers to new power production being and in the future? connected. The bidding areas can be seen as a driver of transmission grid development since, by translating Based on the historical outlook it can be concluded the spatial mismatch and congestions into electricity that transmission grid development historically was prices, they demonstrate that there is a need for further driven by the need to overcome spatial mismatches grid investment to get rid of the price differences. between production and consumption, the need to However, it should be noted that the price differences balance geographical gaps and temporal variations between the bidding areas are on average quite small. in production and consumption, the need to integrate new production and market integration. It is however That Svenska Kraftnät has started to make more long- important to note that some of these drivers were term plans for grid development is positive for RES around, and recognised, for a longer period than others. integration, as it recognises the need to develop the grid It is also important to note that even if the drivers are the so that new wind power can be connected. However, same, they have become more complex. Integrating a Svenska Kraftnät’s planning practices revealed an geographically distributed power source such as wind important discrepancy in assumptions about wind

37 developing sweden’s transmission grid: what are the drivers and barriers?

Table 6: Drivers of transmission grid development in Sweden Drivers (D) Influence Landscape (L) DL1. Mitigating climate Supports more RES, which demands transmission grid development. change DL2. An integrated Euro- Increased transmission capacity is needed to overcome bottlenecks that are disturbing the market. pean market Formal institutions (F) DF1. EU Internal Single Promotes international interconnectors and national transmission grids to avoid congestion. Market DF2. Directive 2009/28/ Supports more RES, which demands transmission grid development. See F2. EC (RES Directive) DF3. Electricity market Supports more RES, which demands transmission grid development. certificate system DF4. Bidding areas Clarifies bottlenecks through price signals, which could act as a driver of transmission grid devel- opment Normative (N) and cognitive (C) rules DN1. Svenska Kraftnät Svenska Kraftnät recognises that it has an opportunity, and therefore a responsibility, to decarbon- normative rules ise Europe, which calls for transmission grid development even when it might not be profitable for Sweden. DC1. Svenska Kraftnät Svenska Kraftnät has started making more long-term plans, which include scenarios involving planning practice increased wind power establishment when making plans for transmission grid development Technology (T) DT1. Inertia and fre- More power from RES presents problems for inertia and frequency stability in the power system, quency stability something that could be at least partially abated through transmission grid development

Table 7: Barriers to transmission grid development in Sweden

Barriers (B) Influence

Landscape (L) BL1. National security of supply Supports national interest over international decarbonisation interests BL2. National industry, incl. agri- Supports national interest over international decarbonisation and market integration culture and forestry BL3. Local environmental and Sustainable development at the local scale conflicts with the global scale (L1) health concerns BL4. Participation, and local and Implies a distributed agency and ambiguous power, resulting in conflicts and complex regional agency concession processes Formal institutions (F) BF1. Concession procedure The formal concession procedure is complex, leading to lengthy processes Normative (N) and cognitive (C) rules BC1. Svenska Kraftnät planning These assumptions about wind power establishment are lower than those of Swedish practice: assumptions regarding Wind, which could lead to unfavourable conditions for wind power establishment. wind power Plans are based on the Swedish political RES targets only, leading to an under-dimen- BC2. Svenska Kraftnät planning sioned transmission grid capacity compared to what would be needed to decarbonize practice: RES targets used the European power system. See N1. In practice the concession process involves a number of ambiguities, e.g. regarding lev- BC3. Concession process in els of electromagnetic radiation and which stakeholders to involve. This causes uncer- practice: ambiguity tainty in the process, an increased risk of conflicts and lengthens the process. In practice the concession process involves a number of uncertain priorities, e.g. regard- BC4. Concession process in ing land use and trade-offs between local and global sustainability concerns, on which practice: conflicting priorities there is no agreed procedure for how to handle. This causes uncertainty in the process, an increased risk of conflicts and lengthens the process. The government’s governance of Svenska Kraftnät is passive, meaning a lack of evalua- tion and follow-up that could otherwise could have resulted in further progress on invest- BC5. Passive governance ments. The government also has an important role to play in resolving ambiguities and uncertainties regarding priorities (C3 and C4).

38 stockholm environment institute

power establishment. While Svenska Kraftnät bases its The concession application process turned out in practice investment planning on an assumption of 17 TWh of to be a complex one characterized by uncertainty and wind power by 2025, Swedish wind estimates that there ambiguity regarding what was required. This increases will already be 18 TWh of wind power in 2017. While the risks of conflict and appeals, which delays the connection obligation mandates all new production development projects. The concession process can thus to be connected, a lack of available capacity in the grid be concluded to contain a number of barriers. Conflicts could mean that wind power projects are delayed or between local environmental and health concerns and that the new power becomes locked into a bidding area national or global sustainability issues are common. where there is already a surplus of power production, Other conflicts revolve around land-use issues. causing new investments to become less profitable. Landscape signals were found to include both drivers of It is also positive that Svenska Kraftnät sees that it and barriers to transmission grid development to enable has a role in helping to meet the national energy and RES integration. On the one hand, landscape signals climate targets, and in decarbonizing the European such as mitigating climate change and integrating power system. However, in relation to the NORSTRAT the European power market are clear drivers. Here, target, the national RES targets are less ambitious. Here transmission grid development for RES integration and an unaddressed conflict emerges between planning to market integration go hand in hand. On the other hand, achieve national energy and climate targets, on the one national concerns regarding security of supply, as well hand, and aiming to contribute to decarbonizing the as regional and local concerns regarding environmental, European power system, on the other. health and land-use issues, constitute barriers.

39 developing sweden’s transmission grid: what are the drivers and barriers?

REFERENCES

AGS (2007) Public and stakeholder attitudes towards ENTSO-E (2013a) ENTSO-E Guideline for Cost energy, environment and CCS. AGS Pathways Benefit Analysis of Grid Development: Key issues report 2007:E3. and questions. 2013-06-12

Albrecth, M. (2012) Nordic power road map 2050: ENTSO-E (2013b) ENTSO-E Guideline for Cost Strategic choices towards carbon neutrality. Benefit Analysis of Grid Development Projects. Deliverable D4.1.R. Institutional grid review. 2013-11-14.

Bacchi, C., Evaline, J. (2010) ”Approaches to gender EURELECTRIC (2011) Flexible generation: backing mainstreaming: What’s the problem represented up renewables. D/2011/12.105/47 to be?” In: Bacchi, C., Evaline, J. (Eds.) (2010) Mainstreaming politics: Gendering practices and EURELECTRIC (2013) Power Statistics and Trends feminist theory. University of Adelaide Press. 2013.

Brekke, O.A., Sataøen, H.L. (2012) Ekspertise, European Commission (2011) A roadmap for moving politikk eller dialog? Nettutvikling i Norge, Sverige to a competitive low carbon economy in 2050. og Storbritannia. Uni Rokkansenteret, Rapport Technical report. 8-2012. Geels, F. W. (2011) The multi-level perspective on Börjeson, L., Höjer, M., Dreborg, K-H., Ekvall, sustainability transitions: Responses to seven T., Finnveden, G. (2006) Scenario Types and criticisms. Environmental Innovation and Societal Techniques: Towards a User’s Guide. Futures, 38: Transitions 1(1): 24–40. 723–739 Geels, F. W., Schot, J. (2007) Typology of Churchman, C. W. (1968) The Systems Approach. New sociotechnical transition pathways. Research York: Dell Publishing Co. Policy, 36(3): 399–417.

Damsgaard, N., Munthe, K., Sonnerby, P. (2008) Government Office of Sweden (2010) Sveriges Investeringar i stamnät och utlandsförbindelser. Nationella Handlingsplan för främjande av Elforsk rapport 08:43. Retrieved from: http:// förnybar energy enligt Direktvi 2009/28/EG och www.elforsk.se/Rapporter/?download=report&r Kommissionens beslut av den 30.6.2009. id=08_43_ Government Office of Sweden (2012) Sveriges första Dryzek, J. (1997) The Politics of the Earth: rapport om utvecklingen av förnybar energi enligt Environmental Discourses. New York: Oxford artikel 22 i Direktiv 2009/28/EG. Report. Ministry University Press. of Enterprise, Energy and Communications. Retrieved from: http://www.regeringen.se/sb/ ECF (2010) Roadmap 2050: A practical guide to d/15701/a/200159 a prosperous, low-carbon Europe. Technical Analysis. Retrieved from: www.roadmap2050.eu Government Office of Sweden (2013) Sveriges andra rapport om utvecklingen av förnybar energy enligt Energimarknadsinspektionen (EI) (2011) Adapting artikel 22 i Direktiv 2009/28/EG. Report. Ministry Electricity Networks to a Sustainable Energy of Enterprise, Energy and Communications. System: Smart Metering and Smart Grids. EI Retrieved from: http://www.regeringen.se/sb/ R2011:3. d/17076/a/231263

Energimarknadsinspektionen, Svenska Kraftnät, Graabak, I., Warland, L., Nilsson, M., Wu, Q. (2014) Svensk Energi och Svenskt Näringsliv (2007) Scenarios for a Carbon Neutral Nordic Power Prisområden på elmarknaden (POMPE)” Joint System. Energies 2014 (6). In press. report. EMIR 2007:2. Retrieved from: http: www.svk.se/Global/01_Om_oss/Pdf/Rapporter/ EMIR2007_02w.pdf

40 stockholm environment institute

Graabak, I., Warland, L. (2014) A carbon neutral Quitzau, M-B., Jensen, J., Elle, M., Hoffmann, B. power system in the Nordic region in 2050, D3.1 in (2013) Sustainable urban regime adjustments. the NORSTRAT project. Journal of Cleaner Production 50: 140–147.

Högselius, P., Kaijser, A. (2007) När folkhemselen Swedish National Audit Office (2013a) Staten på blev internationell: Elavreglerigen i ett historiskt elmarknaden perspektiv. SNS Förlag: Stockholm. – insatser för en fungerande elöverföring. Swedish National Audit Office, p. 3. Kaijser, A., Mogren, A., Steen, P. (1991) Changing direction: Energy Policy and New Technology. Swedish National Audit Office (2013b) Summary of General Energy System Studies. Swedish National The State in the Electricity Market – Interventions Energy Administration 1991:R5. for a Functional Electricity Transmission System, p. 3. Kay, A. (2005) A critique of the use of path dependency in policy studies. Pub Adm, 83(3): Seyfang, G., Haxeltine, A. (2011) Growing grassroots 553–571. innovations: exploring the role of community- based initiatives in governing sustainable energy Kemp, R., Schot, J., Hoogma, R. (1998) Regime transitions. Environment and Planning C: shifts to sustainability through processes of Government and Policy 2012, volume 30, pages niche formation: the approach of strategic niche 381–400. management. Tech Anal and Strat Man, 10: 175– 196. Schoemaker, P. J. H. (1993) Multiple scenario development: Its conceptual and behavioural KEMA Consulting (2014) Integration of Renewable foundation. Strategic Management Journal, 14(3): Energy in Europe. Final report. Retrieved from: 193–213. http://ec.europa.eu/energy/renewables/doc/201406_ report_renewables_integration_europe.pdf Schot, J., Geels, F.W. (2008) Strategic niche management and sustainable innovation journeys: KEMI (2011) Kreosot. www.kemi.se/sv/Innehall/ Theory, findings, research agenda, and policy. Fragor-i-fokus/Kreosot/ Technology Analysis and Strategic Management, 20 (5): 537–554. Kingon, J. W. (1994) Agendas, Alternatives and Public Policies. 2nd edition. New York: Longman. SOM Institutet (2011) Inställningen till olika energikällor i Sveriges län. SOM-rapport nr Klima- og energiministeriet (2010) National Action 2011:25. Plan: For Renewable . Stymne, P. (2002) Stamnätet under ett sekel: Kvale, S. (1997) Den kvalitativa forskningsintervjun. Berättelsen om hur det svenska stamnätet byggdes Studentlitteratur. upp. En bok till Svenska Kraftnäts tioårsjubileum 2002. Smedjebacken: Svenska Kraftnät. Nilsson, M., Nilsson, L. J., Hildingsson, R., Stripple, J., Eikeland, P. O. (2011) The missing link: Supponen, M. (2011) Influence of National and Bringing institutions and politics into energy future Company Interests on European Electricity studies. Futures, 43(10): 1117–1128. Transmission Investments. PhD Diss. Aalto University publication series DOCTORAL Palm, J. (2004) Makten över energin. Doctoral thesis. DISSERTATIONS 77/2011. Linköping university. Svenska Kraftnät (undated) Appendix till Driftsrådet. Pierson, P. (2000) Increasing returns, path dependency Investeringar 07–09. Retrieved from: http://www. and the study of politics. Am Pol Ci Rev, 94(2): svk.se/Global/01_Om_oss/Pdf/Driftradet/Bilaga7_ 251–267. Investeringar07-09_driftraadet2.pdf

Svenska Kraftnät (2007) Final commitment DG Competition. p. 4. Retrieved from: http://www.svk.

41 developing sweden’s transmission grid: what are the drivers and barriers?

se/PageFiles/42946/100421_Commitment_DG_ News articles COMP_final[1].pdf Barometern Oskarshamns-Tidningen 2014-09-03

Svenska Kraftnät (2009) Tröskeleffekter och förnybar Dagens Nyheter 2013-08-05 “Förbjudet ämne används energi: Författningsförslag. Dnr 2009/1306. i nya kraftstolpar” http://www.dn.se/nyheter/ sverige/forbjudet-amne-anvands-i-nya-kraftstolpar/ Svenska Kraftnät (2012a) Vägledning för anslutning till stamnätet. (Eng. “Guidance for connecting to Jönköpingsposten 2013-07-12 “Giftstolpar monteras the national grid”) trots förbud” http://www.jonkopingsposten.se/ artikel/15235/giftstolpar-monteras-trots-forbud Svenska Kraftnät (2012b) Appendix till Perspektivplan 2025. Nya Dagbladet 2013-08-05 “Svenska Kraftnät ignorerar kreosotförbud” http://nyadagbladet.se/ Svenska Kraftnät (2013a) Perspektivplan 2025. halsa/svenska-kraftnat-ignorerar-kreosotforbud/

Svenska Kraftnät (2013b) Investerings- och Second Opinion 2011-11-21 “Brist på elnät begränsar finansieringsplan för åren 2014–2016. vindkraften” http://www.second-opinion.se/energi/ view/2237 Swedish Wind Energy (2014) Statistik vindkraft kvartal 1, 2014. Retrieved from: http:// Smålandsposten 2014-09-03 “Kraftiga protester mot www.vindkraftsbranschen.se/wp-content/ kraftledning” http://www.smp.se/nyheter/ekonomi/ uploads/2014/04/Statistik-vindkraft- kraftiga-protester-mot-kraftledning(4431732).gm kvartal-1-2014-20140414.pdf Vetlandaposten 2013-10-18 “Tar domstol till hjälp” Van der Vleuten & Lagendijk (2010) Interpreting http://www.vetlandaposten.se/artikel/66989/tar- transnational infrastructure vulnerability: domstol-till-hjalp European blackout and the historical dynamics of transnational electricity governance. Energy Policy Vetlandaposten 2013-11-18 “Nej till byggstopp av 38(4): 2042–2052. Sydvästlänken” http://www.vetlandaposten.se/ artikel/67558/nej-till-byggstopp-av-sydvastlanken

42 stockholm environment institute

APPENDIX A: DRIVERS OF AND BARRIERS TO TRANSMISSION GRID DEVELOPMENT

Drivers (D) Influence Barriers (B) Influence

Landscape (L) DL1. Mitigating cli- Supports more RES, which BL1. National security Supports national interests over inter- mate change demands transmission grid devel- of supply national decarbonisation interests. opment. DL2. An integrated Increased transmission capacity is BL2. National industry, Supports national interests over inter- European market needed to overcome bottlenecks incl. agriculture and national decarbonisation and market that are disturbing the market. forestry integration. BL3. Local environmen- Sustainable development at the local tal and health concerns scale conflicts with the global scale (L1). BL4. Participation and Implies a distributed and ambigu- local and regional ous agency and power, resulting in agency conflicts and complex concession pro- cesses. Formal institutions (F) DF1. EU Internal Sin- Promotes international intercon- BF1. Concession pro- The formal concession procedure is gle Market nectors and national transmission cedure complex, leading to lengthy processes. grids to avoid congestion. DF2. Directive Supports more RES, which 2009/28/EC (RES demands transmission grid devel- Directive) opment. See F2. DF3. Electricity mar- Supports more RES, which ket certificate system demands transmission grid devel- opment. DF4. Bidding areas Clarifies bottlenecks through price signals, which could act as a driver for transmission grid devel- opment. Normative (N) and cognitive (C) rules DN1. Svenska Kraft- Svenska Kraftnät sees that it has BC1. Svenska Kraft- The assumptions on wind power nät normative rules an opportunity, and therefore nät planning practice: establishment are lower than those a responsibility, to decarbonise assumptions regarding of Swedish Wind, which could lead Europe, which in turn calls for wind power to unfavourable conditions for wind transmission grid development power establishment. even when it might not be profit- able for Sweden. DC1. Svenska Kraft- Svenska Kraftnät has started mak- BC2. Svenska Kraftnät The plans are based on Swedish polit- nät planning practice ing more long-term plans, which planning practice: RES ical RES targets only, leading to an include scenarios for increased targets used under-dimensioned transmission grid wind power establishment when capacity as compared to what would making plans for transmission be needed to decarbonize the Euro- grid development. pean power system. See N1.

43 developing sweden’s transmission grid: what are the drivers and barriers?

BC3. Concession pro- In practice the concession process cess in practice: ambi- involves a number of ambiguities, e.g. guity regarding levels of electromagnetic radiation and which stakeholders to involve. This causes uncertainty in the process, an increased risk of conflicts, and a lengthy process. BC4. Concession pro- In practice the concession process cess in practice: conflict- involves a number of uncertain pri- ing priorities orities, e.g. regarding land-use and trade-offs between local and global sustainability concerns on which there is no agreed practice. This causes uncertainty in the process, an increased risk of conflicts, and a lengthy process. BC5. Passive govern- The government’s governance of ance Svenska Kraftnät is passive, implying a lack of evaluation and follow-up which might otherwise have resulted in investments progressing further. The government also has an important role to play in resolving ambiguities and uncertainties over priorities (C3 and C4). Technology (T) DT1. Inertia and fre- More power from RES implies quency stability problems for inertia and fre- quency stability in the power system, something that could be at least partially abated through transmission grid development.

44 stockholm environment institute

APPENDIX B: TRANSMISSION GRID PROJECTS IN SWEDEN

Table A1. Ongoing larger transmission grid projects.

Ongoing transmission grid projects in Sweden

Project Type of project Stated driver Project status & time plan

Ekhyttan-Barkeryd New line Nuclear (Oskar- Concession application: October 2014 shamn) Wind (Got- Construction start: 2017 land) In use: 2019 Ekhyttan-Lämmedal Reinforcement Nuclear (Oskar- Concession application: October 2014 through replacing old shamn) Construction start: 2017 line with line in new In use: 2019 corridor Ekhyttan- New line Security Concession application: 2015 Construction start: 2019 In use: 2021 Forsmark-Råsten New line Nuclear (Forsmark) Concession application: 2014 Construction start: 2016 In use: 2018 Forsmark-Stackbo New line Nuclear (Forsmark) Concession application: winter 2013 Gotlandsförbindelsen New line Wind (Gotland) No time plan available Lindbacka-Östansjö New line Reinforcement Concession application: Q4 2014 SouthWest Link Construction start: n/a In use: Q4 2017 NordBalt New line International Market integration Concession application: Dec 2010 Concession decision: May 2013 Construction start: Jan 2014 In use: Winter 2015/2016 Nybro-Hemsjö New line Security Concession application: 2015 Construction start: 2019 In use: 2021 Råsten-Östforsa New line Nuclear (Forsmark) No time plan available Själlandskablarna Exchange of cables Renewal Preparatory work: spring/summer 2013 Replacement work: 2017 Skogssäter-Stenkullen New line Security Concession application: Winter 2014/2015 Wind (counties of Construction start: 2018 Dalsland, Bohuslän In use: 2020 and Västergötland) Stackbo-Ängsberg New line Nuclear (Forsmark) Construction: summer 2013 Stockholms Ström New lines and Security Construction: 2010–2020 replacement Storfinnforsen-Mid- Reinforcement Wind (Sollefteå) Construction start: 2016 skog through new line in In use: 2018 existing corridor Southwest Link New lines Security Concession application: Q1+Q2 2010 Market integration Concession decision: Q2 2012 Construction start: Q2 +Q3 2013 In use: Q1 2015 Source: www.svk.se

45 developing sweden’s transmission grid: what are the drivers and barriers?

Table A2. Finalised larger transmission grid projects.

Finalised transmission grid projects in Sweden

Project Type of project Stated driver Project status & time plan

Stackbo-Hamra Reinforcement through Fenno-Skan 2 Finalised in 2013 new line in existing Nucluear (Forsmark) corridor Wind (from the north of Sweden) Stenkullen-Lindome New line (32 km) Security Finalised in 2012 Fenno-Skan 2 New line Market integration Finalised in 2011 International Järpströmmen-Nea New line Market integration Finalised in 2009 Security Konti-Skan 1 Converter station Market integration In use 2006. Finalised in 2008. International Decrease environmental impact Source: www.svk.se

Table A3. Planned transmission grid investments up to 2025.

Planned future transmission grid projects in Sweden

Project Type of project Stated driver Time plan

SE1-SE2 Seriekompensera Increased transmission 2014–2018 snittets fyra 400 kV- capacity to the south (+ ledningar 900 MW) Kalix-Djuptjärn New station and new To support Kalix with 2015–2017 line replacing line from power F1 that will be phased out Norway (Porjus-Ritsem-Ofoten) New line Security (NO4, Norway) Would go through Laponia. Low ben- International efits for Sweden. Not relevant. Not sug- gested. Finland (Kalix –Ossausko- New line Security (P1, Finland) No time plan. Low relevance for Swe- ski) International Balancing power den. Is dependent on reinforcement of P1 and snitt 1 and snitt 2. Might hap- pen. SE2-SE3 Shuntkompensering i Increased transmission 2014–2018 400 kV-stationer capacity to the south (+500 MW) Storfinnforsen-Midskog New line Security 2019–2024 Avoid locked in produc- tion Storfinnforsen-Långbjörn New line Security 2019–2024 Avoid locked in produc- tion SE1-SE2-SE3 New line Increased transmission 2020–2025 capacity to the south Sydvästlänken N Barkeryd- New line Reinforcement of grid 2015 Hallsberg Sydvästlänken S Barkeryd- New line (DC) Increased transmission 2015 Hurva capacity (SE3-SE4 + 25 %) Sydvästlänken V Cancelled due to changed conditions (Norway builds link to UK)

46 stockholm environment institute

Gotland 1 New line (HVDC, Wind power 2015–2020 500MW) Forsmark-Råsten New line Nuclear (Forsmark) 2016–2020 Råsten-Östfora New line Nuclear (Forsmark) 2016–2020 Forsmark-Stackbo New line Nuclear (Forsmark) 2016–2020 Svealand Upgrading Wind power 2019–2023 Increased transmission capacity (SE2-SE3) CityLink Anneberg-Ekud- New line Security 2020–2025 den Västkusten Skogssäter- New line Wind power 2020–2025 Stenkullen Gotland 2 New line (HVDC, 300 Wind power No timeplan. Depends on how much MW) wind power is built on Gotland. NordBalt New line Market integration 2015–2016 SE3-Lithuania International Security (Baltics) Skåne Hurva-Sege Upgrade Wind power 2018–2022 Sydvästlänken Skåne Hurva-Barsebäck Upgrade Wind power 2018–2022 Sydvästlänken Stärnsjö-Hemsjö New line Nuclear? 2018–2022 Blekinge Offshore New line Wind power farm (1000 2018-2022 MW) Danmark New line Replacement of existing 2018–2025 SE4-DK2 International Tyskland (Hansa Power- New line Export power from RES 2018–2025 Bridge) International Östkusten Ekhyddan- New line Nuclear 2020–2025 Nybro-Hemsjö Wind power Södra Midsjöbanken New line Wind power farm (700 2020–2025 MW)

Source: SVK (2013)

47 SEI - Headquarters Visitors and packages: Stockholm Linnégatan 87D Sweden 115 23 Stockholm, Sweden Tel: +46 8 30 80 44 Letters: Executive Director: Johan L. Kuylenstierna Box 24218 [email protected] 104 51 Stockholm, Sweden

SEI - Africa SEI - Tallinn World Agroforestry Centre Lai str 34 United Nations Avenue, Gigiri 10133 Tallinn P.O. Box 30677 Estonia Nairobi 00100 Tel: +372 627 6100 Kenya Centre Director: Tea Nõmmann Tel: +254 20 722 4886 [email protected] Centre Director: Stacey Noel [email protected]

SEI - U.S. SEI - Asia Main Office 15th Floor 11 Curtis Avenue Witthyakit Building Somerville, MA 02144 254 Chulalongkorn University USA Chulalongkorn Soi 64 Tel: +1 617 627 3786 Phyathai Road, Pathumwan Centre Director: Charles Heaps Bangkok 10330 [email protected] Thailand Tel: +(66) 2 251 4415 Davis Office Centre Director: Eric Kemp-Benedict 400 F Street [email protected] Davis, CA 95616 USA Tel: +1 530 753 3035 SEI - Oxford Florence House Seattle Office 29 Grove Street 1402 Third Avenue, Suite 900 Summertown Seattle, WA 98101 Oxford, OX2 7JT USA UK Tel: +1 206 547 4000 Tel: +44 1865 42 6316 Centre Director: Ruth Butterfield [email protected]

SEI - York SEI - Stockholm University of York Linnégatan 87D, 115 23 Stockholm Heslington (See HQ, above, for mailing address) York, YO10 5DD Sweden UK Tel: +46 8 30 80 44 Tel: +44 1904 32 2897 Centre Director: Jakob Granit Centre Director: Lisa Emberson [email protected] [email protected]

Stockholm Environment Institute

SEI is an independent international research institute that has been engaged in environment and development issues at local, national, regional and global policy levels for more than 25 years. SEI supports decision-making for sustainable development by bridging science and policy.

sei-international.org Twitter: @SEIresearch, @SEIclimate