Five Paths for Sweden Synthesis Report
Total Page:16
File Type:pdf, Size:1020Kb
Five Paths for Sweden Synthesis report IVA Electricity Crossroads project THE ROYAL SWEDISH ACADEMY OF ENGINEERING SCIENCES (IVA) is an independent academy whose mission is to promote the engineering and economic sciences and the advancement of business and industry. In cooperation with the business community and academia, IVA initiates and proposes measures to improve Sweden’s industrial expertise and competitiveness. For more information about IVA and the Academy’s projects, see the website www.iva.se. Published by: The Royal Swedish Academy of Engineering Sciences (IVA), 2016 Box 5073, SE-102 42 Stockholm, Sweden Tel. +46 (0)8 791 29 00 IVA REPORTS: IVA publishes various types of reports within the framework of its activities. All reports are fact-checked by experts and then approved for publi- cation by IVA’s President. PROJECT REPORTS (IVA-M): A project report summarises a significant portion of a project. A project report can be a report generated during the course of a project or a final report produced at the end. A final report can be based on several project reports. Project reports contain fact-based analysis, observa- tions and a discussion of consequences. Final reports contain clear conclusions and prioritised policy recommendations. Project reports are often the result of the work of a work group and contain limited conclusions and policy recom- mendations. The project Steering Committee approves all project reports for publication and they are fact-checked by IVA to guarantee their factual accu- racy and quality. IVA-M 472 ISSN: 1102-8254 ISBN: 978-91-7082-931-4 Author: Karin Byman, IVA Project Manager: Jan Nordling, IVA Editor: Camilla Koebe, IVA Layout: Anna Lindberg & Pelle Isaksson, IVA This report is available to download as a pdf file at IVA’s website www.iva.se Foreword IVA’s Electricity Crossroads project has been in progress since 2014 and will end in 2016. The project has performed analysis to explore what the Nordic electricity system will look like in the period 2030 to 2050, with a focus on Sweden, to show the consequences of different paths in energy policy from the four perspectives: competitiveness, secure supply, ecological sustainability and investment climate. The vision is a sustainable electricity system that will provide a secure supply of energy at a competitive cost. During the two years the project has been under way there have been changes in the electricity market. Vattenfall and E.ON have, for example, decided to close four nuclear reactors – two in Ringhals and two in Oskarshamn. They have also announced that the six remaining reactors may be closed by 2020 due to poor profitability. Together the reactors account for around 40 percent of Swedish electricity production. Not long after the start of the project the Government appointed an Energy Commission. Electricity Crossroads has had a close dialogue with the politicians involved in the Energy Commission throughout the course of the project and has provided project results and conclusions on a regular basis to the Energy Commission’s administrative office as well as to members of the Commission. The project work has been carried out by a Steering Committee and five work groups the members of which have examined the electricity market from various perspectives. The groups are: • The Electricity Usage work group • The Electricity Production work group • The Transmission and Distribution work group • The Climate and Environment work group • The Public Finances and Electricity Market work group • The Steering Committee for the project as a whole and responsible for this synthesis report. The work groups have each prepared a project report within their respective areas providing in-depth analysis and summarising the most important observations made. A number of special studies were also conducted. The project reports and special studies are listed in Appendix 2. To supplement the above, a separate analysis was conducted by the NEPP (North European Power Perspectives) network of researchers, aided by various model simulations of the electricity market. The synthesis report is based on the project reports, but also contains separate information and analysis as well as conclusions and recommendations. The Electricity Crossroads Steering Committee is responsible for these. All members of the Steering Committee stand behind the conclusions and recommendations as a whole but not necessarily each individual statement. Steering Committee Bo Normark, IVA Div. II (Chairman) Peter Nygårds, IVA Div. III (Vice Chairman) Lina Bertling Tjernberg, Royal Institute of Technology (KTH) Magnus Breidne, Royal Swedish Academy of Engineering Sciences (IVA) Runar Brännlund, Umeå University, IVA Div. IX Mikael Dahlgren, ABB Anders Ferbe, IF Metall Håkan Feuk, E.ON Mats Gustavsson, Boliden Kjell Jansson, Swedenergy Johan Kuylenstierna, SEI Ulf Moberg, Svenska kraftnät (SVK) Birgitta Resvik, Fortum, IVA Div. II Andreas Regnell, Vattenfall Gunilla Saltin, Södra Maria Sandqvist, Teknikföretagen Maria Sunér Fleming, Confederation of Swedish Enterprise Ulf Troedsson, Siemens Adjunct members of the Steering Committee Pernilla Winnhed, Swedenergy Alf Larsen, E.ON Ellika Olsson Aas, IF Metall Project administration Jan Nordling, IVA (Project Director) Karin Byman, IVA (Project Manager) Camilla Koebe, IVA (VP Business and Communications) Caroline Linden, IVA (Project Coordinator) The project’s implementation method is described in Appendix 1. Contents Introduction ........................................................................................................................ 7 Electricity Crossroads – project conclusions ....................................................................... 9 Ecological sustainability ................................................................................................... 10 Competitiveness ................................................................................................................ 11 Investment climate ............................................................................................................ 11 Secure supply .................................................................................................................... 12 Recommendations from Electricity Crossroads .................................................................13 External factors impacting electricity system development ............................................... 17 Challenges facing the Swedish electricity system ................................................................25 Political control in today’s electricity market .................................................................... 27 Deeper analysis of the production system ......................................................................... 29 Characteristics of an energy system with a high percentage of intermittent energy ............ 29 What does Sweden need to do to achieve a power balance? ................................................35 What will happen if all Swedish reactors are closed early? ................................................ 38 Observations and conclusions from the work groups ........................................................ 41 What factors affect future electricity use? ......................................................................... 41 What will the electricity production system look like in the future? .................................. 43 What role will the electrical grid play in the electricity system of the future? .....................45 Investments in the electrical grid ....................................................................................... 46 What are the most important climate and environmental issues? ...................................... 47 Public finances and the electricity market ......................................................................... 49 Appendix .......................................................................................................................... 53 Appendix 1: Methods and criteria ..................................................................................... 53 Appendix 2: Reports produced within Electricity Crossroads ............................................55 Appendix 3: Electricity Crossroads work groups................................................................55 Appendix 4: Literature list ................................................................................................ 56 GLOSSARY Balance responsibility – Companies contracted prevailing weather conditions, for example wind with Svenska kraftnät (SvK – Sweden’s national and solar. Often also called weather-dependent, grid) who have a balancing as well as a financial variable, or volatile energy. responsibility to ensure that the amount of electricity they add to and take out of the grid Capacity mechanism – A regulation that guarantees is always in balance. SvK has ultimate physical a certain availability of power. The available balance responsibility. capacity in the system over time is greater than it would have been in an energy-only market, Power balance – To maintain a stable frequency because it can be assumed that a political of 50 Hz, there needs to be a balance between objective relating to delivery reliability is higher production and consumption of electricity. If there than the actual market outcome. is an imbalance, the frequency in the system will increase or decrease. Quota obligation – A component in the energy